Consumer Perception of Brand Purpose and the Effect on Brand Success

While many brands claim a “purpose beyond profit”, it remains unclear which brands consumers perceive to be purpose-driven. We are developing instruments to measure purpose perceptions and investigating whether purpose-based brand strategies can be beneficial to third parties and business at the same time.

When the clothing manufacturer Patagonia launched its “Don’t Buy This Jacket” campaign 10 years ago, the reactions of many marketing experts oscillated between outrage and suspicion. But when Nike openly supported the “Black Lives Matter” movement in 2020, public opinion not only embraced the company’s clear stance on the issue but many even seemed to expect influential brands to help solving critical social and environmental challenges. These are two examples of a "purpose beyond profit", where a company does not (only) exist to benefit owners and customers but (also) third parties who are not directly involved in their transactions.

Facing a multitude of global challenges, the public has grown weary of all too blunt shareholder-value sermons. It seems that the almost ancient “greed is good” mantra has finally faded away. The ground has apparently been cleared for new leaders who claim to do business to make the world a better place rather than for the sake of profit.

But is the commitment to do good necessarily in conflict with doing well financially? It may be that spending profits for a good cause instead of only rewarding shareholders is not a zero-sum game and purpose-driven brand strategies may actually be good for business.

To provide an answer to this question, we must first know which brands are purpose-driven to compare their performance with brands that are not. More specifically, we will go beyond corporate communication and directly assess stakeholders’ perceptions of brand purpose because they are the gateway to market decisions. Using state-of-the-art psychometric methods, we will estimate both explicit and implicit perceptions of brand purpose across a broad range of brands and test whether brands that are perceived as more purpose-driven outperform those with more traditional strategies.

• More and more brands proclaim a "purpose beyond profit", which commits them to make a difference

• We develop sound psychometric instruments to estimate consumers’ perception of brand purpose

• We test whether purpose-driven brand strategies are good for business