When will price increases associated with company donations to charity be perceived as fair?

Abstract

When implementing cause-related marketing campaigns, companies sometimes increase prices to partially cover some of the costs of the campaign. However, our knowledge regarding the conditions under which consumers perceive these increases as fair and are willing to bear some of the costs is lacking. Using a framework based on attribution theory principles, we show in four studies that the company donation amount positively affects consumers’ perceived price fairness and purchase intentions. More importantly, our study highlights a positive moderating impact of the company’s corporate social responsibility (CSR) reputation and a negative moderating effect of company–cause fit on the donation amount–perceived price fairness relationship. The timing of the price increase also plays a key moderating role on this link. All four studies also provide insights into the underlying process of these moderating effects in terms of attributed company motives.