IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND IMAGE

CHAPTER# 3: LITRETURE REVIEW:

RELATED LITRETURE:
Literature and assistance for this study has been explored and extracted from internet, related books of brand management as well as corporate social responsibility. For the purpose of revealing a clearer image of the study, discussion and interviews are conducted with some professional brand managers as well as general public to understand the perception they had in mind about Corporate Social Responsibility (CSR) which would be given in the chapter of finding and analysis. The study is not conducted on any specific company and the reason for this is to understand the impact of Corporate Social Responsibility (CSR) on brand image. Therefore the research conducted some comparison of some brands i.e. brand of a company engaged in Corporate Social Responsibility (CSR) activity v/s brand of a company having no Corporate Social Responsibility (CSR) activity. And the comparison is done by the in-depth analysis of the companys annual reports and by studying the brands market share carefully.

CORPORATE SOCIAL RESPONSIBILITY:

As the definition of Corporate Social Responsibility (CSR) has been stated in chapter # 1, therefore in this context I would like to discuss how Corporate Social Responsibility (CSR) activity is been taken by critics. There are many arguments against Corporate Social Responsibility (CSR). According to the critics Corporate Social Responsibility (CSR) activity is mostly an active attempt to increase corporate power and control on market. Critics has been emphasized that the activity of Corporate Social Responsibility (CSR) has a hidden motive, it seems like company is working for the society whereas in reality its working to built its own image and making more profit. (Corporate Watch)

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND IMAGE

In response of this argument many of the private companies have admitted that they have commenced Corporate Social Responsibility (CSR) not only because its a accurate thing to do but also because it strengthens and provide greater support to their brands. But here companies have added that the Corporate Social Responsibility (CSR) activity provides familiarity to brand and not the favourability. The Corporate Social Responsibility (CSR) activity of the company spreads awareness about the company and its brands to the community. (Agarwal, M. Kaur and S., pp. 681-687) Therefore Corporate Social Responsibility (CSR) can be defined as a collection of companys performance (environmental, social, ethical, economical or financial) to achieve its motive. Or in other words as Business has defined it that Corporate Social Responsibility (CSR) means operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations (Baker, 2004)

BRAND AND BRAND IMAGE:

According to David Ogilvy, brand is the intangible sum of the products attributes i.e. its name, packaging, price, history, reputation and the way its been advertised (ogilvy, n.d.) as I have quoted before in chapter # 1. Whereas the brand image is the perception in the consumers mind linking all the feelings and ideas about the brand i.e. a collection of all qualities and attributes of the particular brand. This image is created by different sorts of advertising and is advocated by the consumers experiences (word of mouth). (dictionary, n.d.) The concept of brand image in actual is that consumer is not only buying a product or service but also the image associated with the particular product/service. Brand image has to be optimistic as well as realistic; it should be different from competitors and should be easily recalled. Brand image is communicated to its target market/ public as well as encouraged from advertising, word of mouth and many other promotional tools. Brand image is the customers extract from the brand. (Management study guide, n.d.)

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND IMAGE

CUSTOMER SOCIAL RESPONSIBILITYA BRAND EXPLANATION:

In this article, the author Tim Kitchin has discussed CSR and brand in detail. He has emphasized on how to change peoples thinking as people are the system, only they can change themselves. According to T. Kitchin brand is actually a major determinant of relationship responsibility. Every brand has a social responsibility which is distinctive to the fine framework of trust that it has established with its stakeholders. (Kitchin, 2003, pp. 312326)

THE RELATIONSHIP BETWEEN CORPORATE SOCIAL RESPONSIBILITY AND BRAND IMAGE:

In the report titled Linking CSR strategy and approaches in local and global markets the author Paolo Popoli has quoted Deigendesch (2009) argument that brands and corporate social responsibility are two sides of the same coin of entrepreneurial achievement. On one side, CSR has a strong effect on brand image and brand equity whereas on the other brand is the outcome of all the activities of company like what it offers? How it communicates its product/services to target market as well as how it operates its business. (Popoli, 2011)
Popoli said that the connection between Corporate Social Responsibility strategy and brand image and equity does not present the equal force in the global perspective as in the local perspective i.e. for a local brand, CSR strategy can be based on practices of choice and prioritization of the different aspects of socially responsible behaviour, according to the main values, cultures and specific expectations of local stakeholders. Whereas for a global brand, differing leading values in different countries present the problem of selecting an approach in formulation a corporate social responsibility strategy. Author has his own opinion the problem between local and global brand cannot be solved by accepting or assuming a global approach, due to the same procedure that have permitted and encouraged the creation of a global market. (Popoli, 2011)

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND IMAGE

WHY DOES CSR NEED TO BE ADAPTED TO AN SME CONTEXT?

Small scale businesses should have an owner/manager having effective personal styles. SMEs typically do not respond to the pressures from stakeholders so they are not into CSR activity as they dont believe that CSR affects brand image or the companys rep utation. But as they can adapt CSR rapidly and can be well positioned to take benefit of new niche segments for their products/services with CSR factors.

