Enterprise management strategies in agricultural fairtrade products

Abstract

Purpose-One of the fairtrade's major purposes is to raise the socioeconomic of small-scale farmers. Numerous studies have found that fairtrade has a beneficial effect on farmers' profitability. Meanwhile, this study focused on the product management strategies of enterprises engaged in fair trade products.

Method-The researchers used 50 legally registered enterprises located and operated in the province of Cavite. The significant findings were drawn and analyzed using a descriptive research design.

Result-It was discovered that the majority of respondents were sole proprietors with few employees, had been in business for less than three years, and had an average initial capital of Php 3,000,000.00 or less. The product management strategies were very effective, and the majority of the participants used package labeling, fair pricing, and personal branding. Furthermore, the study identified challenges encountered in the implementation of product management strategies, such as poor consumer knowledge about packaging, financial resources that affect product pricing, and consumers' lack of brand exposure.

Contribution-The study provides detailed product management practices or strategies among fairtrade products, which will serve as a springboard for status quo analysis and baseline studies to explore and develop pandemic-and post-pandemic-sensitive resilient strategies that will promote the sustainability of fairtrade enterprises.

Full text

Journal of Enterprise and Development (JED)
Vol. 5, No. 2, 2023
ISSN (PRINT): 2715-3118, ISSN (ONLINE): 2685-8258
Journal of Enterprise and Development (JED) is licensed under a Creative Commons Attribution-
ShareAlike 4.0 International License.
Enterprise management strategies in agricultural fairtrade
products
Xavier Lawrence D. Mendoza1,*, Jerico B. Tadeo2, Jaypee M. Dacanay3,
Arnold Nicholas Marla4, Chiel Aszhnie B. Vergara5
Cavite State University – CCAT Campus, Phillippines1,2,3,4,5
Corresponding e-mail: xavierlawrence.mendoza@cvsu.edu.ph*
ABSTRACT
Purpose — One of the fairtrade's major purposes is to raise the socio-economic of small-scale
farmers. Numerous studies have found that fairtrade has a beneficial effect on farmers' profitability.
Meanwhile, this study focused on the product management strategies of enterprises engaged in fair
trade products.
Method — The researchers used 50 legally registered enterprises located and operated in the
province of Cavite. The significant findings were drawn and analyzed using a descriptive research
design.
Result — It was discovered that the majority of respondents were sole proprietors with few
employees, had been in business for less than three years, and had an average initial capital of Php
3,000,000.00 or less. The product management strategies were very effective, and the majority of
the participants used package labeling, fair pricing, and personal branding. Furthermore, the study
identified challenges encountered in the implementation of product management strategies, such
as poor consumer knowledge about packaging, financial resources that affect product pricing, and
consumers' lack of brand exposure.
Contribution — The study provides detailed product management practices or strategies among
fairtrade products, which will serve as a springboard for status quo analysis and baseline studies to
explore and develop pandemic- and post-pandemic-sensitive resilient strategies that will promote
the sustainability of fairtrade enterprises.
Keywords: agricultural products, fairtrade, product management strategies

