Effect of Corporate Societal Marketing on Consumer Behavior and Brand Perception PDF

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Effect of Corporate Societal Marketing on Consumer Behavior and Brand Perception...

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Effect of Corporate Societal Marketing on Consumer

MARKETING MANAGEMENT PROJECT TERM 3

THE REPORT FOCUSES ON WHAT IMPACT DOES THE CORPORATE SOCIETAL MARKETING HAS ON THE BUYING BEHAVIOR OF THE CUSTOMERS AND WHAT ARE THE IMPORTANT FACTORS THAT CONSTITUTE TO THE SUCCESS OF THE CORPORATE SOCIETAL ACTIVITIES. UNDERTAKEN Page |1 BY THE FIRM [Cite your source here.]

CONTEN

GROUP 3 SECTION A

ABSTRAC INTRODUCTION.............................

RESEARCH OBJECTIVE & RESEARCH QUESTION.....................................................................6 RESEARCH HYPOTHESIS……………………………………………....……………………7 LITERATURE REVIEW..........................................................................................................................8 METHODOLOGY..................................................................................................................................13 DATA ANALYSIS....................................................................................................................................14 REGRESSION ANALYSIS:.............................................................................................................................. FACTOR ANALYSIS:..................................................................................................................................... CLUSTER ANALYSIS.................................................................................................................................... CONCLUSIONS AND LIMITATIONS.................................................................................................21 SCOPE FOR FURTHER STUDY..........................................................................................................22 BIBLIOGRAPHY....................................................................................................................................23 APPENDIX...............................................................................................................................................24 QUESTIONNAIRE..........................................................................................................................................

ABSTRACT

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This paper focuses on identifying the relationship between the Corporate Societal Marketing and its corresponding effect on the consumer perception of the product and its brand image. This paper studies to what extent consumers are influenced by major activities conducted by various organization focusing on improving the well-being of the society and using such activities to market its product. What impact does the corporate societal marketing has on the buying behavior of the customers and what are the important factors that constitute to the success of the corporate societal activities undertaken by the firm. Another major focus of this paper is to analyze whether a positive public relation is built by the firm using corporate societal marketing and to what extend customers will overlook the negative issues associated with the product or the firm given that the company invests heavily in various social development activities. Finally the paper concludes with a clear analysis of whether corporate societal marketing is the right way forward for molding the consumer perception of the product in this ever changing competitive market.

INTRODUCTION Page | 3

Corporate Societal Marketing uses the business resources to focus on activities that bring about a behavioral change intended to improve safety, public health, well-being of community or conservation of environment. Since beneficial change in behavior is the major focus of Corporate societal marketing on most occasions it is successful in making real differences for the individual, society or the company. In today’s market that experiences cut throat competition in every field, every firm tries to come up with ways to differentiate its product and present their product and themselves in the most appropriate manner compared to the competitors so as to create a positive brand perception that will drive the purchasing behavior of the consumers and ultimately the sale of the product. One major breakthrough in this regard is the use of corporate societal marketing by different organizations. It keeps in mind the interest of the target customers and then delivers products that not only are in sync with the demands of the customers but also society’s overall welfare. It aims at balancing profit of the firm with the needs of the customers and the overall best interest of the society. Corporate societal marketing works on the concept that the companies should focus not just on having an exchange relationship with the customers but also go beyond delivering the products and work for the long term benefit of the consumer and society. Taking part in socially responsible activities will result in improving the image of the firm in the minds of the customers and this in turn will play a major role in improving the sales of the product. Also the firm can extensively market their product by advertising their role in socially beneficial activities to enhance the brand image of the company that in turn will give an upper hand to the firm compared to a similar product launched by its competitors. There are many ways in which a company can accomplish this goal of incorporating social and ethical considerations into its marketing plans. There are campaigns that emphasize consumer health by marketing the use of organic ingredients or zero use of chemicals and additives in their product thus putting a high value on consumer’s health. Campaigns such as those that heavily emphasize the use of organic products or recycled products that are not going to damage the ozone layer falls under the category of eco-friendly marketing which is yet another type of corporate societal marketing. Then there are firms that do not use imported materials in the manufacturing process of its products. The fact that it uses materials procured from the local

