Professional Documents
Culture Documents
Ethical products have become quite prevalent nowadays. These products are
produced and delivered based on a set of ethical rules and include an extensive
range of product categories from coffee beans to detergent to apparel. Regardless
of the product category, ethical products are usually more expensive than their
conventional alternatives. The purpose of this higher price is to compensate for the
increased cost associated with the production and delivery of ethical products.
Perceived value
Perceived value results from evaluating the utility of a product based on what
consumers expect to receive from that product in return for the money they give up
to own it. The perceived value consists of three dimensions: the consumers’
perception on the performance and quality of the product (functional value); the
feelings generated by that product (emotional value); and the consumers’ belief on
how society perceives them by purchasing or using that product (social value). If
consumers perceive the utility of the product is worth more than the money they
are giving up, they will purchase the product. With regards to most products, the
functional value is usually more salient than the emotional and social value. This is
because in most products, performance and quality are usually more attention-
grabbing than the feelings and beliefs created by those products. As a result,
consumers are usually willing to pay more and deem a product more worthy when
that product is believed to have a higher quality and/or performance.
However, there are certain ethical products that provide no additional benefits for
the consumer despite being more expensive than their conventional alternatives.
Examples include eco-friendly products which serve to preserve the environment
and fair-trade products which focus on the well-being of distant others. Compared
to their conventional alternatives, the performance and quality of these ethical
products are similar, if not lower. Therefore, if consumers do not perceive a strong
emotional and or/social value from these ethical products, it will be extremely hard
for them to justify the higher price of these products and consequently the chances
of purchasing them will be low. In this context, price is used as a cue to justify the
ethical product’s value, suggesting that changing the price can influence
consumers’ perceived value for these products.