The effect of firm size on perceived product healthiness

The health food industry is comprised of firms of varying sizes. Does firm size influence consumers’ perceptions of how healthy its offerings are? This research proposes that products from smaller firms are perceived to be healthier. This is because smaller firms are perceived to be more moral, and these moral perceptions, in turn, influence health perceptions. Study 1 shows that products from a smaller firm are perceived to be healthier than products from a larger firm. Study 2 demonstrates mediation via moral perceptions. Study 3 shows that the health bias toward smaller firms diminishes when larger firms emphasize their Corporate Social Responsibility (CSR). Next, study 4, through an analysis of Yelp reviews, shows how firm size can influence word-of-mouth. Finally, study 5, via a Facebook experiment, shows that health-conscious consumers are more receptive to advertisements from smaller firms. Hence, these findings present implications for managers seeking to promote health-focused products.