MEASURING BRAND EQUITY ACROSS PRODUCTS AND MARKETS:

In an article titled Measuring Brand Equity across Products and Markets the author David has explained that company can measure brand equity by loyalty measures, perceived quality/ leadership measures, association measures, awareness measures and market behaviour and by these measures author has proved that brand equity can be improved and enhanced by CSR activities. (David, 1996)

THE EFFECTS OF CSR ON CUSTOMER DONATIONS TO CORPORATE-SUPPORTED NON PROFITS:

In this article author has emphasized on the relationship of consumer behaviour and corporate social responsibility. Author has proved the fact that CSR has a great impact on consumers behaviour i.e. good CSR activity influences consumer to purchase companys product /services by providing different research facts. Authors have applied a perceived CSR as a means to measure a relationship between CSR activity and consumers attitude and behaviour towards the company. (D.R. Lichtenstein, M. E. Drumwright & B. M.Braig, 2004)

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND IMAGE

A CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN & A STRATEGY FOR IMPLEMENTATION:

In the article A Corporate Social Responsibility in Pakistan & a Strategy for Implementation author has made an attempt to explain the importance of CSR and its implementation in Pakistan. According to the author that companies in Pakistan can gain competitive advantage over the social concerns by applying CSR. And further more author says that by applying CSR activities in Pakistan means creating competitive environment responsibly as it entails cultural agreement and atmosphere to facilitate responsible thinking, practices and attitudes. (Waheed, 2009)

CORPORATE SOCIAL RESPONSIBILITY: THE MEDIATING EFFECT:

In a report titled The Corporate Social Responsibility on Brand Performance: The Mediating Effect of Industrial Brand Equity and Corporate Reputation the group of four authors i.e. Chi-Shiun Lai, Chih-Jen Chiu, Chin-Fang Yang and Da-Chang Pai concluded that their research actually investigates the impact of corporate social responsibility and companys reputation on industrial brand equity. And the observed and obvious end result supported their ideas and points out that corporate social responsibility and companys reputation have their huge impact on the particular companys brand and the authors further concluded that the reputation of the company and industrial brand equity also play a role of a intervening variable between corporate social responsibility and brand performance as well as brand image. (Chi-Shiun Lai, Chih-Jen Chiu, Chin-Fang Yang and Da-Chang Pai, 2010)

EXAMPLES OF RELATIONSHIP BETWEEN CSR AND BRANDS:

TIMES OF INDIA (KALINGATIMES.com) Lead India Campaign by Time of India is a remarkable example for brand building by CSR. Time of India began to bring change in society. It was a CSR activity but the great influence of this activity was on brand building strategy. (Shubham, 2010)

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND IMAGE

NIKE: Nike has appeared as one of the most successful global company in terms of CSR because it has learned from the mistakes it made in past and attacks of numerous NGOs. Nike is the very first company who hired a vice-president for CSR and to publish an annual CSR report, the corporation has done a lot to deal with the public attitude, create its brand as agent of much more committed corporate citizen, and insure itself against any repeat of the consumer boycotts it faced (Shubham, 2010) STARBUCKS COFFEE: Starbucks coffee has been a great promoter of CSR since its commencement. Starbucks closely involves its strategic partners, customers and employees in its CSR activities. Starbucks inclusive projects work within multiple areas including recycling and reducing waste, energy and water preservation, constructing greener stores, approaching climate change, use of fair, trade ingredient & other dignified elements. It is one of the most detectable, perceived and visible CSR activities. Starbuck has reached to significant and large extents to minimize the harmful environment effect of growing coffee. It has paid its employees higher rate than its competitors and also offers more benefits to its employees. A thorough study of Starbucks website reveals that in order to procure and obtain Fair Trade CertifiedTM coffee as part of its supply chain strategy. (Genesis, n.d.) And the whole impact of CSR can be clearly seen on its Return of investment. Its brands and reputation has been enhanced and enriched through its CSR activities and that is why it is still a known famous corporation. PANASONIC CORPORATION: Panasonic Corporation a well known global company of electronics does not require any introduction. Coming to the point the corporation in North America started its CSR activity by having a Nationwide Recycling Program with more than 300 drop-off sites nationwide. And this does show a positive impact on its brands but also it encouraged others company like Toshiba to not only use the recycling sites but also to establish a joint venture of Creative

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND IMAGE

Recycling Systems. Inc (CRS) in 2007. And the communitys response over this activity can be witnessed through the profit the companies made that year and later. (Genesis, n.d.) INTEL: Intel (another well known recognized successful global corporate needs no introduction) was able to reduce energy usage as CSR activity. The company start controlling its energy usage of air conditioners at its offices and product assembling units by elevating one degree temperature. This proposal proved success by an outcome of energy savings of about 6 megawatt-hours and $400,000 energy costs in a year. This energy reduction results in a positive impact on its consumers attitude towards the company and its products. (Genesis, n.d.)

McDonalds McDonalds in Japan participated in the proposal of Japanese governments Team Minus 6% to eliminate CO2 emissions by 2.2 pounds per person, per day. For this purpose Mc Donald offered discount to consumers who registered themselves to participate in the particular program. In the year 2007 Mc Donalds restaurant and their employees helped a lot to promote the cause and encouraged customers to participate more and more. This CSR activity showed a positive response of Japanese towards Mc Donalds. (Genesis, n.d.) CITIGROUP: Employees of Citigroup, in association with its retail clients are helping their company to address climate change and to improve its bottom line. Therefore, in the year 2007 the company decided to go green by launching a project named as Project Green by starting educating their clients to receive electronic statements instead of paper statements. This helped not only in reducing the usage of materials and energy but also enable the company to save money it was spending on printing and on sending snail mails.

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND IMAGE

This step taken by the company not only benefited the company in terms of return and profit but also strengthen the customer relationship as the complaints of not receiving the paper statement eliminated and customers accepted the usage of e-statement as they realized it is beneficial for environment. (Genesis, n.d.)

NATIONAL GEOGRAPHIC MAGZINE SURVEY:

In 2008 surveyed and find out more than 80% of U.S workers polled said that they believe it is important to work for a company or organization that makes the environment a top priority. This survey has shown how much CSR activity has been important not for only its brand and company reputation but also for the employees retention.