The Influence of Organic Product Classification On Charitable Contributions Embedded in Retail Prices

Levens Michael ()
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Levens Michael: Walsh College, Michigan, USA

Economics and Culture, 2017, vol. 14, issue 1, 31-40

Abstract: Research on embedding direct charitable contributions into purchase transactions through increasing product price has revealed mutual benefits for charitable organisations and for-profit companies. This process is referred to as the embedded premium (EP). The potential for this type of mutually beneficial cause marketing has been shown to apply to a wide range of products. The fastest growing product classification in the United States, organic products generally cost more than their non-organic alternatives. The basis of this research is to examine if organic products enhance the utility of EP offerings. Eight different organic and non-organic food products are presented in a 64-block, single choice set design to a national sample of consumers with choice options between current market price and current market price plus 5% price premium with entire premium going directly to charity. The results of the research indicate that organic products with EP were, on an average, chosen almost five percentage points less frequently than similar EP choices involving non-organic products.

Keywords: cause marketing; charitable contribution; embedded premium; organic (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecocul:v:14:y:2017:i:1:p:31-40:n:3

DOI: 10.1515/jec-2017-0003

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