Sustainable luxury is a strategic issue for managers and for society, yet it remains poorly understood. This research seeks to clarify how corporate social responsibility (CSR) actions directly and indirectly (through brand value dimensions) affect consumers’ willingness to pay a premium price (WTPP) for luxury brand products, as well as how a long-term orientation (LTO) might moderate these relationships. A scenario study presents fictional CSR actions of two brands, representing different luxury products, to 1,049 respondents from two countries (France and Tunisia). The results of a structural equation modeling approach show that the luxury brands’ CSR actions negatively affect customer WTPP overall and for each brand. The luxury brands’ functional and symbolic value dimensions positively mediate the effects of CSR actions on WTPP, whereas social value does not. The effects of CSR actions and brand symbolic value on WTTP do not differ between countries. The effect of functional value on WTPP differs across countries, such that it is stronger for high-LTO than low-LTO cultures. Inversely, the effect of social on customer WTPP is stronger for low-LTO than high-LTO cultures. These findings have theoretical and practical implications for luxury brand managers.
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Appendix 1: Brands investigated
Brand 1 (for women): Acqua di Gioia (Giorgio Armani)
Brand 2 (for men): Rolex
Appendix 2: Measurement Items and Variable Sources
|1. CSR actions||
CSR1. This company is really concerned about its employees’ health care|
CSR2. This company offers efficiently manufactured products
CSR3. This company is helpful to others in need
CSR4. This company adheres to the law on traceability and product origin
|Adapted from Amatulli et al. (2018)|
|2. Brand functional value||
Func1. In my mind, the higher price of this luxury brand equals higher quality|
Func2. Being higher in price makes this luxury brand more desirable
Func3. Higher priced luxury accessories from this luxury brand mean more to me
|Adapted from Shukla et al. (2015)|
|3. Brand social value||
Soc1. Owning this luxury brand indicates social status|
Soc2. Owning this luxury brand is a symbol of achievement
Soc3. Owning this luxury brand is a symbol of wealth
Soc4. Owning this luxury brand is a symbol of prestige
|Adapted from Shukla et al. (2015)|
|4. Brand symbolic value||
Symb1. I am very attracted to this luxury brand|
Symb2. I would like to own this luxury brand before others
Symb3. I am more likely to be attached to unique luxury brands like this one
|Adapted from Shukla et al. (2015)|
|5. Willingness to pay a premium price||
WTPP1. I am willing to pay a higher price for this luxury brand than for other brands|
WTPP2. The price of this luxury brand would have to increase quite a bit before I would switch to another brand
WTPP3. I am willing to pay a lot more for this luxury brand than for other brands
|Adapted from Netemeyer et al. (2004) and Amatulli et al. (2018)|
|6. Long-term orientation||
LTO1. Individuals should engage in long-term Planning|
LTO2. Individuals should give up today’s fun for success in the future
LTO3. Individuals should work hard for success in the future
|Yoo et al. (2011)|
Appendix 3: Means, Standard Deviations, Correlation Matrix, and Discriminant Validity
|Construct||Means (SD)||Discriminant validity assessment (correlations)a|
|1. Brand CSR actions||5.24 (1.01)||AVE = 0.57|
|2. Brand functional value||3.75 (1.54)||0.34||AVE = 0.84|
|3. Brand social value||4.39 (1.75)||0.43||0.58||AVE = 0.92|
|4. Brand symbolic value||3.79 (1.83)||0.57||0.67||0.74||AVE = 0.91|
|5. WTPP||3.02 (1.78)||0.24||0.74||0.51||0.66||AVE = 0.80|
|6. Long-term orientation||5.40 (1.12)||0.55||0.28||0.44||0.47||0.18||. AVE = 0.72|
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Cite this article
Diallo, M.F., Ben Dahmane Mouelhi, N., Gadekar, M. et al. CSR Actions, Brand Value, and Willingness to Pay a Premium Price for Luxury Brands: Does Long-Term Orientation Matter?. J Bus Ethics 169, 241–260 (2021). https://doi.org/10.1007/s10551-020-04486-5
- Corporate social responsibility
- Luxury brand value
- Willingness to pay a premium price