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

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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.

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Correspondence to Millissa F. Y. Cheung.

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Appendix 1: Items of CPER, purchase behavior, word-of-mouth, and ethical beliefs

Appendix 1: Items of CPER, purchase behavior, word-of-mouth, and ethical beliefs


Product Fairness

  • It offers products that are safe and fit for their intended uses.

  • It offers products that do not contain deceptive packaging/quality specifications.

  • Information regarding all substantial risks associated with the product is fully disclosed.

  • When selling products, its employees treat customers respectfully. (Note: this item was removed after EFA and CFA)


Price Fairness

  • The pricing of products is fair.

  • All extra costs and added features are clearly identified in products, if any.

  • The full price associated with any purchase is fully disclosed.


Non-deception

  • It does not exaggerate the benefits and characteristics of its offerings.

  • It does not take advantage of less experienced customers to make them purchase.

  • It does not attempt to persuade customers to buy things that they do not need.


Fair Trade

  • It offers a wide assortment of fair-trade products.

  • It publicizes the logos, meanings, and importance of fair-trade products.

  • It offers fair prices for fair-trade products.


Green Products

  • It offers a wide assortment of green products.

  • It publicizes the logos, meanings, and importance of green products.

  • It offers fair prices for green products.


Purchase Behavior

  • You _____ buy products from the shop (never; rarely, occasionally, frequently; always).

  • You _____ products from the shop (do not buy; buy a few; buy some; buy many; buy a lot of).

  • You spend _____ money on the shop’s products (no; a little; some; quite a lot of; a lot of)

    Word-of-Mouth

  • I would recommend the shop to someone who seeks my advice.

  • I encourage friends and relatives to do business with this shop.

  • I say positive things about the shop to other people.

    Ethical Beliefs.

  • A person should ensure that his/her actions never intentionally harm others.

  • A person should never psychologically harm others.

  • A person should not sacrifice the welfare of others.

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Cheung, M.F.Y., To, W.M. The Effect of Consumer Perceptions of the Ethics of Retailers on Purchase Behavior and Word-of-Mouth: The Moderating Role of Ethical Beliefs. J Bus Ethics 171, 771–788 (2021). https://doi.org/10.1007/s10551-020-04431-6

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