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Consumers' reaction to fair trade motivated price increases

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  • Campbell, Colin L.
  • Heinrich, Daniel
  • Schoenmüller, Verena
Abstract
Consumer perception of price increases and their reactions are a topic of great relevance for marketing research and practice. We investigate consumers' acceptance of price increases justified by higher costs due to company's corporate socially responsible activities by conducting two experimental studies. In the first study we examine perceived fairness and intentions following a price increase justified by a fair trade commitment. To assess the green attitude–behavior gap in consumer behavior our second study incorporates a real world experiment to explore actual consumer behavior against stated intentions. Our investigation adds nuance to our understanding of the effects of corporate social responsibility on consumer response to price increases. Our results reveal that a price increase due to a fair trade commitment is perceived as fair and does not have a negative impact on purchase behavior. We contrast our findings with a price increase due to higher taxes and due to profit increase. Our results demonstrate that fair trade justified price increases can skim twice the amount compared to tax justified increases. Furthermore, consumers' actual buying behavior reveals no difference to their stated intentions. Hence, prior research proclaiming an attitude–behavior gap in the context of consumers' socially responsible buying behavior has to be called into question.

Suggested Citation

  • Campbell, Colin L. & Heinrich, Daniel & Schoenmüller, Verena, 2015. "Consumers' reaction to fair trade motivated price increases," Journal of Retailing and Consumer Services, Elsevier, vol. 24(C), pages 79-84.
    • Handle: RePEc:eee:joreco:v:24:y:2015:i:c:p:79-84
    DOI: 10.1016/j.jretconser.2015.02.005
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    References listed on IDEAS

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    2. David Bürgin & Robert Wilken, 2022. "Increasing Consumers’ Purchase Intentions Toward Fair-Trade Products Through Partitioned Pricing," Journal of Business Ethics, Springer, vol. 181(4), pages 1015-1040, December.
    3. Carlos Guerrero Medina & Myriam Martínez‐Fiestas & Maria I. Viedma‐del‐Jesus & Jessica Alzamora Ruiz, 2020. "Living wage in the framework of corporate social responsibility: Analyzing its impact on consumer response," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2060-2070, September.
    4. Alvina Gillani & Smirti Kutaula & Leonidas C. Leonidou & Paul Christodoulides, 2021. "The Impact of Proximity on Consumer Fair Trade Engagement and Purchasing Behavior: The Moderating Role of Empathic Concern and Hypocrisy," Journal of Business Ethics, Springer, vol. 169(3), pages 557-577, March.
    5. WeiWei Chen & Hsiao-Ching Lee, 2018. "How to explain service failure? Impacts of justifications," Service Business, Springer;Pan-Pacific Business Association, vol. 12(2), pages 331-356, June.
    6. Nejat Anbarci & Nick Feltovich, 2018. "Pricing in Competitive Search Markets: The Roles of Price Information and Fairness Perceptions," Management Science, INFORMS, vol. 64(3), pages 1101-1120, March.
    7. Dimitris Georgantzis Garcia & Eva Kipnis & Efi Vasileiou & Adrian Solomon, 2021. "Consumption in the Circular Economy: Learning from Our Mistakes," Sustainability, MDPI, vol. 13(2), pages 1-23, January.
    8. Svenja Mohr & Rainer Kühl, 2021. "Exploring persuasion knowledge in food advertising: an empirical analysis," SN Business & Economics, Springer, vol. 1(8), pages 1-27, August.
    9. Julika Herzberg & Oliver Lorz, 2020. "Sourcing from conflict regions: Policies to improve transparency in international supply chains," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 395-407, May.
    10. Rashid, Md Sanuwar & Byun, Sang-Eun, 2018. "Are consumers willing to go the extra mile for fair trade products made in a developing country? A comparison with made in USA products at different prices," Journal of Retailing and Consumer Services, Elsevier, vol. 41(C), pages 201-210.
    11. A. Beldad & S. Hegner, 2018. "Determinants of Fair Trade Product Purchase Intention of Dutch Consumers According to the Extended Theory of Planned Behaviour," Journal of Consumer Policy, Springer, vol. 41(3), pages 191-210, September.
    12. Shih-Tse Wang, Edward & Chen, Yu-Chen, 2019. "Effects of perceived justice of fair trade organizations on consumers’ purchase intention toward fair trade products," Journal of Retailing and Consumer Services, Elsevier, vol. 50(C), pages 66-72.

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