The Effect of Consumer Perceptions of the Ethics of Retailers on Purchase Behavior and Word-of-Mouth: The Moderating Role of Ethical Beliefs

Abstract

This paper explores how consumers perceive retailer ethics. Based on a review of the marketing and consumer research literature, we conceptualize consumer perceptions of the ethics of retailers (CPER) as a multidimensional construct and propose that its effects on consumer purchase behavior and word-of-mouth communication are more salient when consumers have strong rather than weak ethical beliefs. The model was validated using a random sample of 399 respondents in a collectivist society. The results of structural equation modeling confirmed that CPER is a second-order construct comprising product fairness, price fairness, non-deception, fair trade, and green products. CPER positively predicted consumer purchase behavior and word-of-mouth communication. Moreover, ethical beliefs moderated the positive relationship between CPER and the word-of-mouth communication of consumers with strong ethical beliefs but did not moderate the relationship between CPER and purchase behavior. The implications of the findings are discussed.