It's the smallness that counts: Consumer preferences for small versus large companies' products

Abstract

Abstract Previous research has repeatedly suggested that small (vs. large) companies have a higher appeal to consumers, yet the underlying mechanisms explaining why such an effect occurs remain understudied. Through four experiments, we show that company size cues affect consumer preferences; products originating from small companies are perceived to be healthier than those from large companies, with a downstream positive effect on willingness to buy. Specifically, small (vs. large) company size cues increase the perception of product safety, in turn increasing the perception of product healthiness. This effect is more pronounced for individuals who are more sensitive to safety signals, scoring high on sensitivity to pathogen disgust. Our findings provide managerially relevant insights and show that additional safety‐related signals have the potential to counteract this seemingly inherent disadvantage for large companies.