Effects of price premium and product type on the choice of cause‐related brands: a Singapore perspective

Abstract

This exploratory study investigates whether product type, utilitarian versus hedonic, affects consumers' likelihood of choosing a brand linked to a cause. The sample consists of 128 young Chinese Singaporeans. Unlike prior research done in Western countries, the respondents in this study were more likely to buy cause‐linked brands for practical than for hedonic products. They were also more likely to pay a price premium for cause‐linked practical products. This difference is attributed to the Confucian values that are espoused by the Chinese. Additionally, finds that specifying the amount donated to the cause increases the likelihood of purchasing cause‐linked brands that are priced at 10 to 25 percent premiums over comparable alternatives. Discusses implications for marketers and future research directions.

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