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INTRODUCTION
The certification for fairtrade products generally aims to raise the economic and
social status of marginalized producers, specifically small-scale farmers in the
developing nation. Fairtrade certification may provide additional opportunities
beyond the cooperative producer organization, which influence the farmers'
agricultural practices (Elder et al., 2013). The fairtrade program transfers
income to farmers by establishing a price floor and a different distribution
channel that avoids middlemen between the raw commodity and global markets
(Podhorsky, 2015). Cruz (2015) explained that one of the benefits of the
producer if they become fairtrade-certified, is the assurance of the price stability
of their produce. The fairtrade also supported responsible consumption
practices among consumers by promoting the purchase of goods produced and
traded under fair conditions (Raynolds, 2020). Agricultural products in the
Philippines which are included under fair trade are sugar, bananas, coffee, and
cacao.
Enterprises need to consider product management strategies toward fairtrade
agricultural products since some consumers perceive fairly products as too
expensive. Product management is essential for enterprises to understand the
product's value. Moreover, it guides an enterprise in investing resources to
deliver a competitive product. It is instrumental in achieving a business goal
across the product life-cycle, which entails the stages of pre-development,
development, introduction, growth, maturity, decline, and end-of-life (Kopp,
2022). Furthermore, it unites product development, marketing, and sales which
can increase the profit of enterprises (Altexsoft, 2019). Fairtrade products are
traded competitively in a heavily competitive market characterized by a huge
volume of alternatives, complimentary and free entry, and exit. Commonly in the
Philippines fairtrade products are commonly agricultural products (Habaradas
& Aure, 2014). In the province of Cavite, fairtrade products include rice, coffee,
banana, and cacao products, which belong to the challenged enterprises by the
effect of the pandemic (Dagpin et al., 2022).
The study of Bomersall (2012) gave a wide perspective of understanding
fairtrade products in the Cavite market, which highlighted that awareness and
capacity to pay were the main factors of enterprise growth. A study was
conducted by Didier and Lucie (2008), who pointed out the capacity to pay as a
key player in business growth in western countries. This situation threatens the
fairtrade products as economic recession was included during the pandemic.
Considerably, according to Hughes et al. (2018), an appropriate understanding
of strategy within the enterprise, including products, provides an avenue for
business growth that can be market sensitive. Hence, the researchers explored

Xavier Lawrence D. Mendoza, Jerico B. Tadeo, Jaypee M. Dacanay, Arnold Nicholas
Marla, Chiel Aszhnie B. Vergara
Journal of Enterprise and Development (JED), Vol. 5, No. 2, 2023
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the product management practices of fairtrade products to create a pandemic-
sensitive perspective. Today, international and local markets in the Southeast
Asian region are experiencing necessary effects, which in turn influence various
enterprises (Tadeo et al., 2023), including fairtrade products. Considerably, the
province of Cavite is continuously seeking ways to stimulate and craft a resilient
market environment for local enterprises, and the researchers saw a pathway of
inspecting and understanding product management strategies as a platform for
resilient fairtrade enterprises. Additionally, the majority of the small amount of
fairly produced goods is designated for exportation. The benefits of fairtrade
products on farmers' lives were hardly known and evident in the Philippines.
Hence, it is important to convey that those products do not necessarily have to
cost more than others and offer additional benefits. Product innovation and
responding to changing business environment in the new normal are some of the
problems that lead to business failure (Dagpin et al., 2022).
Thus, the researchers determined and analyzed the product management
strategies of enterprises engaged in agricultural fairtrade products. It may
stimulate relevant enterprises to develop more product-focused approaches,
which could lead to sustainable business operations as an enterprise jump-start
strategy amidst pandemic.
METHOD
Research design
The researchers employed a descriptive research design. Considerably, this
approach was utilized to determine the product management strategies,
perceived effectiveness, and challenges experienced by the participants in
employing product management strategies.
Sources of data
This study used both primary and secondary data. Survey questionnaires were
used to collect primary data from participants. Secondary data, on the other
hand, were gathered from published scholarly articles and academic references.
Sampling design
The researchers utilized purposive sampling in selecting the target participants.
The researchers identified enterprises engaged in fairtrade agricultural products
through a scanning and screening approach. Considerably, these enterprises

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were legally registered and verified through the business permit and licensing
office of their respective cities and municipalities. The total 50 target
participants were located in selected areas of Cavite, specifically in Amadeo, Naic,
Silang, the City of Tagaytay, the City of General Trias, and Cavite City,
respectively.
Research instrument
During the data collection, the researchers used self-constructed survey
questionnaires. The self-made instrument contains all the necessary information
that helps the researchers meet the study's objectives. Specifically, the
researcher used close-ended questionnaires to determine the product
management strategies of enterprises engaged in fair trade agricultural
products. The computed Lawshe's Content Validity (LCV) was 0.77. Cronbach
alpha was calculated as 0.664 validity which conformed with instrument-
statistical validity and reliability values.
Statistical treatment
Descriptive statistics such as frequency, percentage distribution, and computed
mean were used. Through the statistical analysis, the researchers were able to
draw analysis on the status of enterprises engaged in agricultural fairtrade
products, specifically the effectiveness of its product management strategies.
Data Analysis
This scale was used to assess the perceived effectiveness of the enterprises'
product management strategies. It employs a qualitative approach, with 5
representing the value of very effective and 1 representing the value of
ineffective.
Table 1. Perceived effectiveness scale of product management strategies
Range
Descriptive value
Qualitative approach
4.20-5.00
Very effective
The product management strategies of enterprises
are very effective
3.40-4.19
Effective
The product management strategies of enterprises
are effective
2.60-3.39
Moderately effective
The product management strategies of enterprises
are moderately effective
1.80-2.59
Slightly effective
The product management strategies of enterprises
are slightly effective

