Pay-premium for green brands: evidence from an emerging country

Abstract

Purpose This study aims to examine how green branding strategies affect pay-premium behaviour of consumers for high- vs low-involvement green products in an emerging country. Design/methodology/approach Data were collected from 500 consumers by survey method, and structural equation modelling was run to analyse the hypotheses. Findings Consequently, it was found that for involvement level consumers’ pay-premium behaviour was affected indirectly by perceived quality, and directly by green brand equity and brand credibility. Moreover, in addition to those factors, for low-involvement green products, performance risk and financial risk have an impact on willingness to pay more; however, for high-involvement green products, only performance risk influences the pay more behaviour of consumers. Research limitations/implications In the research, two involvement levels and two brands were used. Brand names in particular may have caused a bias in the measurement. And the findings are limited by the sample, which includes respondents from an emerging country. Practical implications Managers should focus on green brand equity, brand quality and credibility to support willingness to pay more for green products. Moreover, they should monitor performance risk and financial risk perceptions, which may differ according to the involvement levels. Originality/value There is no other study, at least to the best of the author’s knowledge, testing the effects of brand-related factors on consumers’ willingness to pay-premium for green brands.