Corporate social responsibility and consumers' perception of price

Abstract

Purpose-This study intends to investigate whether corporate social responsibility (CSR) would positively influence the benefit and the value perceived by the consumer in the company's offer, the judgment of fairness in the price differential charged for it, and his/her buying intention, in a context where the socially responsible firm practises a price higher than the competition. It also investigates whether a social action, supported by the firm, with direct impact on the consumer's life, would provoke a higher effect in his/her reactions than a social action with indirect impact. Design/methodology/approach-The objectives were achieved through experimental methodology, using scenarios. Prior studies contributions to CSR and consumer behavior domains and the theoretical framework supporting the model of perceived value generated the study's proposition, which was translated in a set of hypotheses. Findings-The results obtained indicated that consumers perceived greater benefit and value in the offer of the socially responsible firm, and were showed to be willing to pay 10 percent more for its product, judging this price differential as being fair. Moreover, the social action with direct impact on the consumer's life influenced more positively his/her reactions than the social action with indirect impact. Research limitations/implications-The research instrument opens up the possibility for people to try to give answers that are in accordance with socially established rules and conventions. Also, a non-probabilistic convenience sample was adopted. Issues for future studies are: price sensitivity in the context of CSR; the importance of CSR as a factor of influence in buying decision compared with other factors; variables that could exert influence on the impact of CSR on consumers' reactions; the influence of information sources about CSR in the consumer's buying decision. Practical implications-The results of the study indicate that companies have the opportunity to respond to their consumers' desires of feeling good about a purchase (incentivating CSR), while achieving their business goals and, simultaneously, giving their own contribution to society. Also, when deciding on the social project to invest, firms should try to know which social actions are more valued by their consumers, which are those they judge to benefit them more directly. Originality/value-The results achieved the integration of CSR in the field of perception of price fairness, as one motive that contributes to a price differential be judged as fair. As a part of the study, a measurement scale was elaborated and tested for the variable perceived benefit.

A review of corporate social responsibility in developed and developing nations

“…Candidates now look for a workplace and corporate culture that is committed to going beyond mere profit lines and actively contributes in essential social issues. A company that stands firm on promotion of social equality and enjoys good reputation for being morally aware can demand premium prices from its customers, who will attach more value to the firm's product (Abrantes Ferreira, Gonçalves Avila, & Dias de Faria, 2010). The modern workforce is self-aware and attracted to companies that are consistent with value systems, not just economic expectations (Alonso-Almeida & Llach, 2019).…”

“…The modern workforce is self-aware and attracted to companies that are consistent with value systems, not just economic expectations (Alonso-Almeida & Llach, 2019). A company that stands firm on promotion of social equality and enjoys good reputation for being morally aware can demand premium prices from its customers, who will attach more value to the firm's product (Abrantes Ferreira, Gonçalves Avila, & Dias de Faria, 2010). As put by The Economist (1999), "Companies with their eye on the 'triplebottom line' outperform their less fastidious peers on the stock market."…”

Toward a theory of ethical consumer intention formation: re-extending the theory of planned behavior

“…Price is also an important factor influencing ethical consumer purchase intentions, but it is beyond the scope of the current article. Instead, it is assumed that consumers are willing to pay an average premium of around 20% for a risk-free ethical product over the same non-ethical product (e.g., Ferreira et al 2010). Other things being equal, consumers will be more likely to purchase ethical products if their prices remain competitive or affordable.…”

From Absolution to Action: Examining Americans’ Reactions to High‐Profile Corporate Scandals

“…Several studies have demonstrated the link between CSR and positive affective, cognitive, and behavioral responses by consumers (Brown & Dacin, 1997; Creyer, 1997; Ellen, Mohr, & Webb, 2000; Sen & Battacharya, 2001). CSR platforms positively influence consumer attitudes toward a company and its products, and consumers are willing to pay more and advocate for products manufactured by corporations with strong CSR commitments (Abrantes Ferreira, Gonçalves Avila, & Dias de Faria, 2010; Xie, Bagozzi, & Grønhaug, 2019).…”