Xavier Lawrence D. Mendoza, Jerico B. Tadeo, Jaypee M. Dacanay, Arnold Nicholas
Marla, Chiel Aszhnie B. Vergara
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1.00-1.79
Not effective
The product management strategies of enterprises
are not effective
Source: data processed (2022)
RESULT AND DISCUSSION
Table 2. Forms of business organizations
Category
Frequency
Percentage
Sole proprietorship
31
62.50
Partnership
10
20.00
Corporation
8
16.50
Cooperative
1
2.00
Total
50
100.00
Source: data processed (2022)
Table 2 shows the participants' frequency and percentage of the business profile
in terms of forms of business organization. This presents that 62.50% of the
participants were registered as sole proprietors while 2.00% are under
cooperative. This implies that most of the participants are registered sole
proprietors.
Table 3. Number of employees
Category
Frequency
Percentage
1 to 9 employees
34
68.50
10 to 99 employees
15
30.00
100 to 199 employees
1
2.00
Total
50
100.00
Source: data processed (2022)
Table 3 shows the participants' business profile regarding the number of
employees. It reveals that 68.50% of the participants have 1 to 9 employees,
while only 2.00% have 100 to 199 employees. Considering the number of staff of
the participants, they generally belong to a micro business.
Table 4. Length of the business operation
Category
Frequency
Percentage
Less than 3 years
36
72.00
3 to 5 years
3
6.00
6 to 8 years
4
8.00
9 to 11 years
3
6.00
More than 12 years
4
8.00
Total
50
100.00
Source: data processed (2022)

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Table 4 presents the business profile of the participants in terms of the length of
business operation. It shows that 72.00% of the participants operated for about
less than 3 years. On the other hand, there were 6.00% of participants operated
for 3 to 5 years. Generally, most of the participants were in the infancy stage of
the business cycle.
Table 5. Average initial capital
Category
Frequency
Percentage
Php 3,000,000.00 and below
36
72.00
Php 3,000,001.00 to Php 15,000,000.00
9
18.00
Php 15,000,001.00 to Php 100,000,000.00
2
4.00
Php 100,000,001 and above
3
6.00
Total
50
100.00
Source: data processed (2022)
Table 5 presents the business profile of the participants in terms of average
initial capital. This shows that 72.00% of the participants have average initial
capital of Php 3,000,000.00 and below, while 6.00% of the participants have
average initial capital of Php 100,000,001.00 and above. Generally, the results
reveal that most of the participants are considered micro businesses. Based on
the 2021 statistical data of the Philippine Statistical Authority, 90.54% of the
total MSMEs are micro enterprises (Department of Trade and Industry, 2021).
Table 6. Product management strategies of enterprises in the packaging
Category
Frequency
Percentage
Visual packaging
33
26.83
Package labeling
39
31.71
Promotional packaging
14
11.38
Unique packaging
14
11.38
Easy to remove packaging
18
14.63
Compostable packaging
5
4.07
Total
50
100.00
Source: data processed (2022)
Table 6 shows participants' frequency and percentage of product management
strategies in terms of packaging. This section presents that 31.71% of the
enterprises used package labeling. Moreover, the 5 participants, or 4.07% of the
enterprises, are using compostable packaging. The result shows that most of the
enterprises used package labeling. The findings of Sung (2021) supported that
container design affects consumer purchase intentions. Moreover, materials
were also taken into account as a source of information. It indicates that different

