Name: R.M.L. Brackel Student nr: 10704698
Institution: Amsterdam Business School Study: MSC Business Studies
Specialization: Marketing
Course: Master Thesis Supervisor: J. Demmers MSc Date: 21-‐01-‐2015
“How does social distance and consumer involvement affect
willingness to pay, when firms proactively disclose information?”
Statement of originality
This document is written by Romy Brackel who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Table of content
Abstract page 4
Introduction page 5-‐7
Contributions page 8
Literature review page 9-‐18 Research method page 19-‐24
Results page 25-‐39
Conclusion, discussion and limitations page 40-‐42 References page 43-‐50 Appendix page 51-‐53
Abstract
The purpose of this research is to extend the research field on transparency in
marketing in this so-‐called “age of transparency”. Nowadays, consumers claim to need for transparency by the brands, but more knowledge is required on how and if
transparency actually also holds positive benefits for the company when disclosing information. Companies find it hard to make information available at such a fast pace without running risks of losing customers due to possible disclosure of negative
information. This study explored whether companies should engage in these marketing transparency efforts, whether brand disclosure compared to consumer disclosure and non-‐disclosure actually increases consumer involvement and willingness to pay (H1, H2) and tries to establish first findings on how social distance could possibly influence this relationship (H3) with business to consumer products in advertising. Literature on social distance explains why consumers overvalue what is socially close and undervalue what is socially distant; therefore a low social distance is expected to increase
willingness to pay and consumer involvement. A total of five pre-‐tested advertisements were designed for the experiment. In the conditions a distinguish was made between transparent and non-‐transparent, brand disclosure and consumer disclosure, high and low social distance to measure the effect on willingness to pay and consumer
involvement.
Results show that transparency actually did not increase willingness to pay nor increase the consumer involvement. Furthermore a low neither high social distance increased willingness to pay or consumer involvement. Overall, this experiment provided no proof of positive benefits for being transparent.
1. Introduction “The Age of Transparency”
Fournier and Avery (2011) call this “the age of transparency”. Consumers demand authenticity, more convenient access to relevant, comprehensive, quality and true information. Nowadays, there are more educated customers with higher needs, they have become more conscious about their society and environment; there is a clear shift to more sustainable products/services in the market (Bhaduri and Ha-‐Brookshire, 2011). According to Cohn and Wolfe (2013), customers value corporate transparency. Around 70% considers transparency and openness in purchase decisions, and is the most important factor following price and quality.
Originally demand for transparency started off in the financial market more than a decade ago (Walter, 2004). To be able to make proper investment decisions investors wanted more transparent information about the financial data of the company (Walter, 2004), this increased need for information was caused by the global financial crisis of 2008 which created a general distrust towards companies by consumers (Kirby, 2012). The annual financial reports are a key performance indicator for investors, they base their analysis on these reports whether to invest in the company or not (Perrini and Tencati, 2006).
The need for transparency moved towards a global concern and has developed rapidly across more product and service categories over the years and it has serious
implications for major private and public sectors organizations (Cohn and Wolfe, 2013). For example in the media, the safety of food in the supply chain and working conditions in apparel industry have become an increasingly interesting issue (Bhaduri and Ha-‐ Brookshire, 2011; Latvala, 2010). Due to the need for transparency companies share more information than ever before, but information transparency may reveal
being in conflict about what, when and how much they should actually disclose (Fournier and Avery, 2011).
Consumers can attribute claims either to the advertiser's desire to sell the product or to actual characteristics of the product such as by communicating that a low percentage goes to the farmer who produced the potato in the Netherlands. Such inclusion of negative information leads the consumer to think that the advertiser is telling the truth and additionally this enhances the perception of advertiser credibility (Eisend, 2006). But according to the Information Integration Theory consumers may perceive
information too negative. According to this theory the information can be perceived as important and unfavorable and this could be a main reason why companies find it hard to make information available at such a fast pace without running risks of losing
customers due to possible negative information.
