The Effect of Brand Loyalty on Consumers’ Willingness to Pay for Price Increases: A Comparison Between Hedonic and Utilitarian Products

This study examines how brand loyalty influences consumers’ willingness to pay (WTP) for a product after a price increase and whether this relationship differs between hedonic and utilitarian products. In addition, perceived price fairness and price sensitivity are considered as moderating factors to better understand under which conditions loyal consumers are more or less willing to accept higher prices. The research is based on a quantitative 2 × 2 between-subjects experimental design in which brand loyalty and product type were manipulated. Consumers’ willingness to pay in response to a 20% price increase served as the dependent variable, and the data were analysed using partial least squares structural equation modelling (PLS-SEM). The results show that brand loyalty has a positive effect on willingness to pay, indicating that loyal consumers are generally more willing to accept higher prices. This effect, however, is not equally strong across product categories and appears to be more pronounced for hedonic products than for utilitarian products. Furthermore, perceived price fairness strengthens the positive relationship between brand loyalty and WTP, while price sensitivity weakens it. These findings suggest that consumer reactions to price increases depend not only on loyalty itself, but also on how fair the price change is perceived and how sensitive consumers are to price differences. Overall, the study contributes to the literature by combining brand loyalty, product type, and consumer-related moderators in the context of willingness to pay. It also offers practical implications for firms seeking to implement price increases without losing loyal customers.