The immediate effect of corporate social responsibility on consumer-based brand equity
| Pages | 864-879 |
| Published date | 18 November 2019 |
| Date | 18 November 2019 |
| DOI | https://doi.org/10.1108/JPBM-09-2018-2016 |
| Author | Fernanda Muniz,Francisco Guzmán,Audhesh K. Paswan,Heather J. Crawford |
| Subject Matter | Marketing |
The immediate effect of corporate social
responsibility on consumer-based brand equity
Fernanda Muniz, Francisco Guzmán and Audhesh K. Paswan
Department of Marketing, Logistics and Operations Management, College of Business, University of North Texas, Denton, Texas
Heather J. Crawford
School of Marketing, University of New South Wales, Sydney, Australia
Abstract
Purpose –In response to consumer and society demands for firms to be socially responsible, brands have been taking a strate gic approach to
corporate social responsibility (CSR) by integrating socially responsible activities into their brands’core value propositions to strengthen brand
equity. Thus, from a brand building perspective, this paper aims to investigate the immediate effect that brand CSR communi cations have on the
change in brand awareness, perceived quality and loyalty, to provide a deeper understanding of how each dimension affects the overall change in
brand equity.
Design/methodology/approach –With evidence from an experiment conducted in three different countries (Australia, United States and Spain),
based on an actual brand CSR program, this paper explores the different immediate effects of change in brand awareness, perceived brand
quality and brand loyalty, after the exposure to a CSR message, on the overall immediate change in value that consumers give to a brand.
Furthermore, it examines the role of brand-cause fitandtheinfluence that differences in cultural, economic and political environments have on
this effect.
Findings –The change in brand loyalty due to CSR communication is the key dimension driving the immediate positive change in overall brand
equity. In addition, change in brand awareness has an inverted U-shape relationship with change in overall brand equity, whereas the change in
perceived brand quality does not have an influence. Finally, the results indicate that this immediate effect holds regardless of the level of brand-
cause fit, but is greater in countries where firms are expected to participate and CSR reporting is not mand atory, making such practices be seen as
voluntary.
Practical implications –The findings of this study offer research implications for academics, and practical considerations for brand
managers, interested in how to rapidly generate changes in consumer perception by leveraging CSR activities for brand building in global
settings. Specifically, it indicates that when the aim is to quickly build brand equity, the goal of communicating CSR activities must be to
increase the level of attachment that consumers have to the brand since loyalty is the main driver of the immediate change in overall brand
equity.
Originality/value –Although many scholars have demonstrated the impact of CSR on various consumer behavior outcomes (e.g., brand attitude,
purchase intention, loyalty), from a brand build perspective the implications of the immediate effect of a brand communication of CSR practices on
consumer-based brand equity remain less clear. This study addresses this gap to gain a deeper understanding of how to rapidly generate changes in
consumer perception to build strong brands while leveraging CSR practices.
Keywords Culture, CSR, Global branding, Corporate social responsibility, Brand equity, Consumer Brand equity, Brand-cause fit
Paper type Research paper
Introduction
The growing emphasis on the importance of socially
responsible behavior to the advancement of society as a whole
has led brands to experience an increase in stakeholders
demanding an active participation in corporate social
responsibility (CSR) practices (Thorne et al., 2017). As a
result, brands have been taking a strategic approachto CSR by
integrating socially responsible activities into the brand’s core
value proposition to drivebrand equity and build strong brands
(Guzmán and Becker-Olsen,2010). Naidoo and Abratt (2018)
even go to the extent of proposing that a brand with social
intentions may develop social brand equity distinct from its
commercial brand equity. Since the power of a brand lies in
what the customers have learned, felt, seen and heard about it
(Keller, 1993), brands are increasingly communicating their
social initiatives to consumers. For instance, the beer brand
Stella Artois launched a commercial during the 2017 Super
Bowl to inform consumers about its partnership with Water.
org, an organization whose goal is to bring clean water to
millions of people in need around the world (Kline, 2018).
Ultimately, the announcement of a brand CSR program is
important to reach desirable outcomes, as past research has
The current issue and full text archive of this journal is available on
Emerald Insight at: www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
28/7 (2019) 864–879
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-09-2018-2016]
Received 18 September 2018
Revised 25 January 2019
22 March 2019
Accepted 1 April 2019
864
shown that CSR signals positively affect brand performance
(Cowan and Guzmán, 2018;Lai et al.,2010;Price and Sun,
2017). This study thus examines the immediate effect that a
CSR communication has on the dimensions of brand equity(i.
e. awareness, perceived quality and loyalty) to provide a deep
understandingof what drives overall brand equity.
Extant research on CSR has investigated the effect of CSR
on various consumer behavior outcomes. Studies have
demonstrated that consumers, in general, have favorable
attitudes toward companies and brands that engage in CSR
activities (Bae and Cameron, 2006), and are more likely to
purchase products from these companies (Perera and
Chaminda, 2013;Sen and Bhattacharya, 2001). Moreover,
studies have demonstrated the positiveeffect of CSR on brand
awareness (Du et al.,2007), perceived brand quality (Brenes
et al., 2014;Swaen and Chumpitaz, 2008;Brown and Dacin,
1997) and brand loyalty (Pratihari and Uzma,2018;Salmones
et al.,2005;Van den Brink et al., 2006;Marin et al.,2009). All
of these studies examine the long term effect of CSR.Yet from
a brand-building perspective,the implications of the immediate
change in awareness, perceived quality and loyalty due to a
brand communication of CSR activities remain less clear,
especially regarding thedifferent effect that each one causes on
brand equity.
