The purpose of this paper is to investigate the relationship of the consumer perceptions about the branding of organizations that invest in social responsibility and the consumer behaviour regarding loyalty and willingness in paying a premium price. Reviewing the literature about Corporate Social Responsibility (CSR), Corporate Social Performance and Corporate Financial Performance, some questions arise: do consumers understand the efforts made by businesses regarding their social and ethical campaigns? And if so, are consumers willing to pay a higher price for the products and services resulting from these social and ethical campaigns? Are consumers loyal to these businesses? In order to analyse the links between CSR and consumer behaviour, the authors use a structural equations model and a Focus Group. The “Nespresso” Case is analysed and included in the survey questions, since it is a very well known brand amongst Portuguese consumers. The main conclusions of the paper are that although some of the indicators do not present excellent results, the hypotheses tested, in the structural equation model, were verified. As such, we can conclude that social responsibility policies are important in building a strong brand image and in turn lead to consumer loyalty and consequent availability to pay a higher price for the products or services provided. Within the focus group some interesting findings arise regarding the links between CSR, brand image, loyalty and willingness in paying a premium price. There are indicators that although, CSR is considered important for building loyalty, the links regarding the willingness in paying a premium price are thin. Another finding is that communication policies don’t address the consumer concerns regarding CSR.
Keywords:Corporate Social Responsibility, Brand Image, Brand Loyalty, Premium Price
For some decades now research on the role and responsibilities of business in society has been searching for the business case for corporate social responsibility (CSR). The proliferation of studies on the relationship between corporate social performance and economic bottom line is the result of different shifts in the academic debate. On the one side, in terms of the level of analysis, research has gradually moved from a focus on the macro-social effects of CSR to organizational-level analysis of CSR effects on firm behaviour and performance. On the other, in terms of theoretical orientation, researchers have moved from explicitly normative and ethics-oriented studies to implicitly normative and performance-oriented analysis. (Castaldo et al, 2009) Looking backward at the empirical research undertaken in the last few years, the business case for social responsibility and the related link between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP) remain the most controversial areas in the business-in-society field (Barnett, 2007). Though different in their approaches to CSP definition and measurement, existing studies tend to share an often unstated assumption: the stronger the firm’s involvement in CSR programs and activities, the higher the economic and financial value firms will be able to obtain. However, a substantial inconsistency in the results obtained emerges, in terms of both existence and direction of the correlation between the constructs (Margolis & Walsh, 2003; Orlitzky et al, 2003; Salzmann, Ionescu-Somers, & Steger, 2005).
Brand Image, Brand Loyalty and Premium Price
Businesses use the brand to create and communicate their identity and building their image in the consumers’ perspective. The brand image of a successful brand is a valuable business asset because consumers identify more easily, products and services through the respective brands, than otherwise. Another important aspect of branding is that, they provide the basis to positioning...