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Corporate social responsibility (CSR) has impacted on the policies and behaviours
of companies throughout the world. However, relatively little attention has been
devoted to the link between CSR and strategic marketing. The impact of CSR
initiatives on customer and other stakeholder relationships is key to performance
improvement. It is also important to recognise that CSR initiatives may achieve
undesirable effects and that barriers exist to their effective implementation. We
provide a framework examining the degree and type of corporate response to CSR
imperatives and the moderating effects of employee/manager perceptions, other
stakeholder perceptions, and the company’s social credibility. We examine the
impact of CSR on customer value, and importantly the need for a resonating value
proposition that underlines how a supplier’s CSR adds value for the customer. We
conclude with a new management agenda for marketing strategy that examines
CSR opportunities and risks.
Introduction
*Correspondence details and biographies for the authors are located at the end of the article.
The Marketing Review, 2009, Vol. 9, No. 4, pp. 335-360 doi: 10.1362/146934709X479917
ISSN1469-347X print / ISSN 1472-1384 online ©Westburn Publishers Ltd.
336 The Marketing Review, 2009, Vol. 9, No. 4
Several trends and issues can inhibit the ability of companies to develop
effective marketing strategy, or to establish and defend their desired
competitive positions, without making allowance for a societal dimension
in their actions. Perhaps the most significant issue now in being a good
“corporate citizen” is not so much moral obligation, as a business case for
initiatives which protect a company’s market position and provide new
business opportunities (Maignan et al. 1999).
For example, in their recent review of CSR, Porter and Kramer, suggest
that while CSR generally remains imbued with a strong moral imperative,
modern supporters of the CSR movement rely on four arguments to justify
attention and resources for these initiatives:
business; and
4. reputation – CSR initiatives to enhance a company’s image, strengthen
its brand, improve morale, or even raise share prices
Perhaps, to this list should be added the need to respond to the CSR-based
positioning of rivals who are seeking competitive advantage through an
enhanced franchise with the customer, and coping in better ways with
explicit customer demands for the new behavioural standards they expect
in their suppliers.
Importantly, CSR may be associated with significant and measurable
benefits for companies. For example, cause-related projects may impact
directly on income: if firms that create social gains realise cash value in terms
of increased purchases by morally-conscious customers (or those customers
are willing to pay higher prices), or in reduced costs. More broadly, CSR may
have the impact of building long-term customer loyalty, legitimacy, trust or
brand equity (Godfrey and Hatch 2007). Peter Senge and colleagues argue
that after years of scepticism, big companies are acting to cut waste, cut
carbon emissions, find sources of renewable energy and develop sustainable
business models (Senge et al. 2008). There is an increasingly widespread
view that there is a business case for social initiatives – behind the drive for
sustainability lies a growing belief that environmental and social projects
not only improve corporate reputations, but also foster innovation, cut costs
and open up new markets (Skapinker 2008). Unilever’s Pureit machine is
illustrative – it cleans water to provide drinking water without boiling or
the use of mains electricity, and purifies water more cheaply than boiling.
Developed by Hindustan Unilever, the social and health benefits of lower
costs for clean drinking water are evident, but also the potential market for
the product in the rural areas of developing countries is huge.
Indeed, some companies have made high-profile efforts to position as
socially responsible, as an explicit part of their strategy, which may in part be
a response to external critics, but also part of the underlying vision of what
a business is about. Some go even further in advocating the combination of
business and social goals. Moss Kanter uses the term “vanguard companies”
to describe those which are “ahead of the pack and potentially the wave
of the future” because they aspire to be “big but human, efficient but
innovative, global but concerned about local communities [and] try to use
their power and influence to develop solutions to problems the public cares
about”. She concludes from her studies of companies like IBM, Procter and
Gamble, Publicis, Cemex and Diageo that “Humanistic values and attention to
societal needs are a starting point for smart strategy in the global information
age.” In particular, “the leaders of a vanguard company espouse positive
values and encourage their employees to embrace and act on them.” Social
purpose creates strategic advantages, but only if those social commitments
have an economic logic that attracts resources to the firm (Moss Kanter
2009). The Moss Kanter concept of a “vanguard company” reaches for a
post-CSR setting of successful businesses sustained by moral purpose as well
as economic achievement.