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supplier can be used by the firms to extensively market its product and emphasize on the fact that how its business operations contributes the well-being of local social structure. A lot of work and behind the scene planning is involved in making a successful corporate societal marketing plan. The first step is to find out the social activity that the marketing campaign will try to change regarding which a lot of research is done by the marketing team considering the various statistics and surveys that may indicate how prevalent the campaign can be. Next step is to find out why the activity that is causing the problem exists and what can be done to change it. The final step is to effectively illustrate the message and get the word out. Various strategies can be used in this regard such as use of symbols (awareness ribbon), slogans (Just say “No”) and imagery (photos of starving children). The right medium to convey the message is equally important such as video, television or radio commercials.

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THE RESEARCH QUESTIONS AND RESEARCH OBJECTIVE 1. How familiar are the customers with respect to the various awareness programs undertaken by the government and companies? 2. How customers rate corporate societal marketing compared to traditional marketing techniques? 3. What factors contribute to the success of corporate societal marketing undertaken by companies? 4. How corporate societal marketing programs undertaken by companies affect customer’s behavior? 5. How these campaigns affect the corporate reputation of the firm? 6. What role social awareness campaigns plays in mitigating potential damage from negative stakeholder evaluation? 7. How these programs affect the overall sale of the product?

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RESEARCH HYPOTHESIS H1: Exposure to CSM related to national campaign lead to more favorable buying pattern of consumer H2: Exposure to an advertising message with a CSM component lead to more favorable attitude toward the company H3: Cause and brand fit lead to more favorable brand image of the company

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LITERATURE REVIEW 1. Karen L. Becker-Olsena, B. Andrew Cudmoreb, Ronald Paul Hill (2006 ) The impact of perceived corporate social responsibility on consumer behavior-

Journal of Business

Research, Volume 59, Issue 1 This article reveals consumers do not always reward social initiatives by firms. Doing CSR when the business actions of the firm are not ethical is seen to be a serious misfit by the public. If they perceive that the social act was profit oriented and insincere, then they punish them; only if the motive is sincere do consumers have a good brand perception. In the consumer survey taken, many respondents (52%) said that they would boycott the brand if they perceive any wrongdoing on part of the brand despite its good social initiatives.

2. Jaywant Singh, Maria del Mar Garcia de los Salmones Sanchez and Ignacio Rodriguez del Bosque (Jul., 2008),Understanding Corporate Social Responsibility and Product Perceptions in Consumer Markets: A Cross-cultural Evaluation, pp. 597-611 This article says while CSR does not have too much of an impact on consumers, unethical behaviour does great damage to firm’s reputation. Public do not have much interest in the social activities of companies.

Only if the company makes persistent, continuous efforts in

communicating its activities to the public will there be awareness or benefit from consumer perception. This especially applies to the big names in the industry who are constantly observed. It will bode well for them if they engage in CSR and market their CSR well. It was also found that while consumers react very mildly to positive actions of companies, they react strongly to negative actions. However, this study was conducted in the larger cities of Europe only. So it is not very comprehensive.

3. Satya Menon, Barbara E. Kahn (2003) Corporate Sponsorships of Philanthropic Activities: When Do They Impact Perception of Sponsor Brand? - Journal of Consumer Psychology, Volume 13, Issue 3, Pages 316–327 Page | 8

Consumer perceptions of CSR are more favorable for cause promotions, which do not receive much elaboration, than they are for advocacy advertising, which prompts more elaboration (like lengthy elaboration). People believe a social cause by the company if they perceive that the firm has no vested interests in promoting it. Also, firms should make it apparent, as to why is the cause logically related to the firm, or why is close to its heart.

