CORPORATE SOCIAL RESPONSIBILITY AND CUSTOMER LOYALTY
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Table of Content
Table of Content 2
Introduction. 4
2. Literature review.. 7
2.1 CSR in the FMCG industry. 7
2.2 The companies and the motivations to adapt sustainable and social behavior 8
2.3 Corporate Social Responsibility and consumers’ motivations to a more sustainable purchasing behavior 10
2.4 Brand reputation and signal to the consumer 11
2.5 CSR and customer loyalty. 12
2.5.1 Consumer Trust 13
2.5.2 Customer identification and relationship with the company. 14
2.5.3 Customer Satisfaction. 15
3. Presentation of the research problem.. 17
3.1 Brand Loyalty and Customer Satisfaction toward CSR practices. 17
3.2 CSR and Customer identification to FMCG brands. 21
3.3 The relationship between CSR and brand image with consumer loyalty toward FMCG brands 23
3.4 The price of green and social products affect the brand loyalty. 25
4. Research Methodology. 26
4.1 Design and Participants. 26
4.2 Measures. 28
4.3 Validity. 30
5. Empirical research results. 33
5.1 Validity Analysis Results. 33
5.1.1 Discriminant Validity. 33
5.1.2 Convergent validity. 35
5.2 Questionnaire Results. 36
5.2.1 Corporate Social Responsibility. 36
5.2.2 FMCG Brands and sustainability. 38
5.2.3 Customers motivations. 40
5.2.4 Customer Identification and Customer Brand Loyalty. 41
5.3 Pearson’s correlations. 42
5.4 Regression Analysis. 43
5.5 Anticipated Results. 46
Conclusion. 48
References. 50
Introduction
Since the beginning of the 21st century, brand loyalty has become a real managerial issue for the companies. Indeed, the globalization had an impact on local markets that were mostly dominated by local companies. Actually, every industries are impacted by this issue, but we will focus especially on the fast moving consumer goods industry (FMCG), and we will study deeply the influence generated by the corporate social responsibility (CSR) on the customer behavior. FMCG industry companies are working in B2C, and one big issue for the brands is the high level of price consciousness expressed by the consumers (Kumar and Advani, 2005).
After a screening, we have seen that some researches have been conducted around the same constructs that are CSR such as brand loyalty, in addition we will study more deeply the consumer trust and the customer identification (Mandhachitara & Poolthong, 2011; Martínez & Rodríguez del Bosque, 2013; Pérez & Rodríguez del Bosque, 2014), the Satisfaction and the loyalty of the customer (Chung, Yu, Choi, & Shin, 2015). Those researches will help us to define a framework in our research, and help us to understand better some constructs already established. This study will be a pioneer in the analysis of the FMCG industry and the attitude of the French consumers toward CSR. Hence we decided to address the following question: Does Corporate Social Responsibility can generate customer brand loyalty toward FMCG products ?
Some managers identify CSR and sustainable business practices as a real asset that can improve the perception of the consumer toward the company or the brand (Kiron, Kruschwitz, Haanaes, Streng, 2012). According to researchers, cutomers are preferring brands that are acting socially and responsibly. Furthermore, consumers are showing more requirement toward the brands and are expecting for high quality products, for relatively low prices (Y. He & Lai, 2014; Kumar, S., Advani, J., 2005). However, we must take into consideration that CSR initiatives are also related to scandals sometimes. Indeed, some CSR engagement taken by global firms have negatively impacted the opinion in the society about CSR practices, and those scandals have awakened doubts and put the sincerity of such actions into question (Han, Zhuangxiong, & Jie, 2018).
Some managers are finding some benefits in over-investing in business sustainable practices, in the aim to improve their own reputation and the coverage of the media, everything on the account of the shareholders of the corporations (Han et al., 2018). Another reason for CSR scandals is that, some corporations are benefiting about the good image of CSR initiatives in the aim to conceal the corporate misdeanour (Han et al., 2018).