By way of illustration, Table 1(overleaf) demonstrates the spread across
338 The Marketing Review, 2009, Vol. 9, No. 4
Adapted from: Pete Engardio, “Beyond the Green Corporation”, BusinessWeek, January 29
2007, p. 53.
Piercy and Lane Corporate social responsibility 339
Consumer priorities
There are accumulating signs that consumers are discriminating between
brands and companies on issues of societal impact and ethical standards.
Shifts in attitudes towards consumption may be difficult to track – for
example, while consumers claim they would pay a 5-10% premium for many
ethical products, in practice such brands usually have tiny market shares
(Grande 2007b). However, a recent five-country survey conducted by market
research group GfK NOP suggests that consumers in five of the world’s
leading economies are turning to “ethical consumerism” to make companies
more accountable (Grande 2007a). Respondents believe that brands with
ethical claims – of environmental policies or treatment of staff or suppliers
– make business more answerable to the public (Grande 2007b).
Commentators on branding suggest that ethical consumption is one
of the most significant issues in modern markets. The conclusion is that
ethical and environmental questions are being posed by growing numbers
of consumers, but they are not always overly impressed by companies’
responses. It is also unclear how robust ethical consumerism will be in the
face of other pressures – sales of organic foods fell nearly 20% in the UK
in 2008, as consumers reverted to cheaper alternatives when economic
conditions worsened. Nonetheless, the impact of “ethical consumerism” is
large and of escalating significance.
Moreover, executives should be aware that the potential impact of ethical
consumers may remain hidden for some time. One important concern is
“conflicted consumers” – they currently buy the product and appear to have
high satisfaction and display loyalty, but they would rather not buy from
you and are poised to switch as soon as a viable alternative appears. They
constitute a “stealth segment” of apparently loyal customers who actually
have major ethical concerns about your company (Fraser 2007).
While the adoption of social causes by organisations has often been based
on the assumption that consumers will reward this behaviour (Levy 1999), it
is unlikely that consumers will blindly accept social initiatives as sincere, and
so may or may not reward the firm with positive attitudes and purchases
(Becker-Olsen et al. 2006). Indeed, research suggests that consumers will
punish firms that are perceived as insincere or manipulative in their social
involvement (Becker-Olsen et al. 2006). Nonetheless, there have been research
findings suggesting a link between a company’s social initiatives and positive
consumer responses in attitudes, beliefs and behaviours (Brown and Dacin
1997, Creyer and Ross 1997, Ellen et al. 2000). Positive associations have
been found between social initiatives and price, perceived quality, corporate
attitudes and purchase intentions (Becker-Olsen et al. 2006).
However, there is a compelling argument that to be effective, social
initiatives must be consistent with a firm’s operating objectives and values
(Levy 1999). Indeed, there is evidence that when social initiatives are not
Piercy and Lane Corporate social responsibility 341
aligned with corporate objectives and values, CSR may become a liability
and diminish previously held beliefs about the firm. There is some priority
for social initiatives and responses to be chosen carefully to reflect the firm’s
values and domain, so that consumers perceive initiatives as proactive and
socially motivated (Becker-Olsen et al. 2006).
Business-to-business relationships
Business-to-business customer concerns with their suppliers’ CSR stance
extend more broadly from environmental concerns to wider ethical issues.
Many large companies already insist on good employment diversity practices
from suppliers, and are reducing or terminating the business they do with
suppliers who fail to heed requests to diversify their workforces. For example,
in 2007 Microsoft dropped one of its UK suppliers because that supplier
failed to meet Microsoft’s standards on employee diversity. Microsoft in
the UK is one of a small but growing number of British companies which
monitor suppliers to ensure that they employ a representative mix of women
and ethnic minorities (Taylor 2007). Suppliers unable or unwilling to meet
the social responsibilities defined by major customers face the risk of losing
those customers to competitors.
