Does Customer Perceived Ethicality Infleunce Brand Equity? Investing the Role of Word-of-Mouth

Giuseppe Ceraolo & Edoardo Sossai

Student thesis: Master thesis


During the past years, increasing relevance of ethical branding stressed the importance for companies to have an ethical image. Accordingly, an increasing flow of literature aimed at the intersection of the field of corporate brand management and business ethics, both in product and service sectors. In the context of the coffee industry, corporate brands faced an ethical crisis in the past which also nowadays posits challenges in relation to customer perceptions of ethicality. Accordingly, the present thesis aims at investigating the effects of customer perceived ethicality in the context of the coffee brands. Specifically, it encompasses the study of CPE in relation to word-of-mouth and brand equity. Based on a sequential mixed method involving a questionnaire and 10 (semi-structured) interviews, this study develops through an initial hypothesis testing phase, and a subsequent exploration of relationship investigated. The research sample is constituted by 74 questionnaire respondents, and 10 interviewees. Mediation tests posited the initial conditions where WOM was found mediator of the relationship among CPE and customer perceived quality, as well as customer loyalty. No mediation effect was found in regard to brand personality dimensions. Building interview guide on these results, interview analysis revealed that brand trust might have a role in determining the influence of CPE on WOM. Moreover, integrating results it is shown that WOM is related to brand equity, and particular sources of WOM (family) are more effective than others. Ultimately, a general difference is pointed among positive and negative brand CPE, and positive and negative WOM, since the two dimensions shown different relative weight in results. This highlights the challenge faced by companies in strategically managing the ethical brand and its communication, with the risks and benefits involved by behaving accordingly to consumer trust.

EducationsMSc in Brand and Communications Management, (Graduate Programme) Final Thesis
Publication date2018
Number of pages169
SupervisorsStefan Markovic