We can take the example of the Shuanghui Group, that is one the of biggest meat processing company based in China, and that have been seriously hurt in 2011, by a scandal directly related with the quality of its products. According to one of the company’s report, this scandal around the ‘lean meat powder’ had seriously damaged the annual revenue of the company and resulted of a 6.65% loss (Han et al., 2018). Consequently, in the aim to reduce drastically the panic generated among the consumers, but also the investors and agencies, Shuanghui decided to react. As a reaction, Shuanghui decided to invest and participate in several CSR projects and initiatives, thus the company have made a donation of 130 Million RMB, on the other hand Shuanghui spent 830 Million RMB to association in charge of the environment protection (Han et al., 2018). Obviously, the weight of such investments is so heavy that it makes effect in the media, and with the consumers. As a result, the next year, the Shuanghui Chairman was awarded for this action of the prize of Outstanding Contribution People of Mainland China, and the firm received the award of Excellent Company, and all the event that happened before were considered as past (Han et al., 2018).
It is relevant to look at the dark side of CSR initiatives, because some companies in the FMCG industry could be impacted by the opinion of the consumers about their reasons to go for a more social and responsible business environment. In this research, we will see that it is important for the consumers to recognize himself inside a company, and those kind of scandals could not be forgotten by the consumers, or not so rapidly.
As a result, CSR initiatives have an impact on the consumer decision making, however it is still difficult to measure this impact in terms of benefit for the organization, and yet there are shadow areas that we must explore. Today, even if we know that sustainable business practices have an effect on the consumers, we are not sure that he is buying the products, and also we are not sure about the loyalty toward the brands. This is why in this research we will have a look first about csr practices in the FMCG industry to better understand the context.
Then we will have a look on how companies try to segment their consumers to better answer their attempt and satisfy them. It is important for the companies to identify which consumers will be more receiptive to csr, and thus potentially become loyal.
In this research we will also try to establish the link between CSR and the brand loyalty, and we will deal with the factors of the customer behavior that are important to understand for the companies, in the aim better understand if csr is a good reason or not for the customer to be loyal to a brand.
References
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Оригинальность работы 96%
Table of Content
Table of Content 2
Introduction. 4
2. Literature review.. 7
2.1 CSR in the FMCG industry. 7
2.2 The companies and the motivations to adapt sustainable and social behavior 8
2.3 Corporate Social Responsibility and consumers’ motivations to a more sustainable purchasing behavior 10
2.4 Brand reputation and signal to the consumer 11
2.5 CSR and customer loyalty. 12
2.5.1 Consumer Trust 13
2.5.2 Customer identification and relationship with the company. 14
2.5.3 Customer Satisfaction. 15
3. Presentation of the research problem.. 17
3.1 Brand Loyalty and Customer Satisfaction toward CSR practices. 17
3.2 CSR and Customer identification to FMCG brands. 21
3.3 The relationship between CSR and brand image with consumer loyalty toward FMCG brands 23
3.4 The price of green and social products affect the brand loyalty. 25
4. Research Methodology. 26
4.1 Design and Participants. 26
4.2 Measures. 28
4.3 Validity. 30
5. Empirical research results. 33
5.1 Validity Analysis Results. 33
5.1.1 Discriminant Validity. 33
5.1.2 Convergent validity. 35
5.2 Questionnaire Results. 36
5.2.1 Corporate Social Responsibility. 36
5.2.2 FMCG Brands and sustainability. 38
5.2.3 Customers motivations. 40
5.2.4 Customer Identification and Customer Brand Loyalty. 41
5.3 Pearson’s correlations. 42
5.4 Regression Analysis. 43
5.5 Anticipated Results. 46
Conclusion. 48
References. 50
Introduction
Since the beginning of the 21st century, brand loyalty has become a real managerial issue for the companies. Indeed, the globalization had an impact on local markets that were mostly dominated by local companies. Actually, every industries are impacted by this issue, but we will focus especially on the fast moving consumer goods industry (FMCG), and we will study deeply the influence generated by the corporate social responsibility (CSR) on the customer behavior. FMCG industry companies are working in B2C, and one big issue for the brands is the high level of price consciousness expressed by the consumers (Kumar and Advani, 2005).