Xavier Lawrence D. Mendoza, Jerico B. Tadeo, Jaypee M. Dacanay, Arnold Nicholas
Marla, Chiel Aszhnie B. Vergara
Journal of Enterprise and Development (JED), Vol. 5, No. 2, 2023
JED | 178
consumers' purchasing habits, including material and textual aspects, are
affected. Moreover, Fenko et al. (2018)’s study stated that textual claims and
metaphorical illustrations of coffee bean packaging on consumers' responses are
influenced by both visual elements and textual claims depicted on the package.
Table 7. Product management strategies in pricing
Category
Frequency
Percentage
Fair pricing
31
36.05
Competitive matching
21
24.42
Value-based pricing
30
34.88
Partitioned pricing
2
2.33
Perceived-value pricing
1
1.16
Other/s
1
1.16
Total
50
100.00
Source: data processed (2022)
Table 7 shows the frequency and percentage of product management strategies
of participants in terms of pricing. This section presents that those 31
participants, or 36.05% of enterprises, employed a fair pricing strategy.
Additionally, 1.16% of participants use the perceived-value pricing strategy the
least. The result reveals that most enterprises are using a fair pricing strategy.
Samoggia et al. (2021) found that people who buy and consume food are
increasingly looking for emotions and values. They ensure that the products are
socially and environmentally sustainable. The consumers' interest in product
price fairness is increased. Moreover, Konuk (2017) supported the findings that
price fairness leads to food satisfaction. It implies that price fairness is one factor
that satisfies the consumer. Consumers will not feel taken advantage of by
producers of organic food.
Table 8. Product management strategies in branding
Category
Frequency
Percentage
Personal branding
42
43.75
Corporate branding
5
5.21
Brand co-creation
6
6.25
Brand identity
22
22.92
Brand image
20
20.83
Other/s
1
1.04
Total
50
100.00
Source: data processed (2022)

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Table 8 shows the frequency and percentage of the product management
strategies of participants in terms of branding. This section presents that those
42 participants, or 43.75% of the enterprises, are personal branding. Moreover,
5 participants, or 5.21% of the enterprises, are least using the personal brand.
The result reveals that most of the participants are using personal branding. The
study of Alonso-Gonzalez et al. (2018) gave substance to personal branding,
allowing the individual to become unique not only from a personal point of view
but also from the professional one. It is a method that will identify the traits and
qualities that make the individual unique compared to other professionals.
Moreover, the study by Vilander (2017) stated that a person's reputation and
image are their brand. In the eyes of others, it is shaped by appearance, channel
preference, presence, and activities. In essence, personal branding
communicates a person's identity, level of expertise, and desired outcomes. It
was also addressed that a careful understanding of what to communicate and the
right kind of content to share will help someone develop a personal branding
plan.
Table 9. The perceived effectiveness of product management strategies of participants
Category
Mean
Descriptive value
Packaging
4.44
Very effective
Pricing
4.46
Very effective
Branding
4.42
Very effective
Source: data processed (2022)
Table 9 shows the perceived effectiveness of product management strategies of
participants. The table showcases the perceived effectiveness of product
management strategies in terms of packaging, pricing, and branding were very
effective, with corresponding mean values of 4.44, 4.46, and 4.42, respectively.
Generally, the product management strategies of participants are very effective.
Table 10. Challenges in employing product management strategies in terms of packaging
Category
Frequency
Percentage
Inadequacy of product design
13
20.31
The packaging is not interesting
4
6.25
No ethical marketing of the product
6
9.38
Competitive in the form of packaging is weak
8
12.50
Poor consumer knowledge about the packaging
14
21.88
Other/s
19
29.69
Total
50
100.00
Source: data processed (2022)