The first objective of this study is to answer Beckmann’s
(2007) call for researchthat investigates consumer responses to
CSR communications by exploring the immediate effect of
CSR on the change in brand awareness, perceived quality and
loyalty to better understand how each dimension affects the
overall change in brand equity. Giventhat the perceivedlevel of
fit between the brand and the CSR activity has been shown to
be critical to yield positive consumer response (Nan and Heo,
2007;Guzmán and Davis, 2017), the second objective of this
study is to investigate the role of brand-cause fit in the
immediate overall change in brand equity. Finally, since the
trend for brands to be more social responsible is global, many
firms emphasize building strong global brands rather than
building multiple (strong) local brands (Kumar, 2005;Torres
et al., 2012). Thus, the third objective of this study is to
investigate the immediate effect of CSR on the change in
overall brand equity across countries to explore the
implications of differences in political, economic and cultural
environments. To accomplish these objectives, we conducted
an experiment in three differentcountries –Australia, USA and
Spain –groundedon an actual brand CSR program.
Background
Strategic approach to corporate social responsibility
CSR has been broadly defined as a firm’s participation and
investment of its resources for the advancement of society as a
whole (Frederick, 1994). Hence, CSR refers to the social,
environmental, ethical and philanthropic obligations of firms
toward their stakeholders. In the last 30 years, the market has
experienced an increase in stakeholder’s demand for
corporationsand brands to participate actively in CSR activities
(Thorne et al.,2017). As a result, brands have been taking a
strategic approach to CSR to create a win-win-winsituation for
society, businesses and customers (Gupta and Pirsch, 2006;
Laughlin and Ahsan, 1994). The strategic approach to CSR
involves the integration of social responsibilityinto the brand’s
core value proposition (Beckmann,2007;Guzmán et al., 2008;
Guzmán and Becker-Olsen, 2010;Porter and Kramer, 2006).
Therefore, the goal of strategicCSR is to identify ways in which
companies can align their business purpose with consumer
expectations and increase brand equity while simultaneously
meeting social demands (Guzmán and Becker-Olsen, 2010;
Guzmán and Davis,2017).
Brand equity
According to Aaker (1991), brand equity is “a set of brand
assets and liabilities linked to a brand, its name, and symbol,
that add to or subtract from the value provided by a product or
service to a firm and/or to that firm's customers”(p.15). Brand
equity creates value for both the firm and the customer (Aaker,
1991), and it has been viewed from a variety of perspectives: a
(1) customer-based, (2) company-based and (3) financially-
based perspective (Keller and Lehmann, 2006). In this study,
we focus on the value of a brand from the consumer
perspective. According to Keller (1993), the power of a brand
lies on what the customers have learned, felt, seen and heard
about it through time, in other words, it lies on customers’
minds. Brand equity is a multidimensional concept (Aaker,
1991, 1996) and following Yoo et al. (2000) we recognize
brand awareness, perceived quality and brand loyalty, as
standard dimensionsof brand equity.
Brand awareness refers to the presence that a brand has in
consumers’minds (Foroudi et al., 2018). According to Keller
(1993), brand awareness encompasses two main components:
recall and recognition. Brand recallrefers to consumers’ability
to retrieve the brand when given the product category, whereas
brand recognition involves consumers’ability to confirm prior
exposure to the brand when given the brand as a cue. Brand
awareness contributes to the creation and reinforcement of
brand associations in consumers’minds (Aaker, 1991). The
associations are stronger when they are based on many
experiences or exposures to communications,rather than a few
(Yoo et al.,2000). The level of awareness is a fundamental
element while evaluating a brand since consumers are more
likely to choose a brand that they are more aware than less
aware of (Foroudi et al.,2018;Yasinet al.,2007).
Perceived quality refers to intangible perceptions,
judgments, thoughts, and beliefs about a product’s overall
excellence or superiority (Foroudi et al., 2018;Ramaseshan
and Tsao, 2007;Zeithaml, 1988). The impressions about
brand quality are then formed from consumers’personal
product experience, unique needs and consumption situations
(Yoo et al.,2000). Furthermore, warranties, prices and brand
information may be used as tools to attribute quality to the
brand (Foroudi et al., 2018). The higher the perceivedquality,
the greater the possibilities for positive associations the brand
has since perceived quality leads to a positive attitude towards
the brand (Fatima et al.,2013;Foroudi et al., 2018).
Brand loyalty can be definedas:
A deeply held commitment to rebuy or repatronize a preferred product or
service consistently in the future, despite situational influences and
marketing efforts having the potential to cause switching behavior (Oliver,
1997, p. 392).
Therefore, loyalty refers to the level of attachment to a brand
experienced by consumers. According to Shang et al. (2006),
Corporate social responsibility
Fernanda Muniz et al.
Journal of Product & Brand Management
Volume 28 · Number 7 · 2019 · 864–879
865
To continue reading
Request your trial