After a screening, we have seen that some researches have been conducted around the same constructs that are CSR such as brand loyalty, in addition we will study more deeply the consumer trust and the customer identification (Mandhachitara & Poolthong, 2011; Martínez & Rodríguez del Bosque, 2013; Pérez & Rodríguez del Bosque, 2014), the Satisfaction and the loyalty of the customer (Chung, Yu, Choi, & Shin, 2015). Those researches will help us to define a framework in our research, and help us to understand better some constructs already established. This study will be a pioneer in the analysis of the FMCG industry and the attitude of the French consumers toward CSR. Hence we decided to address the following question: Does Corporate Social Responsibility can generate customer brand loyalty toward FMCG products ?
Some managers identify CSR and sustainable business practices as a real asset that can improve the perception of the consumer toward the company or the brand (Kiron, Kruschwitz, Haanaes, Streng, 2012). According to researchers, cutomers are preferring brands that are acting socially and responsibly. Furthermore, consumers are showing more requirement toward the brands and are expecting for high quality products, for relatively low prices (Y. He & Lai, 2014; Kumar, S., Advani, J., 2005). However, we must take into consideration that CSR initiatives are also related to scandals sometimes. Indeed, some CSR engagement taken by global firms have negatively impacted the opinion in the society about CSR practices, and those scandals have awakened doubts and put the sincerity of such actions into question (Han, Zhuangxiong, & Jie, 2018).
Some managers are finding some benefits in over-investing in business sustainable practices, in the aim to improve their own reputation and the coverage of the media, everything on the account of the shareholders of the corporations (Han et al., 2018). Another reason for CSR scandals is that, some corporations are benefiting about the good image of CSR initiatives in the aim to conceal the corporate misdeanour (Han et al., 2018).
We can take the example of the Shuanghui Group, that is one the of biggest meat processing company based in China, and that have been seriously hurt in 2011, by a scandal directly related with the quality of its products. According to one of the company’s report, this scandal around the ‘lean meat powder’ had seriously damaged the annual revenue of the company and resulted of a 6.65% loss (Han et al., 2018). Consequently, in the aim to reduce drastically the panic generated among the consumers, but also the investors and agencies, Shuanghui decided to react. As a reaction, Shuanghui decided to invest and participate in several CSR projects and initiatives, thus the company have made a donation of 130 Million RMB, on the other hand Shuanghui spent 830 Million RMB to association in charge of the environment protection (Han et al., 2018). Obviously, the weight of such investments is so heavy that it makes effect in the media, and with the consumers. As a result, the next year, the Shuanghui Chairman was awarded for this action of the prize of Outstanding Contribution People of Mainland China, and the firm received the award of Excellent Company, and all the event that happened before were considered as past (Han et al., 2018).
It is relevant to look at the dark side of CSR initiatives, because some companies in the FMCG industry could be impacted by the opinion of the consumers about their reasons to go for a more social and responsible business environment. In this research, we will see that it is important for the consumers to recognize himself inside a company, and those kind of scandals could not be forgotten by the consumers, or not so rapidly.
As a result, CSR initiatives have an impact on the consumer decision making, however it is still difficult to measure this impact in terms of benefit for the organization, and yet there are shadow areas that we must explore. Today, even if we know that sustainable business practices have an effect on the consumers, we are not sure that he is buying the products, and also we are not sure about the loyalty toward the brands. This is why in this research we will have a look first about csr practices in the FMCG industry to better understand the context.
Then we will have a look on how companies try to segment their consumers to better answer their attempt and satisfy them. It is important for the companies to identify which consumers will be more receiptive to csr, and thus potentially become loyal.
In this research we will also try to establish the link between CSR and the brand loyalty, and we will deal with the factors of the customer behavior that are important to understand for the companies, in the aim better understand if csr is a good reason or not for the customer to be loyal to a brand.
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