How psychological contracts motivate employer-brand patronage
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How psychological contracts motivate employer-brand patronage Yoshiko DeMotta 1
& Sankar
Sen 2
# Springer Science+Business Media New York 2017
Abstract Research on employees’ purchase of their employer’s product is scarce. In this paper, we investigate how psychological contracts will impact employees’ purchase motivations of their employer brand. Two studies examining real and imagined purchase behaviors show that employees with relational type of psychological contracts are more likely to purchase their employer brand than are employees with transactional type of psychological contracts. This is because the former type of psychological contracts will encourage both intrinsic and extrinsic motives to support the employer brand. Keywords Employee purchase behavior . Psychological contract . Motivation . Social influence . Internal marketing The extent to which employees voluntarily consume the products they make or sell is a reflection of both product attractiveness and employee engagement. While employees’ consumption of their employer’s brand (i.e., employer-brand patronage) can be seen as a strong endorsement, their patronage of competitor brands can send a hazardous signal and hurt the company’s reputation. Employees’ word-of-mouth about their employer’s brands can influence broader customer segments, possibly even more so than public relations or advertising (Fradin 2013). At the same time, employees can be important customers for a brand, generating significant revenues with minimal marketing costs (Fram and McCarthy 2003). Of course, there are practical reasons why employees
* Yoshiko DeMotta [email protected]
1
Silberman College of Business, Fairleigh Dickinson University, 285 Madison Avenue, Madison, NJ 07940, USA
2
Baruch College, City University of New York, One Bernard Baruch Way, B12-240, New York, NY 10010, USA
Mark Lett
might not purchase their employer’s product. For instance, employees may not be able to afford their employer’s products (e.g., luxury car, yacht) or the products may be irrelevant to employees’ life stages (e.g., baby food, textbooks) or their psychographics (e.g., extreme sports equipment, musical instrument). However, people do not always choose their employer’s brand even in relevant, affordable categories. Surveys (Fram and McCarthy 2003, 2004) reveal that while 44% of employees at consumer goods companies claim to always purchase their employer’s products, many (48%) purchase them only occasionally, or never (8%). What motivates employees to purchase their employer’s product in such contexts? Insight into this question, while both conceptually and practically important, remains scant (cf. Lusch et al. 1996). Prior research has located employer-brand patronage in employee socialization, defined as the extent to which an employee identifies with, has positive images of, and is a good representative of his employer (Lusch et al. 1996). More broadly, the motivation to consume an employer brand can be characterized as either intrinsic (i.e., an internal desire to perform a
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