Furthermore, due to technological developments the number of customer touch points skyrocketed (Edelman, 2010). These developments created the ability for companies to get the consumer actively involved with the brand more easily. This requires new skills and capabilities of the firm, also for the downsides that come with the digital age. Because of commonly used social network sites negative or positive information can be instantly exposed across the Web and can have major consequences for the brand equity (Fournier and Avery, 2011). Therefore, it becomes harder to conceal information from consumers, for many companies managing these resources became part of risk
management (Carter and Rogers, 2008; Peppers and Rogers, 2013). Companies started to conceal the information themselves and even negative information. Literature by Eisend (2006) on two-‐sided communication shows that, under specific circumstances, disclosure of unfavorable information can positively influence consumer preferences. By disclosing negative information they might, perceive truthfulness and source credibility,
therefore trigger attention, could strengthen attitudes by countering mild attacking arguments, and finally result in more favorable brand attitudes leading to higher purchase intentions. This study defines transparency as “a situation in which business and financial activities are done in an open way without secrets, so that people can trust that they are fair and honest” (Cambridge Business Dictionary online, 2014). This study focuses on the effect of transparency in marketing communication by the firm on
increased willingness to pay. Especially, if social distance could possibly influence the relationship of transparent marketing and increase willingness to pay. Brands such as Starbucks are putting transparent marketing into practice for a couple of years already. Starbucks communicates anything they do on social media sites, here consumers like and respond more positive to posts on Facebook that relate to people in their own country or community like: “Great program… love that you are investing in the
community”, as compared to for example when Starbucks is helping farmers in Africa the Facebook post is less liked and has much fewer positive responses like: “How kind of Starbucks supporting these Africans, but what about the “Create jobs in the USA
program?!” (Starbucks, 2015). This could be explained by the social distance, which is part of the construal level theory, a leading theory on how more distant events
(geographically, socially etc.) are differently evaluated because they are differentially construed (Trope and Liberman, 2003). This different evaluation is explained by whether the affected person or social group is socially close or distant. The framework for the psychological distortions and biases of consumers, explains the bias in the cost-‐ benefit analysis i.e. why consumers overvalue what is socially close and undervalue what is socially distant. Which therefore could imply that customers are willing to pay more when transparent marketing with a low social distance is communicated
2. Contributions
This research contributes scientifically to a better understanding of the underlying psychological process when consumers experience transparent marketing. Recent studies demonstrate that transparent marketing increases purchase intentions. Measuring ways how the transparency effect could become even more valuable in the eyes of the consumer, like with low or a high social distance, would clarify tactical transparency issues for the company even more.
Defining the effect of social distance and consumer involvement contributes on how messages can be shaped to further increase willingness to pay. When understanding the effect on willingness to pay when consumers encounter transparency in a high or low social distance setting and whether the consumers became more or less involved with the product after being exposed to a certain social distance, this may facilitate effective formulated transparent marketing communication to increase purchase intentions. It may help fulfill the consumer need for transparency on a more in-‐depth level, within the marketing context. Concluding the results of this study should define in what ways transparent communication is most appealing according to consumer behavior.
3. Literature review
3.1 Transparent marketing increases willingness to pay
A firm can choose to proactively disclose information on different types of transparency such as, supply chain, organizational, cost and technical transparency (Hultman and Axelsson, 2007). But the major issue for companies when applying the transparency tactic is the risk of losing customers because the information is perceived as too negative. For example, by clarifying how many calories a meal, like a hamburger contains, might influence product choice or willingness to pay negatively. This consequence is explained by the Information Integration Theory (Anderson, 1971), according to IIT attitudes are formed and changed based on each piece of information having two qualities; value and weight. The weight is the information’s perceived importance of the information and the value of a bit of information is its evaluation, whether it is favorable or unfavorable. By sharing the number of calories in a hamburger the weight can be of high importance and the value of the information is unfavorable. This is an example for why companies find it hard to make information available at such a fast pace without running risks of losing customers due to possible negative
information. On the other hand transparency can turn out to have a positive effect due to gained knowledge about the product in the eye of the consumer. Recently conducted studies suggest that the proactive disclosure of relevant information by a firm in marketing communication (transparent marketing) has a positive effect on product choice and consumer willingness to pay (Demmers et al., 2014).
