Moderating the relationship between price and perceived value of ethical products.

Abstract

Interest in ethical aspects associated to product acquisition and consumption is a growing trend among consumers. In this context, the concept of “product with ethical attributes” has arisen to refer to products with explicit social and environmental characteristics. However, one of the factors that most hinders the purchasing of these products is certainly price. Given the difficulty of reducing price, the question that arises is the extent to which other product attributes can attenuate the negative impact of price on perceived value. We assume that the special benefits associated to this type of products are, at a different level, attenuators of the relationship between price and perceived value. Focusing on Fair Trade organic coffee, hypotheses are tested regarding survey data from 407 customers. They were interviewed in an actual purchasing scenario. The models are tested using conventional Structural Equation Models and the Latent Moderated Structural Equation method. The results obtained shed some light on a highly generalised belief that the marketing of these products can only be improved by reducing their price. However, although a price reduction could be desirable, albeit complicated in this product category, its effects could be reduced by acting on other variables such as the ethical aspects, quality and healthiness of this product category