impact of CSR on Brand Loyalty

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  • 1. The Impact of CSR on Brand Loyalty
  • 2. THE RELATIONSHIP BETWEEN CORPORATE SOCIAL RESPONSIBILITY & BRAND LOYALTYDependant Variable – Brand LoyaltyIndependent variable - CSR
  • 3. DEFINITIONS CSR – 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
  • 4. DIMENTIONS OF CSR Economic responsibility Legal responsibility Corporate Social Responsibility Ethical responsibility Philanthropic responsibility
  • 5. 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 globalstakeholders”
  • 6. Ethical responsibility-•“do what is expected by global stakeholders” by Carroll 1998•1 .acts responsibly, 2. honors human rights, 3. competes fairly with itscompetitors, 4. treats employees fairly, 5.honest and upfront abouttelling 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 kindto a worthy cause without an expectation of tied benefit with the causebecause they wish to be a good citizen by Shaw and Post, 1993;Collins, 1994
  • 7. Brand Loyalty•The biased behavioral response expressed over time by some decision-making unit with respect to one or more alternative brands out of a set ofbrands and is a function of psychological processes. by Jacoby•Consumer attitudes on a brand preference from previous use andshopping experience of a product. by Deighton, Henderson & Neslin.•According to Aaker brand loyalty is a measure of the relationship that acustomer has to a brand.•Consumers satisfy their past experience in use of the same brand andincur repurchase behavior. By Aasael
  • 8. DIMENTIONS OF BRAND LOYALTY Attitudinal loyaltyBrandLoyalty Behavioral loyalty
  • 9. Attitudinal loyalty-•Loyalty attitude means psychological commitment to a brand.•Attitudes consist of cognitive, affective and co-native which has been usedfor classifying the dimensions of brand loyaltyBehavioral loyalty•behavioral loyalty represents repurchase behavior
  • 10. Development of a conceptual framework for the relationship between Corporate SocialResponsibility and Brand Loyalty
  • 11. CSR BRAND LOYALTY Economic H1responsibility Attitudinal loyalty Legal H2responsibility H3 Ethicalresponsibility H4 Behavioral loyaltyPhilanthropicresponsibility
  • 12. Proponent Year Relationship1 Polonsky & Jevons 2006 CSR- Competitive Advantage2 Moir,Idowu & Towier 2001- CSR benefit – Customer loyalty 20043 Siegel & Vitaliano 2007 CSR- Establish/Sustain Brand Loyalty4 Lichtenstein et al 2004 CSR – Direct/indirecct relationship to loyalty5 Friench study- cited in 2009 Fairtrade produts – Concern for enviroment Cailleba6 Bronn & Vrioni 2001 CSR- Marketing Communitation7 Bhattacharya & Sen 2004,20 Positive CSR belifes – Longterm Brand Loyalty 01,2008
  • 13. Proponent Year Relationship1 Sen & Bhattacharya 2001 CSR – Company Evaluation2 Marin et at 2009 CSR – Company Evaluation3 Bablak-Curras- Perez et al 2010- Brand awarenes & Brand Image 20094 Polonsk y & Speed- Beckey – 2001 CSR initiatives –Purchase intention oslen & Hill-Lachowet et at 2006 20025
  • 14. Operationalization of CorporateSocial Responsibility and Brand Loyalty concepts
  • 15. Indicators of Corporate SocialResponsibilityEconomic responsibility Earnings Per Share (EPS) Profitability Rank obtained in the operating industry
  • 16. 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
  • 17. Ethical responsibility No: of environmental friendly products/services No: of ethical activities/programs Frequency of servicing and adjusting to environmental friendly production processes
  • 18. 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
  • 19. Indicators of Brand LoyaltyAttitudinal loyalty No: 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
  • 20. 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
  • 21. Thank You