Indeed, in addition to questions of ethics in executive behaviour,
there are growing costs for suppliers with marketing practices judged to
represent inappropriate behaviours in managing buyer/seller relationships.
The accusations of corruption and bribery levelled against Volkswagen and
Siemens executives in Germany – for example, the alleged Siemens “slush
fund” to pay bribes to win international contracts – have been damaging
to both companies (Woodhead 2007). The impact of ethical transgressions
is magnified by growing transparency and information availability, making
dubious practices are more difficult to hide. The management of business-to-
business buyer-seller relationships has to be placed into this more demanding
context (Piercy and Lane 2009).
Customer-oriented social strategies directly influence supply chain
relationships. In dealing with suppliers, Home Depot (one of the biggest
buyers of wood products in the US) demands that all its wood products
come from suppliers who can provide evidence of sound forest management
practices. The introduction of formal social responsibility dimensions to
supplier relationships is becoming the norm rather than the exception.
These social responsibility mandates impact on supplier selection, and on
the continuation of relationships with existing suppliers. Organisational
customers’ evolving social responsibility requirements mandate effective
responses. The spread of vendor evaluation approaches which make CSR
demands on suppliers requires continuous and systematic evaluation as the
basis for an appropriate response.
important part of the activities of every board of directors (Lublin 2008). The
attitude of investors toward CSR initiatives may be positive or negative. For
example, it may be from an investor perspective the case for sustainability
is essentially a business case – initiatives are not about “saving the planet”,
but about cutting waste, reducing costs and becoming more efficient. In
2006, Google launched a strategy to switch to renewable energy - while this
reflects the personal beliefs of the founders of the business, it is also true that
Google is a massive user of electricity and renewable energy provides a way
to cut costs (Senge et al. 2008). Nonetheless, when Google announced its
renewable energy strategy, one leading New York stock analyst downgraded
the company, despite clear indications that the initiative would cut costs
– his view was that the company was no longer focusing on its real priorities
(Witzel 2008).
Lobby Groups. There is some evidence that companies with poor CSR
records may experience serious negative consequences, such as large-scale
consumer boycotts, weaker brand image, or reduced sales. Part of this effect
may be accounted for by the growth of consumer groups who actively
promote awareness of what they believe to be company wrongdoing, and
actively promote consumer boycotts (Snider et al. 2003). Activist organisations
have become much more aggressive and effective in bringing public pressure
to bear on companies. They may target the most visible companies, to draw
attention to the issue, even if the company in question has little impact on
the problem. Nestlé is the world’s largest seller of bottled water, and has
become a major target in the global dilemma about access to fresh water.
In fact, Nestlé’s impact on world water usage and availability is trivial – but
it is a convenient target (Porter and Kramer 2006). Lobby groups have the
power to punish companies of which they disapprove. Pressured by PETA
(People for the Ethical Treatment of Animals), 2008 saw companies from
Timberland to H&M and Benetton banning Australian wool – PETA objects
to the treatment of merino sheep in Australia and as one European retailer
noted: “Who wants to be on PETA’s radar screen?” (Capell 2008). There is
sound commercial logic that impels companies like Wal-Mart and Unilever
to look to the Rainforest Alliance to help them certify the tea and coffee they
sell (Skapinker 2008b).
Government. Increasingly, governments use their power to mandate
social responsibility or even to create legislative demands. For example, in
the UK the government is pressuring supermarkets to banish “2 for 1” deals
on fresh food to reduce food waste – policy makers believe that “bogoff”
(buy one, get one free) offers are a main cause of the waste of a third of all
food (Webster and Elliott 2009). The same government is trying to prevent
supermarkets from selling cheap alcohol, which is believed to encourage
teenage drunkenness. When governments act on issues of social impact, the
effect may be far more dramatic than would be voluntary compliance – the
UK domestic appliance industry is looking at a bill of more than £500 million
to meet government plans for recycling, which is more than their combined
annual profits (Willman 2006).
Competitors. Importantly, in a growing number of situations, CSR
initiatives are a significant part of how companies compete against each
other. In 2005, General Electric launched its Ecoimagination initiative.
