When a brand adds an ecolabel - is it worth it? “What effect does issuing a brand-made carbon-footprint label have on the perceived product quality, brand attitude and purchase intention of the consumer?”

Abstract

This thesis examines the effect of a brand-issued carbon label on brand attitude, purchase intention and perceived product quality on the consumer. These effects are hypothesized to be moderated by the perceived fit between the eco-labeled pre-packaged meals and the product category (vice or virtue). Based on the literature, we argue that virtue foods have a better fit with eco-labeled foods, and therefore the ecolabel would have a significant positive effect on brand attitude and perceived product quality. Due to the low fit between the vice product category and eco-labeled food, we hypothesize a negative effect on brand attitude and perceived product quality. Further, we hypothesize that brand attitude and perceived product quality both significantly affect purchase intention. The thesis provides insight to the changes in consumer responses, and contrary to our hypotheses, finds that even though brand attitude and perceived quality both are positive and significant, the consumers do not reward the company with significantly higher purchase intentions. The hypotheses about fit are also disregarded, as both vice and virtue foods gained positive and significant effects on brand attitude and perceived product quality when the label was included. For marketing managers, and other strategic decision-makers in a company, our findings indicate that investing in an ecolabel does not immediately contribute to higher sales. However, there might be other benefits that surpass the quick reward of purchase intention the moment the ecolabel is introduced. As perceived product quality increases when the ecolabel is placed on the product, the brand status might be elevated in the mind of the consumer, and the ecolabels’ positive effect on brand attitude could be an asset for the brand. Depending on the managers’ strategic goals, an ecolabel may or may not be a good investment for the brand, as the return on investment cannot be found in the immediate purchase intention, but rather in a general heightened appraisal of the brand and the perceived product quality. However, as is so often the case with marketing efforts, branding is a long game, and it is often hard to instantly quantify the results and return on investment.