Moreover, a study by Carter and Curry (2010) on supply transparency suggests that consumers do not always follow classic economic theory i.e. always choose the lowest price, whatever the allocation of money in the supply chain may be, therefore
consumers prefer a higher allocation to the sympathic agent (for example the artist who made the album) and therefore often choose paying a higher price when it is disclosed that more money would be allocated to the sympathic agent in the supply chain. Hence, there is strong evidence that transparency does add value in the eye of the consumer, even if they have to pay a premium price for it, which reflects an increased willingness to pay.
This holds even when the information is not unambiguously positive. Moreover, because the firm proactively discloses the information itself, in comparison to disclosure by fellow consumers, this leads to higher perceptions on both the relevance and positivity of the information (Demmers et al., 2014). These findings suggest that a firm can
positively influence willingness to pay and product choice of (potential new) consumers by proactively disclosing information. Also by voluntarily disclosing partially negative information the brand is perceived as being honest and telling the truth and hereby increasing credibility of the brand in the eye of the consumer. According to the stealing thunder strategy it is better to disclose information yourself and gain credibility for it before others such as consumers find out, expose the information and cause negative publicity. Therefore willingness to pay would only increase when the company itself instead of a consumer disclosing the information.
H1: Willingness to pay is higher (lower) when a firm (consumer) discloses information.
3.2 The role of social distance in explaining consumer behavior
While Demmers et al. (2014) explain the effect of transparent marketing resulting in increased willingness to pay, however there might be factors that moderate and mediate this effect.
Social distance is a psychological dimension of the Construal Level Theory that describes the relation between psychological distance to the extent of how abstract or concrete an object is being thought of by people. According to CLT the closer the object is the more concrete it will be thought of (low level construal) like focusing on the details. In contrast to the more distant the object is the more abstract it will be thought of (high level construal) by for example looking at the overall situation (Trope and Liberman, 2011). Opposed to an objective distance between two persons, social distance is the psychological distance between two (groups of) people. Social distance is defined as “The perceived or desired degree of remoteness between a member of one social group and the members of another, as evidenced in the level of intimacy tolerated between them” (Oxford Dictionaries, 2015).
When framing a message a high social distance reduces the positivity because a low social distance e.g. in-‐groups are perceived as more positive than a high social distance e.g. out-‐groups (Liberman, Trope and Wakslak, 2007). Assuming consumer prefer a low social distance to the disclosed information. Additionally according to Dhar and Kim (2007) a construal manipulation does affect the ability to process the message abstract or concrete and eventually affects the decision-‐making. Therefore the difference in construal level, high or low, affects people consideration when purchasing items. This study will be looking at if a low social distance does actually increase consumer involvement and willingness to pay with transparency. Little research has been done in
the field of the persuasiveness of social distance dimension. However, examples can be derived from some studies, although they are in a different context.
For example Sargeant et al. (2004) studied the relation between social distance and motive to donate to charity. Results show that people intent to choose a charity to donate to, which they received profit from in the past or believe that they will profit from it in the future. This means it is part of a direct and personal experience referred to as a near social distance. Clearly, according to Sargeant et al. (2004) this does not only apply to themselves it also applies relatives, loved ones and friends also compared to a low social distance. Assuming transparent information makes them better off because of gained knowledge about how the donation to charity might profit them personally or people closely related to them (like people within their community), both a low social distance then the low social distance frame would be more persuasive than the high social distance frame. Therefore consumers might intent to choose the product over others and be willing to donate more.