Ecoimagination has grown out of GE’s long-term investment in cleaner
Piercy and Lane Corporate social responsibility 343
Enthusiasm for combining social and commercial goals for the greater good
of society and the business should not blind executives to the fact that
there are vocal critics of CSR initiatives, and that not all CSR efforts have
achieved their intended beneficial effects. Some suggest, for example, that
“ethical shopping” is no more than a middle class indulgence which offers
very limited benefits to the good causes espoused (Hattersley 2008). Indeed,
one commentator suggests that the deadliest greenhouse gas is actually the
“hot air of CSR” - inclining to the view that the truly responsible thing is to
run a business competently not to be involved in social causes (Stern 2009).
Similarly, others suggest that organic food is “a tax on the gullible” (Lawson
2009). It is perhaps telling that with economic downturn, many government
environmental policies were quietly dropped amid business opposition and
signs that voter priorities were changing (Pickard and Harvey 2008). Others
believe that the more focused concept of sustainability (in the sense of
meeting current needs without harming future generations) will replace that
of CSR in management thinking.
expense of other priorities like R&D), and is often misguided and ineffective
(Grow et al. 2005).
1. helps only a very small number of farmers, while leaving the majority
worse off;
2. favours producers from better-off nations like Mexico rather than
poorer African nations;
3. holds back economic development by rewarding the inefficient;
4. creates a situation where supermarkets profit more from the higher
price of Fairtrade goods than do the farmers; and
5. that only a fifth of produce grown on Fairtrade-approved farms is
actually purchased at its guaranteed fair price.
For example, it was estimated in 2006 that of the £200 million spent on
Fairtrade products in the UK, only £42 million went back to those in the
developing world – supermarkets took 32p in every pound spent and the
rest went to middleman and the licensing fees charged by the Fairtrade
organisation (Ebrahami 2006). The Unfair Trade report claims that “At best,
Fairtrade is a marketing device that does the poor little good. At worst, it may
inadvertently be harming some of the planet’s most vulnerable people”.
Countering intuition
Intuition (and some vocal opinion) would probably suggest that generally
healthy food is “good”, traditional babies’ nappies are “good”, dishwashers
are “bad”, and plastic carrier bags are “bad”.
While consumers who favour healthier eating are likely also to dislike
animal testing, in 2007 it was reported that the trend toward healthier
eating had led to an increase of more than 300% in laboratory experiments
on animals for food additives, sweeteners and health supplements. Animals
appear to have become the victims of the fad for health foods (Woolf 2007).
In 2008, the British government tried to suppress an embarrassing report
finding that old-fashioned reusable nappies damage the environment more
than disposables - the findings are upsetting for proponents of real nappies,
who have claimed that they can help save the planet (Woolf 2008).
Reckitt Benckiser is understandably making much of the fact that
calculations show that using a dishwasher (with Reckitt’s detergent) is more
environmentally-friendly that washing up by hand which uses more energy
and water (Harvey 2007). Even the much-vilified (and increasingly banned)
supermarket plastic bag turns out to be “greener” than the paper equivalents,
which consume more energy and water and produce more pollution (though
more expensive reusable bags are better for the environment that any
disposable bag) (Ball 2009).
say that they thought about workers’ rights, animal welfare and the planet
when deciding what to buy, but sales figures show only 3% of them act
on those thoughts). However, the proportion of consumers buying ethically,
or poised to do so, is now seen as much higher and growing (Skapinker
2007).
One recent US study concludes that companies that act in a socially
responsible manner and advertise that fact may be able to charge more for
their products. The researchers concluded that companies should segment
their markets and make a particular effort to reach out to buyers with
high ethical standards, because those are the customers who can deliver
the biggest potential profit on ethically produced goods (Trudel and Cotte
2008).
Nonetheless, while a company like Primark has been severely criticised
for the labour abuses in its supply chain, Primark is achieving record sales in
the economic downturn because of the low prices on its fashion clothing
imports - their customers appear to place a higher value on a £1 T-shirt than
ethical working conditions for those who make them.
