Will consumers pay a premium for ethical information?
Purpose – The purpose of this paper is to identify the factors that may influence a consumer to pay a premium for a product or service communicating ethical information. Design/methodology/approach – A survey was administered to 77 subjects and a conceptual model of five specific inter-related constructs was tested using LISREL. Findings – There is a sequence of events that leads consumers to be willing to pay a premium for a product communicating ethical information. This sequence starts with the need for information which, in turn, leads to socially responsible behavior and social sacrifice and, finally, to the intention to pay a premium. Importantly, this sequence is positively moderated by monetary resources available to spend in the category. Research limitations/implications – To increase generalizability, this study should be replicated among other sample compositions and for additional products and/or services. Practical implications – The research details the multi-step consumer decision-making process that marketers need to understand in order to market a premium priced product that delivers a social benefit. Originality/value – Socially responsible behavior is not sufficient by itself for a consumer to pay a premium for a product communicating ethical information. Rather, socially responsible behavior leads to a willingness to make a sacrifice which then leads to intentions to pay a premium price.
Volume (Year): 5 (2009)
Issue (Month): 4 (October)
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