Xavier Lawrence D. Mendoza, Jerico B. Tadeo, Jaypee M. Dacanay, Arnold Nicholas
Marla, Chiel Aszhnie B. Vergara
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Table 10 shows the frequency and percentage of challenges the participants
experienced regarding packaging. This section presents that the majority of the
participants, or 21.88%, have experienced poor consumer knowledge about the
packaging, while the packaging is not interesting is the least, with 6.25% of the
participants having experienced it. The result reveals that most participants
experienced poor consumer knowledge about the packaging and the challenges.
Ndule (2020) findings supported that the packaging significantly influenced the
consumer purchasing the product. Moreover, the study of Heredia-Colaco et al.
(2017) promoted the idea that fair trade certification is a key differentiator for
brands. In the brand with low familiarity, fair trade certification's inclusion
seems important where the low familiar brand seems positively interfere with
customers' product valuation with these added on-package attributes.
Table 11. Challenges in employing product management strategies in terms of pricing
Category
Frequency
Percentage
Financial resources which also affect the
price of the product
16
25.81
Product price with no fair trade message
4
6.25
The enterprises have low profitability
9
14.52
The enterprises do not have effective
marketing strategies.
6
9.68
The enterprises have labor problems,
which also affect the pricing of the product.
11
17.74
Other/s
16
25.81
Total
50
100.00
Source: data processed (2022)
Table 11 shows the frequency and percentage of challenges experienced by the
participants in terms of pricing. This section presents that the majority of the
participants, with 25.81% experienced financial resources, which also affects the
price of the product, while the product price with no fair trade message is the
least with 6.45% of the participants experienced. The result reveals that financial
resources, which also affect the price of the products, most of the participants
experienced challenges. The findings of Prakash & Verma (2019) supported that
the problem of the initial period of a business is the financial resources.
Additionally, financial obstacles show that timely and appropriate financing at a
fair rate is a prerequisite for the growth of enterprises. Moreover, Gilchrist et al.
(2017) showed support for financial resources. It shows how firms with fewer
financial resources raise prices in comparison to those with more resources.
Competitive enterprises must cope with expensive price adjustments and
external financial risks when setting prices to actively manage current demand

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against future predicted demand. As a whole, the study examined how
enterprises with little internal liquidity greatly impact pricing.
Table 12. Challenges in employing product management strategies in terms of branding
Category
Frequency
Percentage
Lack of promotion of the brand
19
23.75
Consumer brand awareness is weak
12
15.00
Lack of brand exposure to the consumer
19
23.75
Difficult to introduce the product
10
12.50
Lack of expertise in making decisions
about the product branding
7
8.75
Lack of managerial implications
5
6.25
Other/s
16
25.81
Total
50
100.00
Source: data processed (2022)
Table 12 shows the frequency and percentage of the challenges experienced by
the participants in terms of branding. This section presents that 23.75% of the
participants lack promotion of the brand, while the least of the participants lack
managerial implications with 6.25%. This result reveals that most challenges
experienced by the participants are lack of promotion of the brand. The study of
Lee et al. (2017) explained how the dominance of other locally brewed coffees,
together with the operations of foreign café franchises, will cause them to face
obstacles, including a lack of consumer brand exposure, and this discussion
provided support for the lack of brand exposure. Additionally, Lou et al. (2019)
found that having several brands for agricultural products will cause agricultural
firms to have poor brand awareness, poor market awareness, and a lack of
initiative to grow brands. On the other hand, the study of Song et al. (2019)
supported the findings that the relationship between brand image, brand love,
and brand respect has been recognized as having a significant impact on
increasing brand loyalty. In the context of name-brand coffee shops, it is
important to concentrate on brand image management, which includes the
exterior surroundings and internal perception. Moreover, the study of
Vaikunthavasan et al. (2019) recognized the issue MSMEs in Northern Province
were facing and found that one of the biggest issues was marketing, namely in
the areas of product, price, promotion, and distribution. Due to the high expense
of advertising and marketing to transmit the message about the products or
services, SMEs have been using only a limited number of media to disseminate
information. The findings of Tadeo & Muralla (2022) supported the results of the
study, where packaging and promotion were the key challenges of One Town One
Product (OTOP) in Cavite which can be attributed to fairtrade products.

