The Strategy of Mitra Bali in Marketing Fair Trade Product in International Market: The Marketing Strategy of Ethical Value Product to Penetrate International Market

Marketing a more expensive product with high product quality is common, but selling more expensive products that integrate ethical values ​​is not common in the international trade system. In a free market system that is becoming mainstream today, prices are an indicator of the scarcity of goods or services. The more scarce an item or service is, the higher the price of the product. This principle occurs in general trade but does not become a reference in fair trade. The goods sold in fair trade are relatively more expensive compared to similar goods on the market but that is not an indication that goods in fair trade are goods that have scarcity. Goods sold under the fair trade mechanism are commonly found items such as coffee, cloth, handicrafts or other products. The higher price of fair trade products also does not indicate that the product has better quality than similar products.

The higher price of fair trade products is due to the business activities of fair trade producers based on the principle of fairness. Producers buy raw materials from local communities and pay their labor at reasonable prices. This is different from the logic of producers in the free market where producers will buy raw materials at the lowest possible price and pay labor as cheaply as possible in order to sell goods at competitive prices. With prices higher than conventional producers, producers with fair trade principles must compete in marketing and selling their products on an ongoing basis.

The proposition conveyed by supporters of fair trade to consumers is to create a product price where producers can not only meet basic needs, but also develop their economy. As stated by Hutchen (2009) fair trade is based on the following key principles:

1. There is an agreement on the minimum price which is usually above the minimum market price. Fair trade prices are based on local economic conditions that allow producers to live properly. With the guaranteed price above production costs, fair trade gives producers the right to make production and investment plans. For workers on large estates (for example tea plantation workers or some fruit), fair trade guarantees that plantation workers get the minimum pay according to the law and standards of the ILO (International Labor Organization) that must be obeyed.

2. Focus on development assistance and technical assistance through payment to suppliers with an agreed social premium (usually 10 percent of the product price). This social premium is paid to small producers and plantation workers so that they can collectively create joint social projects such as building schools or public wells. Small farmers are usually organized in democratic cooperatives that will decide on the use of premium fair trade, for example, to buy milling machines, the cost of exhibiting products or creating new products.

3. Buy directly from the manufacturer. Fair trade aims to reduce the role of brokers or other agents in the global supply network and thus fair trade in increasing efficiency and guaranteeing more of the final price returned to producers.

4. Trade transparency and partnership in the long run. For many small producers, income sustainability is very important for their lives. Fair trade guarantees that importers will sign long-term contracts so that producers do not suffer losses from the effects of consumer behavior bias in the short term. This provides an opportunity for producers to invest in new technology or make investments that should increase their income and grow their businesses.

5. Cooperation relationships, not competition. Fair trade encourages mutual respect between traders and producers. This is an efficient way to provide consumers with quality products and a consistent supply.

6. Give credit when needed. Because importers have easier access to credit compared to producers in developing countries, importers are required to provide loans (upfront payment) of up to 60 percent of total seasonal crop purchases. This makes farmers receive advance payments for their crops before they export.

7. Provide market information to producers. Traders provide information to producers about market price movements.

8. Farmers and democratically organized work. Small farmers must be members of democratically organized cooperatives that use a one-farmer / one-worker decision making system. For workers on plantations, they form democratically controlled groups of workers who decide to use premium fair trade.

9. Practicing sustainable production. All plantations and agriculture in fair trade must have a resource management plan. Some types of pesticides are prohibited for use. Many plantations / agriculture in fair trade use premium fair trade to invest in organic certified products which will increase the basic price of these products.

10. No use of children in the production process.

 Mitra Bali is a handicraft producer that markets its products in the international market. This producer applies the principle of fair trade in its business activities and has become a member of the World Fair Trade Organization which actively disseminates the idea of ​​fair trade. Like other fair trade traders, in marketing and selling their products, Mitra Bali, which is not a large company, must compete with conventional producers who sell products at lower prices. In addition, to market its products, Mitra Bali must reach consumers who understand the injustices of free trade and make consumers accept that their products integrate the values ​​of justice. Another challenge in marketing and selling is to get consumers to accept higher prices than conventional products of the same type as a contribution to fair trade practices. Based on the background above, the researcher examines the strategy of Bali Partners in marketing products on an ongoing basis with the principle of fair trade in the international market.

As a company that carries fair trade, Mitra Bali's marketing strategy has similarities with other companies in general but still has some differences as a consequence of the implementation of fair trade in this company. Mitra Bali does not make fair trade a key feature in its marketing. The uniqueness is the quality of products and designs that fit the trend. If the customer is impressed with the products from Mitra Bali, then Mitra Bali will convey the principles of fair trade that are applied. The strategy has been successful on the one hand providing value to customers and on the other hand giving pleasure to customers because of the ethical values ​​contained in the products they buy.

As a fair trade company, Mitra Bali does not use a competitive pricing method with similar products on the market, but uses a pricing method based on appropriateness that is by counting the living wages of the labor that produces the product. The price calculation according to Mitra Bali lies not in a cheap or expensive continuum but a question of appropriateness. Therefore Mitra Bali is never willing to compromise on this aspect of appropriateness to buyers.

Mitra Bali found that the most effective marketing strategy was to take part in exhibitions in European countries, maintain repeat customer relationships, and continue to network with fellow WFTO members. In this way, Mitra Bali promotes their products and the way they produce. The multiplier effect is that Mitra Bali has a positive image among customers that will spread to other places by word of mouth. In addition, Mitra Bali also has a website that informs about Mitra Bali products and activities. In the marketing process, proving that Mitra Bali is a truly fair trade company is very important. To that end, Mitra Bali has prepared all documents that prove that this company truly upholds ethics and fairness in its business.