Brand Ethicality and Premium Pricing

Despite substantial growth in ethical markets with consumers expressing willingness to pay premiums for ethical product, the cognitive and emotional pathways through which ethical positioning translates into premium payment behavior remain insufficiently understood. This research addresses this theoretical gap by integrating the Stereotype Content Model with ethical branding theory to examine how brand ethicality influences willingness to pay premium through brand stereotypes and emotional responses. Drawing from a survey of 287 consumers, this study employs PLS-SEM to test a sequential mediation model examining the relationships among brand ethicality, brand stereotypes (warmth and competence), emotional responses (admiration, contempt, pity, and envy), and willingness to pay premium. The findings reveal that brand ethicality significantly enhances both warmth and competence perceptions, which subsequently generate distinct emotional responses following established stereotype-emotion patterns. The results demonstrate a fundamental distinction between univalent and ambivalent emotional responses in driving premium payment behavior. Theoretically, the research contributes to the Stereotype Content Model literature by demonstrating its applicability to ethical brand contexts and revealing the differential effects of emotional complexity on consumer behavior. Practically, the results provide clear guidance for ethical brand positioning to translate ethical positioning into sustainable competitive advantage through premium pricing.