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.
A survey was administered to 77 subjects and a conceptual model of five specific inter‐related constructs was tested using LISREL.
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.
To increase generalizability, this study should be replicated among other sample compositions and for additional products and/or services.
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.
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.
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