Additionally Park (2010) explored when psychological distance would have a
moderating effect on evaluation. The results demonstrate that psychological distance only influences when there is either a high need for cognition or when individuals carefully think. Possible explanations as suggested by Trope and Liberman (2003) are that it may be that psychological distance influences the likelihood of elaboration. While the focus on high social distance encourages contextual elaboration, low social distance encourages elaboration of goal relevant information (Petty and Cacioppo, 1986). In comparison to Sargeant et al. (2004) and Park (2010) findings, Nan (2007) found contradicting results using the social distrance frame. Nan (2007) used a high vs. low social distance frame, called the societal-‐individual frame, to translate the social distance into a message. This frame is based on compliance (or not) towards the
community (Nan, 2007). An example of a high social distance frame is: “Taking public transit instead of driving a car for daily commute provides cleaner air for people in your community” (Nan, 2007, p. 493). The low social distance frame is based on compliance (or not) towards the individual (Nan, 2007). An example of the low social distance frame is: “Taking public transit instead of driving a car for daily commute provides cleaner air for you” (Nan, 2007, p. 494). The results of the study did not show that the low social distance frame is more persuasive than the high social distance frame. On the contrary, she found that the high distance frame was more persuasive than the low distance frame when the social entity was distant. Moreover, according to the study inaccurate results could be caused by inadequate statistical power searching for small effects (Braker, 2013). In addition to, this being the only study that investigated this frame and therefore more research is necessary to make statements about the persuasiveness of the societal-‐ individual frame. This study will continue with the social distance frame of Nan (2007) in a different context. Although Park (2010) proved how psychological distance
moderates product evaluations Nan (2007), showed the exact opposite results in product evaluations.
The assumption of this study is the opposite of what has been found here, low social distance (individual frame) will be more persuasive than the high social distance (societal frame). And that when consumers are confronted with a low social distance framed message (vs. high social distance framed message) they are willing to pay a higher price for the product as is conceptualized in figure 1. This assumption is supported by Hofstede’s Individualism-‐Collectivism dimension (2001) where The Netherlands scores high on individualism. An individualistic country: believes that nothing is more important than the individual and therefore the individual framework referred to as socially close would be more persuasive (Triandis, 1995).
Figure 1. Conceptual model transparent marketing
CLT defines several types of psychological distances; temporal distance, spatial distance, hypothetical distance and social distance.
According to Kim Li and Zhang (2008), when two dimensions of psychological distance (i.e. temporal -‐ and social distance) are involved in an event (i.e. product) they
interactively influence the evaluations of an event. Results show when both of the two dimensions are proximal, the event will be perceived as proximal (close) and construed at low-‐level construals. However, when either one of the dimensions is psychologically distal (far), the event will be perceived as distal and construed at high-‐level construals. So evaluations are more consistent with the value associated with low-‐level construals when both dimensions are proximal and when either one dimension is distal evaluations are more consistent with the value associated with high-‐level construals.
The theory describes that when the object happens to a socially close person or group the more concrete it will be thought of, while when the object happens to a more socially distant person or group, it will be thought of more abstract.
This means that when confronted with high-‐level construals, such as socially distant, consumers would simultaneously prefer abstract information. While when consumers are confronted with low-‐level construals, such as socially close, they would prefer concrete information as shown in figure 2 (Trope and Liberman, 2003; Kim and John, 2008). Suggesting that transparent information dimension makes the message more proximal because this information is considered more concrete than abstract thus would be more consistent with low-‐level construals and the transparent information communication should be more effective when aligned to the low level construal characters.
Table 2. Distinguishing high-‐level and low-‐level construals (Trope and Liberman, 2003, p. 405)
Figure 2. High and Low level construal characters
It is necessary to further explore the influence of social distance on purchase intentions made with transparent marketing. Especially, which message context is better to deliver to increase purchase intentions. This may offer implications for marketers, they can benefit from considering for whom and how to write marketing context, abstract vs. concrete, in designing transparent marketing communications (Park, 2010).
High-‐level construals Low-‐level construals
Abstract Concrete
Simple Complex
Structured, coherent Unstructured, incoherent
Decontextualized Contextualized
Primary, core Secondary, surface
Superordinate Subordinate
3.3 The role of consumer involvement in explaining consumer
behavior
The level of consumer involvement in explaining consumer behavior is playing an important role; the level of consumer involvement can be explained as the crucial factor influencing buying decisions (Bennet et al. 2005). The most accepted definition of involvement by researchers is that they agree that; the level of involvement is related to the perceived personal relevance of a certain product for the consumer (Homburg and Giering, 2001; Knox et al., 1994). In other words, the level of involvement, high or low, indicates how important a product and the consequences of its purchase are for the individual. Petty and Cacioppo (1981) explore how involvement is a potential moderator in consumer behavior. The results of the study suggested that the content factor of the message is more influential than for example source characteristics in high involvement conditions.