International differences
For the international business, research by Globescan underlines the case
that CSR is judged differently in different parts of the world because peoples’
top priorities vary. So, for example, to Chinese consumers the hallmark of
social responsibility is safe, high-quality products, while in South Africa
what matters most is a contribution to social needs such as healthcare and
education. In countries like the US, France, Italy and Switzerland, and much
of South America, the highest priority is to treat employees fairly. In Australia,
Canada, Indonesia and the UK, environmental protection is the highest
priority. In Turkey, the most important indicator of corporate responsibility is
charitable donation (Maitland 2005).
There is an important need to balance global and local issues in
examining the potential impact of CSR initiatives for the company operating
across national and cultural boundaries.
Company CSR
Responses
Denial/rejection
Employee/ Other
Managers have no belief in the
Manager Stakeholder
impact or importance of CSR
Perceptions Perceptions
Limited engagement
Some moves are made towards
socially-beneficial actions
Customer
Defensive approaches
Value
CSR moves to respond to
customer/competitor pressures
Strategic moves
CSR is an active part of how the Company
company plans and delivers value Social
Credibility
New business models
New ways of doing business focus on
social and commercial value delivery
Denial/rejection
There is little doubt that some executives remain unconvinced that corporate
social responsibility represents anything other than charitable giving, and that
such initiatives are unconnected, or at best only loosely related, to customer
value. Underpinning such responses, and negative attitudes towards CSR,
is probably the residual belief among some managers and investors that
it is simply not the role of business to pursue social goals, but rather to
create the economic wealth that underpins the pursuit of such objectives by
public authorities and not-for-profit organisations. This is a legitimate and
defensible position to take. CSR-related actions in this situation may amount
to little more than meeting legal obligations and compliance with regulation
in countries of production, operation and distribution.
Limited engagement
Philanthropy may involve some degree of alignment of charitable activities
with social issues that support business objectives, although some charitable
giving may be about “doing good” rather than meeting business goals. In
fact, even at the level of corporate giving to good causes, companies are
increasingly choosing projects in which they can be actively involved and
which encompass parts of their business model. This concept of “strategic
philanthropy” is gathering momentum alongside the idea of “capitalist
philanthropy” which suggests that charitable giving should be evaluated as
an investment (Brewster 2008).
Piercy and Lane Corporate social responsibility 349
Defensive approaches
If a firm is essentially, defensive in its stance to social responsiveness, then
its primary concerns with CSR will be the protection of relationships – for
example, with consumers, business-to-business customers, influential lobby
or pressure groups, suppliers, employees and managers, and relative position
against competitors. Currently, the evidence is that most firms concentrate
their communications regarding CSR with their consumers, employees and
shareholders (Snider et al. 2003), showing some neglect of their competitors
and alliance partners (Robertson and Nicholson 1996).
Porter and Kramer warn that defensive CSR, particularly in terms of
responding to the challenges of pressure groups, can result in a series of
short-term, placatory public relations actions, with minimal social benefit
and no strategic gains for the business. They suggest the most common
corporate responses to CSR have not been strategic and are often little more
than cosmetic (Porter and Kramer 2006). Nonetheless, the risks in remaining
inactive when social demands become severe are considerable.
The changing policies at Coca-Cola are illustrative (Ward 2006). Coke
has attracted a barrage of negative publicity over recent years: the alleged
mistreatment of workers in Columbia; the wasteful use of water in drought-
stricken parts of India; delaying acceptance of responsibility for contaminated
product in Belgium in 1999; violently ejecting shareholder activists from the
AGM; and, playing a major role in fuelling the childhood obesity epidemic
sweeping the developed world. Coke has been actively boycotted on university
campuses throughout North America, and in parts of Europe. The company
was in danger of replacing Nike and McDonalds as the chief corporate villain
for the anti-globalisation movement. The threat recognised by management
was negative perceptions of the company progressively undermining the
value of the brand. The new CEO of Coke has mandated a proactive company
approach to social issues, with a goal of making Coke the “recognised global
leader in corporate social responsibility”. The company has undertaken an
audit of labour practices throughout its supply chain, launched several water
conservation projects, embraced industry guidelines restricting the sale of
sugary drinks in schools, and supported initiatives to encourage physical
exercise among children. Yet critics still claim the company is pursuing these
initiatives under pressure, not because they believe they are the right things
to do.
