Premiums Paid for What You Believe In: The Interactive Roles of Price Promotion and Cause Involvement on Consumer Response

Abstract

Building on the persuasion knowledge model, the present research suggests that price discounts have divergent effects on consumer response to fairtrade products depending on the level of personal relevance to fairtrade (i.e., cause involvement). More- (vs. less-) involved consumers are engaged in more effortful processing of information to evaluate fairtrade products. For this reason, in response to a price discount, more-involved consumers access persuasion knowledge that entails suspicion of the brand’s ulterior motive for offering the discount and its fairtrade claim. Thus, they are likely to perceive the brand as less credible and show decreased purchase intention and brand attitude. Conversely, less-involved consumers are likely to infer the brand’s persuasion motive by trusting the brand and believing its claim. By accessing persuasion knowledge that involves trust and belief, less-involved consumers perceive the brand as more credible, exhibiting a favorable response to fairtrade products on price promotion. The present research also discusses how to mitigate the negative effects of price discounts for more-involved consumers: When a justifiable reason for a promotion is provided, the negative effect of the price discount disappears among more-involved consumers.