Around a decade ago researchers were exploring the psychology underlying consumer involvement, as companies shifted to viewing customers as co creators of value instead of just recipients (Firat et al., 1995; Holbrook and Hirschman,1982; Prahalad and
Ramaswamy 2000, 2002; Vargo and Lusch 2004). Now companies are actively involving the customers in marketing, testing and design of their products and services (Lengnick-‐ Hall 1996). The results of Norton et al. (2010), demonstrate how involving customers in the creation of Ikea boxes, can change a low involved customer into a high involved customer leading to a higher willingness to pay.
The results of Park (2010) on the moderating role of psychological distance suggest that socially close vs. distant only influences under the condition of thoughtful thinking. Which leads us to the elaboration likelihood model by Petty and Cacioppo (1986), they provide a well-‐documented model to explain this underlying psychological process. There are two distinct routes to attitude change: the central – and the peripheral route. The central route views attitudes change as resulting from a cognitive consideration of information that is core to what people feel. The peripheral route, views attitudes change because the attitude object has been associated with either positive or negative cues or a simple decision rule to evaluate a communication is used, so influence on attitude without issue-‐relevant thought occurring.
By analyzing through the elaboration likelihood model whether the person is motivated and has the ability to think about the communication to which he or she is exposed, one could conclude whether they process the communication centrally or peripherally. According to Trope and Liberman (2011) people who are confronted with low level construals people are more likely to follow the peripheral route to attitude change, by focusing on the present with great detail and think of the advertisement more
concretely. Whereas when people are engaged in high level construals they are more likely to follow the central route to attitude change, by looking at the bigger picture and think of the advertisement more abstractly.
Furthermore, Apsler and Sears (1968) designed a method to manipulate involvement through manipulating the personal relevance. In this experiment the first group of participants were told that a persuasive plan had personal implications for them or people in their community, which can be compared to a low social distance. The second group of participants was told that the persuasive plan had no direct implications to them or people in their community in the near future, referred to a high social distance.
Results show that first group of people were more highly involved as compared to the second group being low involved.
Therefore consumers may become more involved through concrete transparent information communicated with low social distance information compared to as more abstract and high social distant information. By manipulating the personal relevance, a high vs. low social distance, we can measure the increase or decrease in involvement with the product.
Also manipulating the social distance to a low distance with the sympathic agent will lead to a higher involvement and eventually willingness to pay. As the results of Carter and Curry (2010) suggest, the consumer is higher involved with the product when the sympathic agent is disclosed. The respondents preferred a higher allocation to the sympathic agent and were willing to pay a higher price for the product when more money would be allocated to this agent.
H2: The effect of disclosure source (H1) is mediated by consumer involvement, such that the recipient of the information is more (less) involved when information is proactively disclosed by the firm (disclosed by a fellow consumer).
H3: The effect of disclosure source on consumer involvement (H2) is moderated by social distance, such that the recipient of the disclosed information is more (less) involved when social distance between the recipient of the information and the beneficent in the disclosed information is low (high).
4. Research method
4.1 Method
The main objective of this research is to explore the role of social distance under the condition of firms proactively disclosing information in their marketing communications using a deductive approach. By having explored secondary data on the effects of social distance and consumer involvement on consumer behavior, propositions were derived from them.
Accurate secondary data, which was already easily available and therefore cost-‐effective, was to find existing knowledge on the topic before conducting the experiment.
Primary data is gathered through a consumer experiment to test if the effects of transparent marketing on WTP were mediated by consumer involvement and
moderated by social distance. A consumer experiment is one method of assessing the effect of social distance and consumer involvement. Firstly, by having manipulated the social distance (socially close vs. socially distant, the independent variable) one is able to measure the moderating effect on the causal relationship of transparent marketing increasing WTP (the dependent variable) as is shown in figure 1 (Saunders et al., 2008). Secondly, by looking at the effect of transparent marketing on the level of involvement one can test a possible mediating effect in the IV-‐DV relationship as is shown in figure 1. High involvement may have further increased the WTP.
