Open Universiteit

Please use this identifier to cite or link to this item: http://hdl.handle.net/1820/7674
Title: Factors having an effect on retailers' willingness to pay premium for socially and environmentally responsible fashion.
Authors: Lauwers, K
Issue Date: 13-Feb-2017
Publisher: Open Universiteit Nederland
Abstract: FACTORS HAVING AN EFFECT ON RETAILERS’ WILLINGNESS TO PAY PREMIUM FOR SOCIALLY AND ENVIRONMENTALLY RESPONSIBLE FASHION ABSTRACT Sustainability and environmentally friendly entrepreneurship are becoming important among consumers. In different domains like the food industry, transport or construction consumers are searching and exploring other ways of consuming which are more environmentally friendly and socially responsible. Organic food in the food-industry is becoming a familiar concept. Also in transportation, consumers are looking to contribute in the reduction of CO2-emissions. The apparel sector is worldwide business, affecting environment and people. The traditional clothing sector underwent some negative publicity about compromising production conditions in the manufacturing. The clothing sector responded by introducing organic products and Fair Trade Production (Goworek et al, 2012). Thereafter, interest in sustainable clothing production grew and consumers are becoming more aware of the environmentally friendly material and the ethically responsible manufacturing. Both, social and environmental responsibility, are much discussed topics. Shen et al. (2012) investigated the relationship between ethical fashion and the purchase behaviour for consumers. They concluded that the relationship between knowledge and support of socially and environmentally responsible business has been proved to be the most important aspect of impact on developing sustainable businesses. This research investigates the support in socially and environmentally responsible business and the willingness to pay premium, more specifically the retailers or small fashion boutiques. Most research about environmental or fair trade issues focused on the end-consumers, where this research focusses on the retailers, who are a main element in the supply chain. This research is looking to find more answers in what factors have an effect on retailers’ willingness to pay premium for socially and environmentally responsible products"? The outcome of the research can be significant for all players in the supply chain like farmers, manufacturers, distributors, shops and consumers. The research objectives are to: • identify retailers’ knowledge (awareness on child labour or exploitation of workers), concern (interest in ethically manufacturing, humane handling of animals), beliefs (influence of ethical beliefs towards consumption) for supporting socially and environmentally responsible business • explore the influence of brand image and CSR on willingness to pay premium for socially and environmentally responsible business • analyze and explore the retailers’ support and how this results in willingness to pay premium for a socially and environmentally responsible product. For this research, the model of Shen et al. (2012) is used and applied on retailers. This theoretical model also includes the corporate responsibility of the retailers and brand image and the impact on the willingness to pay premium for ethical products an element of the model of Anselmsson et al. (2014). The combination of the two existing models will extend the research for factors that influence retailers’ willingness to pay premium for ethical products. This adopted model contributes to new views and elements to improve support and willingness to pay premium for socially and environmentally responsible products. This research is important to complete other scientific researches in fashion or other branches. The hypotheses are tested, using survey data collected from retailers of small fashion boutiques in Belgium through a questionnaire. 88 questionnaires were returned and were used for the data analysis with Structural Equation Modeling (SEM). The model is tested on convergent validity, indicator reliability, composite reliability and discriminant validity, all be found to be significant, which means that all criteria in the model have a fit and the model is reliable. Seven hypotheses are tested whereof five found to be significant for the total tested population. This research confirms the current model that shows the relationships between knowledge, concern and CSR and support for socially and environmentally responsible business, brand image and support for socially and environmentally responsible business and willingness to pay premium. Summarized this research contributes to science by confirming an earlier tested model of Shen et al (2012) in the fashion industry and Anselmsson et al (2014) in the food industry and extending it to the retailers in the fashion sector. The research shows the relationships between knowledge, concern and CSR and support for socially and environmentally responsible business and brand image and support for socially and environmentally responsible business and WTP. We give some recommendations that can be used by companies in the fashion industry or other industries in the future. If manufacturers want to improve the support for socially and environmentally responsible business it is important to know the factors that convince them. This can be done by putting forward their CSR strategies. Knowing knowledge and concern are also important elements for increasing support, it is important for manufacturers to be transparent about working conditions, resources, choice of material, transport, waste,… towards retailers and consumers. As the model is still not complete further research should focus on identifying determinants, such as concern, beliefs, knowledge and CSR, of support for socially and environmentally responsible business and possibly other determinants, such as brand image, CSR and support for socially and responsible business, of willingness to pay premium. Unfortunately there was for this research a low response rate. This should serve future research to look for another way of data collection.
URI: http://hdl.handle.net/1820/7674
Appears in Collections:MSc Management Science

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