Consumers have been increasing their interests in firms’ethicality as well as in the features of the firms’ product. when they decide to purchase a certain product. Recently, fair trade is considered to be ethical marketing in the business-to-consumer market. In this regard, the effects of fair trade-based marketing on financial performance become the center of academic and managerial concern. Despite this importance, few studies have investigated whether fair-trade is a source of competitive advantage or just a cost of doing business.
The present research attempts to provide evidence of how fair trade-based marketing influences competitive advantage. Two experimental studies were conducted to explore consumers’purchase intention, a proxy of competitive advantage, in a foreign product-consumption context. Drawing on the instrumental stakeholder theory, the first study was performed to examine the effects of fair trade marketing on conumers’ purchase intention through a within-subjects design. Building on the signal theory, the second study was executed to test the effects of the Fair trade Labelling Organizations (FLO) International on consumers’purchase intention.
The findings of the current research reveal that consumers prefer fair trade-based products to others and that when it comes to fair trade-certified products, consumers are more likely to purchase products with that certification than otherwise even when those products are sold at higher costs than rival products Interestingly, the results of this research present that there is a significant difference of consumers’purchase intention of a fair trade-based product between two different marketers. This implies that fair trade-based products should be differentiately distributed and targeted at a certain type of consumers.

Keywords: Fair Trade, Competitive Advantage, Instrumental Stakeholder Theory, Signal Theory, Fairtrade Labelling Organization