Xavier Lawrence D. Mendoza, Jerico B. Tadeo, Jaypee M. Dacanay, Arnold Nicholas
Marla, Chiel Aszhnie B. Vergara
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Discussion
Profile of the fairtrade enterprises
Generally, the fairtrade enterprises in Cavite were focused on the upland areas
of the province. Considerably, most of the enterprises were sole proprietors,
with 62% of the total participants. The findings support the data provided by the
senate of the Philippines (2021), which mostly sole enterprises predominate
microeconomics dimensions of the economy. Considerably, it supports the study
of Pichay et al. (2021) and Tadeo et al. (2023), that most of the participants are
a sole proprietorship. The study of Malinao (2022) coincides with the results
wherein the local coffee producers in Ifugao province are mostly sole
proprietorships. Similar to the study conducted by Abalos & Doria (2021), the
majority of the registered enterprises in Pangasinan were sole proprietors. This
structure of the form of business can be attributed to how farmers themselves
become a seller of their own fairtrade products and link them to their market.
Noting that they have only less than 9 employers, as showcased in Table 2.
Moreover, most of the participants have less than three years in operation and
were just starting up before within the pandemic timeline. The key
characteristics of these enterprises were microenterprises having less than 3
million pesos which have 72.00% of the total participants. It confirms the report
of the Philippines senate that there is 70% participation of microenterprises in
the 95% micro, small, and medium enterprises (MSME) economic composition
of industries in 2021. The predominance of microenterprises is very common in
southeast Asia, as studied by Mendoza & Tadeo (2023). This can be attributed to
low-capital sourcing and accessibility of financial institutions in the region.
Product management practices of fairtrade enterprises
The fairtrade enterprises focused on simple package labeling with 31.71% of
total participants. It is noted that among these packaging activities, this is the
least costly and can be done with minimum manpower. Fairtrade products were
bounded by fair pricing as suggested and purported by a competitive market
under a competitive structure where products are widely subjected to
substitution and very elastic cross-product momentum. The same attribute
revealed that personal branding was utilized in branding as key product
management. It is the least costly and can be executed by sole ownership and
microenterprise. In addition, as perceived by fairtrade entrepreneurs, the
strategy that was utilized was very effective. This response is common among
low-capital enterprises with limited operations. The participants highlighted
their knowledge to innovate their products, restricted financial access,

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institution, and financial-augmenting support such as safety nets from the
government. These problems confirm the flow effect of the pandemic on these
enterprises, which heeds a more strategic approach to product management.
CONCLUSION
The participants' profiles are identified, and most of them are commonly used by
one-person operations with a small number of employees that have been
operating for less than three years, which is classified as the infancy or
introductory phase in the business cycle. Furthermore, based on their initial
capital, they are considered microenterprises. Enterprise product management
strategies are classified into packaging, pricing, and branding. This study found
that most participants employed package labeling, fair pricing, and personal
branding strategies. Participants' product management strategies were effective
in packaging, pricing, and branding. Participants reported a lack of consumer
knowledge about packaging, making it difficult to implement product
management strategies. Participants indicated that their financial resources
affect the price of a product, while inflation tends to raise the price. Furthermore,
participants reported difficulty implementing branding strategies due to a lack
of brand promotion and consumer exposure.
Enterprises should evaluate their strategies, particularly in packaging, pricing,
and branding. Despite the fact that their product management tactics were highly
effective, reviewing those strategies can help them minimize the obstacles they
encountered. In addition, they must prioritize the aforementioned obstacles in
order to remain competitive in the market. Similarly, businesses should pay
special attention to product packaging, as promoting the product alongside the
packaging eliminates poor consumer knowledge. Furthermore, because they are
classified as micro-enterprises, promotion should be done in various ways,
including social media promotion.
On the other hand, having sufficient stable financial resources will not affect the
product's price. In terms of promotion, being active on multiple social media
platforms may help eliminate the challenges they encounter when implementing
a branding strategy; promoting on multiple social media platforms allows
enterprises to broaden their target audiences. Finally, businesses should connect
their fair trade agricultural products to local cooperatives through One Town,
One Product (OTOP). This would help enterprises involved in fair trade
agricultural products promote their goods and products and fund their
respective businesses.

Xavier Lawrence D. Mendoza, Jerico B. Tadeo, Jaypee M. Dacanay, Arnold Nicholas
Marla, Chiel Aszhnie B. Vergara
Journal of Enterprise and Development (JED), Vol. 5, No. 2, 2023
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The researchers suggest to future researchers to conduct a customer-segment
analysis concerning the product management strategies that were conducted by
the fairtrade entrepreneurs. Considerably, the researchers suggest exploring
intermediating variables that may link consumer perspective and enterprise
strategy to establish a behavioral and theoretical note that can further provide
an in-depth analysis of the product management implementation paradigm in
marketing.

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