Why Are Products of Social Enterprises Not Purchased Continuously? : A Re-Purchase Model for Social Enterprises

Abstract

Purpose: In the last decades, practitioners, including governments, have been interested in social enterprises (SEs) as a new sector, called the “fourth sector,” because of their social goals through commercial activities. Although many countries are supporting SEs because of their high evaluation of social contributions, in reality, they are highly dependent on government support, and many SEs are facing difficulties in sustainable management. Due to this issue, some studies have been conducted for the sustainable management of SEs, but research on SEs does not seem sufficient yet. For its sustainable management, the mechanisms between the important factors affecting the sustainable purchase intention of SEs must be understood from a marketing viewpoint. Thus, this study aims (1) to investigate the impact of SEs on their products; and (2) to provide a re-purchase model for SEs. Design/methodology/approach: This study consists of two empirical studies collecting data from consumers who have purchased SE’s products in South Korea. Study 1 is an exploratory study to elicit sub-constructs for SEs and their products. Study 2 tests the hypotheses using structural equation model analysis. Findings: The result of Study 1 revealed four sub-constructs for SE’s corporate associations (environment friendly, local community oriented, social responsibility, and employee welfare) and four sub-constructs of the product associations (functional, symbolic, emotional, and social). Meanwhile, the results of Study 2 show that some hypothetical paths in the conceptual re-purchase model for SEs are significant. Environment friendly only affects functional, whereas local community oriented affects symbolic and social. Meanwhile, social responsibility and employees’ welfare affect all four product associations, as hypothesized. Moreover, functional and symbolic affect only sensory experience; social affects only cognitive simulation; while emotional affects both sensory experience and cognitive stimulation. Ultimately, both sensory experience and cognitive stimulation, which were affected by corporate and product associations, positively influence re-purchase intentions. Research limitations/implications: This empirical research is meaningful in that it provides understanding about SEs from a marketing perspective. It initially provides the re-purchase mechanism for SEs to contribute a theoretical development for the emerging SE context. It also offers insights and managerial implication directions on how to market for the sustainability of SEs.