Social Exchange Theory

The Social Exchange Theory uses a cost versus benefit analysis to predict behavior based on rewards and costs of the decision. People will factor in the consequences of their behavior before acting in order to keep costs low and rewards high. If a decision has an option with low costs and high benefits, the person will choose that action. Product (RED) has created products that give the consumer high levels of both tangible and intangible benefits with a low monetary cost.

Product (RED) uses their logo on a variety of products that are available for purchase. Some examples from the extensive list of (RED) products available include:

• iPod
• Dell Computers
• American Express Credit Cards
• Gap T-Shirts
• Starbucks Gift Cards

A full list of products available can be found here

When a person owns and displays their (RED) merchandise, it shows their knowledge and concern for the cause, as well as a sense of globalism. The consumer also gets the direct and simple benefit of obtaining a new physical product.

In addition to the obvious tangible rewards, owning and displaying (RED) merchandise provides intangible rewards such as:

• Social recognition
• A sense of belonging to a larger cause
• A general good feeling because the consumer is helping the organization
  

These (RED) products are well known and highly recognizable so most people can identify the cause, which adds to these intangible benefits.


Written by Amy SantaMaria