Should Csr Be Used as a Marketing Tool by Producers in the Cosmetics Industry?

Topics: Corporate social responsibility, Social responsibility, Brand Pages: 10 (3361 words) Published: April 30, 2013
Should CSR be used as a Marketing Tool by Producers in the Cosmetics Industry?

The purpose of this paper is to prove that CSR can be used as a positive approach in the area of marketing and promotion, particularly in the cosmetic industry. The paper substantiates this hypothesis by drawing on theory from scholarly articles and literature and analysing data from annual reports. A portion of the research is dedicated to the Body Shop, based on analysis of their annual reports, as well as the reaction of different stakeholder groups based on several literatures. The paper finds that there are positives and negatives in using CSR and promoting it using marketing depending on the consumers’ perceptions. It also finds that there exists an information asymmetry between producers and consumers in terms of CSR for their products. The paper supports previous ideas that CSR is useful in benefitting the company brand and value and that it can also be used to influence a consumer’s purchase decision of the cosmetics.

In conceptual theory, CSR is how a company incorporates “social, environmental and economic issues into their values and business operations in a transparent and accountable manner” (FAITC, 2012). In simple terms, CSR is the actions that a company undertakes or doesn’t undertake during their business functions to benefit society and their stakeholders. There are many arguments for and against CSR and also differing views on whether it actually “pays” to undertake CSR. Friedman (1970) essentially argues that the only social responsibility that a business should undertake is to increase profits for the benefit of its shareholders and that CSR should be left to governing authorities that know best which social responsibilities to act upon. In contrast, Mintzberg (1983) argues that CSR is indeed important for corporations to undertake with benefits including but not limited to; can serve as to enlighten self-interest, there are economic benefits to investing in CSR and finally, it can be used to ‘prevent regulation’ in that if it seems the business community is not seen to be acting to the detriment of the surrounding communities, there will be no need for regulation to be put in place. The economic benefits of CSR continue to be very difficult to measure. There are those that contend that CSR can indeed provide economic benefits, but there are also those that argue that CSR presents no such benefits. Vogel (2005) is one detractor of the view that CSR provides any form of profitable incentive for business, though, he puts forward the case that “CSR also does not make firms less profitable”, subsequently stating that there is indeed a case for CSR to be enacted upon by businesses, though due to the lack of economic benefits, CSR is not important enough to become a priority for all firms. Conversely, Orliztky et al. (2003) argues that according to the reputation of a business (particularly if the business has been endorsed by federal agencies), CSR can is, in fact, positively correlated to corporate financial performance, meaning that across studies, it has been found that businesses which have undertaken CSR have in fact reaped economic benefits. This paper presents the view that CSR is in fact beneficial for a cosmetic business, in particular The Body Shop, which uses CSR as a marketing tool, in that value is created via economic benefits to the company and also a customer preference towards the brand is also influenced. METHODOLOGY

This paper explores The Body Shop to form the basis of the research of a cosmetic company using CSR as a marketing tool to create value for the company and its stakeholders. Annual reports and scholarly articles gathered from online databases have been employed to construct a coherent study of the utilisation of CSR as a point of difference in the marketing efforts of cosmetic companies and in particular, The Body Shop. Using The Body Shop as the point of...

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