The combination of the transparency advertisement experiment and the 5-‐item scale increased the reliability of findings. To increase construct validity of the findings a pretest was executed on social distance, source disclosure, and positivity of information and clarity of advertisements used in general. The pretest made it possible to make sure that the 5 advertisement conditions used would represent an accurate image to what they were supposed to measure.
4.2 Veylinx
Veylinx is an online bidding platform used to gather data on consumer’s actual
willingness to pay in a convenient way. The participants of the experiment are existing members of Veylinx, the database is build up from people voluntarily subscribing the online bidding platform for several reasons; general interest, willing to help others and winning gifts after joining the online bidding. All existing members, around 3200, were used to randomly select 1000 individuals for the experiment; done by the consumer research company Veylinx. The database yields sufficient variance and therefore a presents a representative sample. Furthermore, by collecting around 950 participants for the experiment the data has a high probability to be quantified and therefore develop more generalizable findings. These Veylinx members were approached by e-‐mail on the basis of simple random sampling within the group members of Veylinx, the response rate was around 95%.
The choice for these respondents is appropriate to the extent that the online bidding platform provides the best opportunity measuring the willingness to pay. Veylinx measures what people do, not what people say, it will reveal what they really want to pay for the product, this is not measuring intentions and opinions it is actual behavior. Veylinx uses Vickrey auction to measure this actual behavior, here bidders submit their bid in euros and the highest bidder pays the second highest bid (Ausubel and Milgrom, 2006). The bidders cannot see the bid of other people. So eventually consumers
participate in the auction by placing one bid in euros, subsequently they answer a few questions about their involvement with the product.
4.3 Stimuli
4.3.1. The Product
The product that was auctioned online at Veylinx was a luxury brand chocolate bar. Since 2005, Tony’s Chocolonely, Dutch chocolate bar company, was the first to introduce a so-‐called ‘slave-‐free chocolate bar’ with a fair-‐trade logo, which they later on changed to ‘the road to 100% slave-‐free chocolate’ due to legal issues. Tony’s Chocolonely buys directly buying from cocoa farmer and they establish a long-‐term relationship with them, besides they source Fair Trade ingredients and organic products as much as possible. The chocolate bar chosen was a large milk chocolate bar because this is the most popular flavor and therefore more recognizable and appealing to a larger group of respondents. According to Beulens et al. (2005), modern consumers demand products that are healthy, safe and consistent high quality, demanding guarantees for food characteristics. Consumers expect transparency and effective response if a problem arises, as a result businesses are forced to comply with the governmental and consumer demands. Because of information exchange throughout the food supply chain the origin and added value of food products can be communicated and, thus, become more
transparent (Beulens et al., 2005). This fair-‐trade Tony’s Chocolonely bar was chosen because it allowed disclosure of information on the fixed percentage that goes to the sympathic agents, who are the producers of the product in this situation the farmers in Africa and the Netherlands. Tony’s Chocolonely’s organic milk is produced by farmers in the Netherlands (West-‐Friesland) and cacao is produced by farmers in West-‐Africa (Ghana, Ivory coast) (Tony’s Chocolonely annual report, 2013). Usually this information is not shared on the packaging of food and beverages likewise with the chocolate bar from Tony’s Chocolonely.
4.3.2. The experiment conditions
The experiment will be performing five different conditions of ads in total, where social distance is manipulated to a high and a low social condition. And brand disclosure is manipulated to a brand disclosure and a Veylinx consumer disclosure condition. The last condition is the non-‐transparent condition, which is the control group. So, in total the ads are separated into the five following conditions, first the brand disclosure with high social distance, secondly brand disclosure with low social distance, thirdly consumer disclosure with high social distance and fourthly consumer disclosure with low social distance towards the respondent and finally the control group.
The first hypothesis, if willingness to pay is higher when a firm discloses information will be measured through a non-‐transparent advertisement condition, which is the control group, comparing to the advertisements with disclosed information. Veylinx is used to measure the differences in willingness to pay between both (non) transparent conditions presented by the brand compared to the consumer to test if transparency by the brand is valued more than when transparency is presented by a customer.
