Products with Socially Responsible Labels Draw Premium Prices with Consumers

These are important distinctions, stresses Verteramo Chiu, for the company who produces the product. “Marketers need to first understand who they are targeting and then change the product’s label to meet the buyer’s desires,” he explains. For instance, if a company is targeting paternalistic altruists, then the product label must talk about the community projects that will be supported by the donation to secure the sale.

Interestingly, when asked if an ethically produced, organic labeled product would trump all, Verteramo Chiu says there is no correlation between the two but his study did not focus on this element. However, he says research around a possible correlation would be relevant.

Going forward Verteramo Chiu is heading to South America to see if the donations allocated from the purchases of ethically produced products are having the intended effect on growers and their communities. If not, he will ensure buyers know the truth.