Similarly, when Greenpeace parodied Unilever advertisements, accusing
the company of destroying Indonesian rainforests for palm oil (a key ingredient
of the company’s soaps and margarines), the company was quick to reverse
its position and declare it would buy palm oil only from suppliers who can
demonstrate they did not cut down forestry (Patrick 2008b). As the world’s
largest seller of bottled water, Nestlé’s response to environmental criticisms
was more negative – they responded with a large advertising campaign
linking soft drinks to obesity (Patrick 2008a).
Ultimately, purely defensive CSR plays may create strategic weakness
compared to more CSR-proactive competitors. German carmakers were
attacked in 2007 by Renate Künast, Green MP and former environment
minister, who urged German consumers to buy the Toyota Prius instead of
BMW and Volkswagen cars – because of the lower carbon dioxide emissions
350 The Marketing Review, 2009, Vol. 9, No. 4
of the Toyota hybrid car. In fact, Volkswagen and Mercedes-Benz produce cars
with lower emissions than the Prius. In spite of the facts, public perceptions
are that German carmakers are reluctant followers rather than leaders in
building cleaner cars. The fear is if sales follow customer perceptions, then
Toyota will win the race to provide the low-emission vehicles that people
around the world will drive over the next decades. Weak defensive positioning
on environmental concerns has created a major strategic weakness for the
German car manufacturers, which they now have to overcome (Reed and
Milne 2007).
Strategic moves
The underlying logic with more strategic approaches is that CSR provides
a new growth platform potentially bringing access to new markets, new
partnerships and new types of product/service innovation that generate value
– this represents a shift from compliance and defensiveness to integrating CSR
into strategy to achieve revenue growth and brand differentiation (Pohle and
Hittner 2008). Increasingly such strategic moves involve partnerships with
Non-Government Organisations (NGOs) to combine social and commercial
activities. For example, Unilever is partnering with public health networks
in Africa to promote its anti-bacterial Lifebuoy soap – the NGOs seek to
promote hand washing to prevent the spread of disease, while Unilever aims
to sell more soap (Jopson 2007).
Organizations that make the right choices and build focussed, proactive,
and integrated social initiatives in concert with their core strategies will
increasingly distance themselves from the pack….. Perceiving social
responsibility as building shared value rather than as damage control or
as a PR campaign will require dramatically different thinking in business.
We are convinced, however, that CSR will become increasingly important
to competitive success.
(Porter and Kramer 2006)
Companies like Whole Food Market are illustrative. The value proposition
at Whole Food Market is to sell natural, organic, healthy food products to
consumers who are oriented to healthy eating and the environment. The
company’s stance on social issues is central to what makes them unique
Piercy and Lane Corporate social responsibility 351
in food retailing and able to ask premium prices. For example: sourcing
emphasises purchasing at store level from local farmers; buyers screen out
ingredients considered unhealthy or environmentally damaging; the company
offsets its electricity consumption; spoiled produce goes to regional centres
for composting; vehicles are being converted to run on bio-fuels; cleaning
products in stores are environmentally-friendly. The effect is that every
aspect of the company’s value chain reinforces the social dimensions of its
value proposition, and provides strong differentiation from its competitors.
Nonetheless, the company is known as “whole paycheck” in the US because
of its high prices, and is struggling to return to its roots as a health-food
store rather than a source of “foodie treats”. Whole Foods’ UK operation is
heavily in loss (Smyth 2009).
Perhaps more telling is the emergence of “eco-entrepreneurs”
transforming traditional business models with new technologies. Fast-
moving “eco-upstarts” may be better positioned than established companies
to pursue social goals with commercial benefits. For example, PlanetTran is a
chauffeur service that uses only hybrid cars and aims to save the planet “one
car journey at a time”. Successful with the eco-conscious business community
in Boston and San Francisco, PlanetTran supplies corporate clients with
quarterly reports measuring the environmental benefits of using PlanetTran
compared to traditional transport arrangements (Knight 2008).