In addition to the advertisements shown on the online bidding platform. Furthermore it is important to measure information transparency with negative information revealed, because disclosing positive information is easy for the company and has a high chance of already being perceived more valuable and liked by the customer as compared to
disclosing something negative. Therefore the information transparency should be perceived negative to be able to measure a strong transparency effect. The Revised Product Involvement Inventory (RPII) is used to measure hypothesis 2, if effect of disclosure source (H1) is mediated by consumer involvement, such that the recipient of the information is more (less) involved when information is proactively disclosed by the
firm (disclosed by a fellow consumer). This 5-‐item scale measure has a limited amount of questions and is derived from the original PII, therefore respondents are less likely to be irritated due to the length of the interview compared to the PII, which consists of 20-‐ items (Zaichkowsky, 1985; McQuarrie and Munson, 1992). The items are scored on 7-‐ point scales on the following constructs:
1. Unimportant – important.
2. Means a lot to me – means nothing to me. 3. Matters to me – does not matter
4. Significant – insignificant
5. Of no concern to me – of concern to me
The 5-‐item scale will appear after the bidding took place to be able to find out the difference between the levels of involvement between all three conditions.
This questionnaire works with a defined schedule of questions, which are tested scientifically, which makes the research more reliable and credible. The defined set of questions from which the interviewer should not deviate, makes it easy to standardize the research method (Saunders et al., 2008).
To be able to measure the third hypothesis, if the effect of disclosure source on
consumer involvement (H2) is moderated by social distance, such that the recipient of the disclosed information is more (less) involved when social distance between the recipient of the information and the beneficent in the disclosed information is low (high), we must first develop an easy and applicable message frame for both high and low social distance.
The transparent advertisement communication will be primarily based upon the
message context as is used in the Nan (2007) study. The first transparent condition ad is socially close presented by the brand with the following text: “5% of the profit goes to the
farmer in West-‐Friesland”. The second transparent condition ad is socially close
presented by the customer: “I love the taste of the chocolate, in the meanwhile 5% of the
profit goes to the farmer in West-‐Friesland”.
The third transparent condition ad is socially distant presented by the brand: “5% of the
profit goes to the farmer in West-‐Africa”.
The fourth transparent condition ad is socially distant presented by a customer: “I love
the taste of the chocolate, in the meanwhile 5% of the profit goes to the farmer in West-‐ Africa”. The advertisements used in the experiment can be found in appendix 1.
5. Results
5.1 Pre-‐test
A pre-‐test was undertaken to find out if the 5 conditions used would represent an accurate image to what they were supposed to measure. The pre-‐test helps to identify problems with the advertisements used that otherwise would have led to biased answers. The survey was conducted through online survey tool Qualtrics.
Thirty-‐four respondents were asked to indicate if the information on the allocation of the percentage to the sympathic agent was too low or too high on a 6-‐point scale. This made it possible to measure if the disclosed information was perceived as something negative or positive. The respondents were also asked to indicate whether the
advertisement message was clear to them on a 5-‐point Likert scale, from totally disagree to totally agree. Furthermore they were asked to answer if the disclosed information was given by the brand or not by the brand. So whether it was brand disclosure or disclosure by a consumer, this determinates the brand disclosure source. Finally the respondents were asked to indicate the social distance, by several scale questions from 1 to 7 (i.e. 1= feels close to me/ 7= feels far from me and I identify myself the most with and the least with scales) throughout the pre-‐test. Respondents could indicate whether the West-‐Friesian Dutch farmer or the West-‐African farmer was more socially close to them.
A one-‐way ANOVA was conducted to determine the significance in outcomes on social distance scales. The findings reveal there was a statistically significant effect of social distance between the respondent and the Dutch farmer and the respondent and the African farmer. People identified themselves significantly more with the Dutch farmer than the African farmer, F(1, 66) = 90,5, p <.05 (table 1). Post hoc comparisons using the Tukey HSD test indicated that the mean score for the low social distance condition (M =
2.38, SD = 1.25) was significantly different than the high social distance condition (M = 5.29, SD = 1.26). Concluding the results showed that the respondents felt a low social distance with the Dutch sympathic agent condition and a high social distance with the African sympathic agent condition.
Table 1. One-‐way ANOVA of relevance means per social distance between identification with two farmers
Sum of Squares df Mean Square F Sig.
