The Impact of CSR on Brand Loyalty
INTRODUCTIONTHE RELATIONSHIP BETWEEN
CORPORATE SOCIAL RESPONSIBILITY & BRAND LOYALTY
Dependant Variable – Brand Loyalty
Independent variable - CSR
DEFINITIONSCSR –
stakeholder theory views CSR more generally as firms having responsibilities towards society. They are about individuals or groups that may be directly or indirectly affected by their activity
DIMENTIONS OF CSR
Corporate Social Responsibility
Economic responsibility
Legal responsibility
Ethical responsibility
Philanthropic responsibility
Economic responsibility –
is one of the dimensions identified. All other business responsibilities are predicated upon the economic responsibility of the firm, because without it the others become moot considerations.” do what is required by global capitalism”
Legal responsibility-
legal responsibility holds that companies “do what is required by global stakeholders”
Ethical responsibility-
•“do what is expected by global stakeholders” by Carroll 1998
•1 .acts responsibly, 2. honors human rights, 3. competes fairly with its competitors, 4. treats employees fairly, 5.honest and upfront about telling the truth by David et al ., 2005 .
Philanthropic responsibility-•“do what is desired by global stakeholders by Carroll (1998)].
•Philanthropy involves firms making a contribution of money or kind to a worthy cause without an expectation of tied benefit with the cause because they wish to be a good citizen by Shaw and Post, 1993; Collins, 1994
•The biased behavioral response expressed over time by some decision- making unit with respect to one or more alternative brands out of a set of brands and is a function of psychological processes. by Jacoby
•Consumer attitudes on a brand preference from previous use and shopping experience of a product. by Deighton, Henderson & Neslin.
•According to Aaker brand loyalty is a measure of the relationship that a customer has to a brand.
•Consumers satisfy their past experience in use of the same brand and incur repurchase behavior. By Aasael
Brand Loyalty
Brand Loyalty
Attitudinal loyalty
Behavioral loyalty
DIMENTIONS OF BRAND LOYALTY
Attitudinal loyalty-
•Loyalty attitude means psychological commitment to a brand.
•Attitudes consist of cognitive, affective and co-native which has been used for classifying the dimensions of brand loyalty
Behavioral loyalty
•behavioral loyalty represents repurchase behavior
Development of a conceptual framework for the relationship
between Corporate Social Responsibility and Brand Loyalty
BRAND LOYALTY
Attitudinal loyalty
Behavioral loyalty
H1
H2
H3
H4
Economic responsibility
Legal responsibility
Ethical responsibility
Philanthropic responsibility
CSR
Proponent Year Relationship
1 Polonsky & Jevons 2006 CSR- Competitive Advantage
2 Moir,Idowu & Towier 2001- 2004
CSR benefit – Customer loyalty
3 Siegel & Vitaliano 2007 CSR- Establish/Sustain Brand Loyalty
4 Lichtenstein et al 2004 CSR – Direct/indirecct relationship to loyalty
5 Friench study- cited in Cailleba
2009 Fairtrade produts – Concern for enviroment
6 Bronn & Vrioni 2001 CSR- Marketing Communitation
7 Bhattacharya & Sen 2004,2001,2008
Positive CSR belifes – Longterm Brand Loyalty
Proponent Year Relationship
1 Sen & Bhattacharya 2001 CSR – Company Evaluation
2 Marin et at 2009 CSR – Company Evaluation
3 Bablak-Curras- Perez et al 2010-2009
Brand awarenes & Brand Image
4 Polonsk y & Speed- Beckey – oslen & Hill-Lachowet et at
200120062002
CSR initiatives –Purchase intention
5
Operationalization of Corporate Social Responsibility and Brand
Loyalty concepts
Economic responsibility
Earnings Per Share (EPS)
Profitability
Rank obtained in the operating industry
Indicators of Corporate Social Responsibility
Legal responsibility
No: of times taxes been paid on time
No: of times fined or cases filed
No: of products or services meeting the minimal legal requirements
Ethical responsibility
No: of environmental friendly products/services
No: of ethical activities/programs
Frequency of servicing and adjusting to environmental friendly production processes
Philanthropic responsibility
No: of CRM activities
Value of sponsorships given per year as a percentage
No: of times managers and employees participated in voluntary and charitable activities
Funds allocated for charitable activities
No: of hours/days spent for charitable causes
Attitudinal loyaltyNo: of customers in a sample preferring a
specific brand
No: of customers considering the brand as a fan/friend
No: of likes for the brand advertised on social media web pages
Indicators of Brand Loyalty
Behavioral loyalty
No: of repeat purchases
Repeat purchase rate
No: of years a particular brand is purchased
No: of brands of a particular product/service purchased
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