1) What is the aim of the “fair trade” coffee movement? Please include how “fair trade” coffee is distributed in your response. You will need to research this term on the web.
2) A typical Latino coffee farmer has fixed costs of $10,000 per year. Under the old distribution system, the farmer is paid $.40 per pound (U.S. weight measure) and the farmer’s variable cost per pound is $.30. What is the farmer’s breakeven point in units (pounds) under the old system? What is the farmer’s breakeven point in dollars? Show all math.
3) Under the new distribution system, the farmer is paid $1.26 per pound, what is the farmer’s breakeven point in units (pounds) now? What is the farmer’s breakeven point in dollars? Show all math.
4) What is the goal of “TransFair USA”? What promotion mix would you recommend TransFair USA use to communicate the “fair trade” coffee movement? (Especially with regard to stores and coffee roasters throughout the U.S.) Please give examples of promotional activities that might be effective. In addition, please elaborate why you think each of your choices might be effective.
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