Between Groups 144.132 1 144.132 90.521 .000
Within Groups 105.088 66 1.592
Total 249.221 67
Overall the transparent information provided was perceived negative in all transparent information conditions, this was analyzed through frequencies run on answers
categorized in groups of positive and negative answers to the question in table 2 and 3.
Table 2. Frequencies of 5% to African sympathic agent is perceived positive or negative
Frequency Percent Valid Percent Cumulative Percent
Valid Positive 8 23.5 23.5 23.5
Negative 26 76.5 76.5 100.0
Total 34 100.0 100.0
Table 3. Frequencies of 5% to Dutch sympathic agent is perceived positive or negative
Frequency Percent Valid Percent Cumulative Percent
Valid Positive 12 35.3 35.3 35.3
Negative 23 67.7 67.7 100.0
Total 34 100.0 100.0
All advertisement conditions were clear and understood by the respondents as is shown in the descriptive analysis table 4, a mean of above 4 on a Likert-‐scale from 1 (totally disagree) to 5 (totally agree). A one-‐way ANOVA was conducted to determine the
significance in outcomes between the clearness of different advertisement. The findings reveal there was no statistically significant effect between any of the advertisements F(2, 98) = .086, p >.05 (table 5). This means they agree with the statements that all of the different conditions of advertisements shown are clear to them.
Table 4. Descriptives of comprehensibility of advertisement
N Minimum Maximum Mean Std. Deviation
Clear non transparent 34 1 5 4.09 .866 Clear consumer disclosure 34 1 5 4.12 .913 Clear brand disclosure 34 1 5 4.15 .821 Valid N (listwise) 34
Furthermore respondents were asked to look if the advertisement was communicated by the brand or the consumer. Disclosure by the brand was much more clear to the respondent, with percentage values of 88.2 and 97.1, as compared when it was
communicated by the consumer in table 6, still 64.7% understood that the information was given by the consumer instead of the brand itself. The data was analyzed using chi-‐ square goodness of fit test, the difference in these proportions between disclosure by brand as compared to disclosure by customer is significant X² (1, N=101) = 13.35 P<.05. Overall the pre-‐test led to the results that the advertisements proposed where valid and therefore measures what needed to be measured.
Table 6. Descriptives of source disclosure (consumer)
The information is given by Tony's Chocolonely? (No)
Frequency Percent Valid Percent Cumulative
Percent Valid Yes 12 35.3 35.3 35.3 No 22 64.7 64.7 100.0 Total 34 100.0 100.0
Table 5. One-‐way ANOVA of relevance of means between comprehensibility of conditions/ads
Sum of
Squares
df Mean Square F Sig.
Between Groups
.129 2 .065 .086 .918
Within Groups 73.673 98 .752
5.2 The experiment
The actual experiment was conducted with Veylinx on Friday the 14th of November
2014. Around a 1000 voluntary subscribers received e-‐mail to join the online bidding for the Tony’s Chocolonely bar and during that day a total of 950 respondents made a bid and answered the consumer involvement questions after the bidding. This includes the 192 respondents who bid zero eurocents for the product. To following headings present the results obtained from the experiment.
5.3 Demographics
The experiment consisted of five conditions; each condition was presented to around 190 respondents, which makes a total of 950 respondents. From the total of 950 respondents 462 were female and 488 were male respondents. Of which the age differed between 114 years old (this may have been a typo by a respondent) and 16 years old, with an average age of 41 years old. Additionally a total of 154 of the
respondents indicated to be a full-‐time student at that moment in time. Moreover 483 respondents were higher educated (HBO and WO degree according to the Dutch education system). Overall the average bids for one chocolate bar measured in SPSS were 143,50 eurocents (table 7a, 7b). The highest bid was 153.42 eurocents for the transparent condition with low social distance.
Table 7a. Average bid amount per treatment in SPSS
Bid amount
Condition Mean N Std. Deviation
Control 134.30 187 112.398 BrandHighS 142.87 195 121.928 BrandLowS 153.42 180 113.379 ConsLowS 136.22 198 113.957 ConsHighS 151.38 190 107.172 Total 143.50 950 113.939