Also in the transportation sector, the merger of Zipcar and Flexcar in
2007 created the largest US car sharing service with 180,000 members. Car-
sharing allows members to rent vehicles for periods as short as an hour,
collecting vehicles from locations like rail stations and shopping mall car
parks, and accessing the vehicles with smartcards. Zipcar has already opened
in London with the goal of creating the first pan-European car sharing service.
Convenient car-sharing services may replace car ownership altogether for
many city dwellers (Simon 2007). Zipcar estimates that each car it adds to its
fleet can keep twenty private cars off the road. Nonetheless, with revenues
running at $100 million in 2008, Zipcar is not in profit, and interestingly
Hertz and Enterprise are imitating the Zipcar model in their own operating
models (Aston 2008).
Employee/manager perceptions
The impact of CSR initiatives on customer value perceptions is likely to be
moderated by a company’s employee and manager perceptions of the
initiatives and the relevance and importance of them. On the face of things,
companies can often anticipate positive and supportive employee/manager
perceptions of CSR which will enhance the impact on customer value. For
example, McKinsey research reports that many executives are dissatisfied with
how business responds to social pressures – in one study, 70% of executives
saw room for improvement in how large companies anticipate and respond
to social pressures (Maitland 2006). Indeed, social issues, ethics and corporate
reputation are becoming increasingly important to current generations of
MBA students – who are the managers of the future (Anderson 2008).
Nonetheless, questions may still be raised about the degree to which CSR
initiatives shape interactions between company personnel and customers in
ways which impact on customer value. Giving approval to CSR concepts may
352 The Marketing Review, 2009, Vol. 9, No. 4
differ from changing the way work is done to reflect actual CSR initiatives.
For example, consider the degree to which salespeople buy-in to CSR and
the degree to which their selling efforts reflect CSR to enhance customer
value – this appears often to be limited and a victim of salesperson cynicism
(Piercy and Lane 2009). Certainly, research suggests that high performing
companies fully engage their employees in their CSR objectives, rather than
adopting a top-down approach (Pohle and Hittner 2008).
The link between CSR efforts and customer value is likely to be moderated
by the company’s credibility as a social player, shaped by its history and
corporate reputation. Low credibility may not be an absolute barrier to
implementing useful CSR initiatives, but it may well reduce the impact of
those initiatives on customer perceptions.
Customer value
Risks asserting benefits Risks assuming that favourable Requires deeper knowledge of
which do not really create differences create value for what drives value for the
customer value the customer customer
Corporate What customer benefits In what ways does our How do our CSR initiatives
Social are linked to our CSR strategy make us align with customer priorities
CSR initiatives? more attractive to the and drive customer value?
Responsibility
customer than our
Questions: competitors?
benefits are linked to a supplier’s CSR, in the all benefits value proposition,
to seeking the ways in which CSR strategy achieves a favourable point of
differences compared to competitors, to examining how CSR initiatives align
with customer priorities and thus drive value for the customer.
Consider the case of Philips environmentally-friendly Alto industrial
lighting tubes. While containing less toxicity, the Alto product was more
expensive than competing light tubes, and conventional suppliers sold on
price and bulb life to purchasing officers. Telling buyers that the tube is
more environmentally-friendly (as part of an all benefits approach) or that
it is more environmentally-friendly than competitors’ products (favourable
points of difference) is unlikely to impress purchasing officers accustomed
to evaluating alternatives on price and bulb life. However, appealing to, for
example, shopping mall developers on the basis of reduced disposal costs
(because the green product is less toxic) and environmental image (the
cleaner lighting becomes part of their environmental appeal to consumers)
was effective. Alto replaced more than 25% of the US market for traditional
fluorescent lamps (Chan and Mauborgne 1999).
Conclusions
between CSR and customer value, and the link between CSR and a resonating
value proposition to a customer.
References