Is Honesty the Best Policy? Examining the Role of Price and Production Transparency in Fashion Marketing

Naeun L. Kim, Gwia Kim and Lori Rothenberg
Additional contact information
Naeun L. Kim: Department of Design, Housing, and Apparel, College of Design, University of Minnesota, St. Paul, MN 55108, USA
Gwia Kim: Department of Textile and Apparel, Technology and Management, Wilson College of Textiles, North Carolina State University, Raleigh, NC 27606, USA
Lori Rothenberg: Department of Textile and Apparel, Technology and Management, Wilson College of Textiles, North Carolina State University, Raleigh, NC 27606, USA

Sustainability, 2020, vol. 12, issue 17, 1-18

Abstract: Transparency is one of the most prominent demands of consumers today. Numerous fashion brands are responding to this demand for transparency by sharing information on the cost-breakdown of products and manufacturing processes. Research shows that transparency can become a vital tool for product, process, and business model innovation. Nonetheless, little is known about the role of transparency and how it affects consumers’ perceptions of a brand in a fashion context. By applying the signaling theory, the purpose of this study is to investigate how consumers react to fashion brands that provide price or production transparency. The study further examines whether the extent of information disclosure and perceived fairness of the information also play a role. An experiment of nine scenarios using a fictitious fashion brand was developed, and data were collected from 349 American consumers through Amazon Mechanical Turk (MTurk). The findings suggest that both price transparency and production transparency positively affect the overall brand equity and consumers’ purchase intentions as long as the information is perceived to be fair regardless of the extent. This study extends our current understanding of the role of transparency as an extrinsic signal and also suggests that brand transparency may be another key dimension of brand equity.

Keywords: transparency; price; production; supply chain; signaling theory; brand equity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/17/6800/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/17/6800/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:17:p:6800-:d:402215

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().