Brands (Ir)Responsible Business Practices and Consumers’ Multiple Price Perceptions

Ilona Szöcs, Maria Gabriela Montanari

Corporate social responsibility (CSR) and corporate social irresponsibility (CSI), respectively, exert a positive and a negative influence on consumers’ brand responses. However, it is unclear whether consumers wish more to reward CSR practices or to punish companies’ engagement in CSI activities, particularly considering price-related outcomes.

Drawing on attribution theory, assimilation-contrast theory, and negativity bias, this research examines the impact of brands’ socially (ir)responsible practices on consumers’ multiple price perceptions. Based on Van Westendorp’s Price Sensitivity Meter and two experimental studies in different product categories (apparel and consumer electronics), we show that consumers’ multiple price responses (i.e.,
too cheap, cheap, expensive and too expensive prices) increase (decrease) following a brand’s responsible (irresponsible) behavior. Moreover, our studies reveal that these effects differ in their magnitude: The increments in the too cheap price element after CSR exposure are higher than the reductions in this price element after CSI exposure. The latter result also holds for the cheap price, however, is limited to the apparel product category. Conversely, we find in both studies that the magnitude of the decrease on the higher end of the price responses (i.e., expensive and too expensive)
resulting from CSI is greater than the magnitude of the increase in these price responses following CSR.

We advance previous research in the field of CSR/CSI by a) explicitly focusing on consumers’ multipleprice perceptions as an outcome variable and b) comparing the change in consumers’ multiple price perceptions resulting from a brand’s CSR versus CSI activity. Our research offers a first attempt to analyze the impact of CSR/CSI on price levels corresponding to distinct consumer perceptions and thus – compared to attitudes and purchase intentions – offers a proxy closer to actual behavior. From
a practical perspective, assessing consumers’ price perceptions for brands imbued with CSR and for brands violating the moral imperative can help managers implementing distinct pricing strategies.

Department of Marketing and International Business
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Peer reviewed
Austrian Fields of Science 2012
502019 Marketing
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