The Impact of CSR on Brand Loyalty

INTRODUCTIONTHE RELATIONSHIP BETWEEN

CORPORATE SOCIAL RESPONSIBILITY & BRAND LOYALTY

Dependant Variable – Brand Loyalty

Independent variable - CSR

DEFINITIONSCSR –

stakeholder theory views CSR more generally as firms having responsibilities towards society. They are about individuals or groups that may be directly or indirectly affected by their activity

DIMENTIONS OF CSR

Corporate Social Responsibility

Economic responsibility

Legal responsibility

Ethical responsibility

Philanthropic responsibility

Economic responsibility –

is one of the dimensions identified. All other business responsibilities are predicated upon the economic responsibility of the firm, because without it the others become moot considerations.” do what is required by global capitalism”

Legal responsibility-

legal responsibility holds that companies “do what is required by global stakeholders”

Ethical responsibility-

•“do what is expected by global stakeholders” by Carroll 1998

•1 .acts responsibly, 2. honors human rights, 3. competes fairly with its competitors, 4. treats employees fairly, 5.honest and upfront about telling the truth by David et al ., 2005 .

Philanthropic responsibility-•“do what is desired by global stakeholders by Carroll (1998)].

•Philanthropy involves firms making a contribution of money or kind to a worthy cause without an expectation of tied benefit with the cause because they wish to be a good citizen by Shaw and Post, 1993; Collins, 1994

•The biased behavioral response expressed over time by some decision- making unit with respect to one or more alternative brands out of a set of brands and is a function of psychological processes. by Jacoby

•Consumer attitudes on a brand preference from previous use and shopping experience of a product. by Deighton, Henderson & Neslin.

•According to Aaker brand loyalty is a measure of the relationship that a customer has to a brand.

•Consumers satisfy their past experience in use of the same brand and incur repurchase behavior. By Aasael

Brand Loyalty

Brand Loyalty

Attitudinal loyalty

Behavioral loyalty

DIMENTIONS OF BRAND LOYALTY

Attitudinal loyalty-

•Loyalty attitude means psychological commitment to a brand.

•Attitudes consist of cognitive, affective and co-native which has been used for classifying the dimensions of brand loyalty

Behavioral loyalty

•behavioral loyalty represents repurchase behavior

Development of a conceptual framework for the relationship

between Corporate Social Responsibility and Brand Loyalty

BRAND LOYALTY

Attitudinal loyalty

Behavioral loyalty

H1

H2

H3

H4

Economic responsibility

Legal responsibility

Ethical responsibility

Philanthropic responsibility

CSR

Proponent Year Relationship

1 Polonsky & Jevons 2006 CSR- Competitive Advantage

2 Moir,Idowu & Towier 2001- 2004

CSR benefit – Customer loyalty

3 Siegel & Vitaliano 2007 CSR- Establish/Sustain Brand Loyalty

4 Lichtenstein et al 2004 CSR – Direct/indirecct relationship to loyalty

5 Friench study- cited in Cailleba

2009 Fairtrade produts – Concern for enviroment

6 Bronn & Vrioni 2001 CSR- Marketing Communitation

7 Bhattacharya & Sen 2004,2001,2008

Positive CSR belifes – Longterm Brand Loyalty

Proponent Year Relationship

1 Sen & Bhattacharya 2001 CSR – Company Evaluation

2 Marin et at 2009 CSR – Company Evaluation

3 Bablak-Curras- Perez et al 2010-2009

Brand awarenes & Brand Image

4 Polonsk y & Speed- Beckey – oslen & Hill-Lachowet et at

200120062002

CSR initiatives –Purchase intention

5

Operationalization of Corporate Social Responsibility and Brand

Loyalty concepts

Economic responsibility

Earnings Per Share (EPS)

Profitability

Rank obtained in the operating industry

Indicators of Corporate Social Responsibility

Legal responsibility

No: of times taxes been paid on time

No: of times fined or cases filed

No: of products or services meeting the minimal legal requirements

Ethical responsibility

No: of environmental friendly products/services

No: of ethical activities/programs

Frequency of servicing and adjusting to environmental friendly production processes

Philanthropic responsibility

No: of CRM activities

Value of sponsorships given per year as a percentage

No: of times managers and employees participated in voluntary and charitable activities

Funds allocated for charitable activities

No: of hours/days spent for charitable causes

Attitudinal loyaltyNo: of customers in a sample preferring a

specific brand

No: of customers considering the brand as a fan/friend

No: of likes for the brand advertised on social media web pages

Indicators of Brand Loyalty

Behavioral loyalty

No: of repeat purchases

Repeat purchase rate

No: of years a particular brand is purchased

No: of brands of a particular product/service purchased

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