4. Parminder Kaur(2013),The Effects of Corporate Social Responsibility on Consumer Responses, ISSN: 2278 – 0211 (Online)

This experiment examined the influence of corporate social responsibility and price on consumer responses. Scenarios were created to manipulate corporate social responsibility and price across two domains (environment and philanthropy). Results from a national sample of adults indicate that corporate social responsibility in both domains had a positive impact on evaluation of the company and purchase intent. Furthermore, in the environmental domain corporate social responsibility affected purchase intent more strongly than price did.

5. (November 2005) Influence of Corporate Social Responsibility on Loyalty and Valuation of Services Journal of Business Ethics, Volume 61, Issue 4, pp 369-385 In this article, the research hypothesis that firm’s socially responsible behaviour has direct relationship with consumer loyalty is untrue. There is an indirect relation between consumer perception and brand’s social image. It does affect consumers’ loyalty to a good extent. But it is not just CSR which affects them, but also their ethical image, how much they respect environment and shareholders also influences the perception of people. The study also shows that mass media should be used intelligently.

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6. P. Rajan Varadarajan and Anil Menon (Jul., 1988) Cause-Related Marketing: A Coalignment of Marketing Strategy and Corporate Philanthropy, Journal of Marketing, Vol. 52, No. 3 ,pg. 58-74 It tries to answer through this paper whether programs taken up by companies are cause related marketing or cause exploitative marketing, the level of ethical consideration by the companies following CRM and there adverse effect on company's goals and culture. It also discusses how corporate social responsibility emerged from philanthropic nature to profit making business for the corporate over the years for this they interviewed employees for the companies like Coca Cola to check about their perception about CRM followed by their respective company. Through various examples it shows that how various companies improved their sales through CRM activities- American express in 1983 improved sales by 28% by launching cause-related marketing program for the renovation of the Statue of Liberty. According to the programs taken up by corporate it basically divides CRM activities into 3 categories- CRM and not sales promotion, sales promotion and not CRM, corporate philanthropy but neither CRM nor sales promotion. It also discusses about various managerial dimensions of CRM from gaining national visibility, generating incremental sales, increasing brand awareness, enhancing corporate stature etc. Apart from these other dimensions are such as-time frame of program, level of association of firm and program and geographic scope. It also explains how negative publicity can be countered through CRM example given was American express. But it did not consider the consumer’s point-of-view and has there been any change in consumer perception over the years regarding the CRM activities of the companies.

8. Michal Strahilevitz PhD (2003) The Effects of Prior Impressions of a Firm's Ethics on the Success of a Cause-Related Marketing Campaign: Do the Good Look Better While the Bad Look Worse? , Journal of Nonprofit & Public Sector Marketing, 11:1, 77-92 This research paper discusses the effect of initial perception of the ethical nature of the firm gets effected by participating in CRM activities. Although cause related marketing help in generating short term profit but the effect on brand image is important to understand the impact of CRM in long run. This paper also explains how consumer find their emotions that are generated by Page | 10

buying hedonic products to complement feelings generating from charity and companies make profit based on this affect based complementary method. Even the product quality is affected by CRM in positive way. It mainly discusses the influence of CRM on good and bad company in terms of ethical values for consumers. Three hypothesis are there:H1:The more ethical a firm is perceived to be initially, the more likely it is to be judged as having altruistic motives for getting involved in a cause-related marketing campaign. The less ethical a firm is perceived to be initially, the more likely it is to be judged as having ulterior motives for getting involved in a cause-related marketing campaign.,H2: Firms that are initially perceived as highly ethical will benefit less in terms of improvements to their image as the result of a cause-related marketing campaign than will firms initially perceived as either neutral or unethical and H3: Firms that are initially perceived as unethical will benefit less in terms of improvements to their image as the result of a cause-related marketing campaign than will firms initially perceived as neutral in terms of their ethics. One of the major limitation is that this paper did not explain the impact of CRM activities on neutral firms. It does not measures improvements in a company’s image as the result of a CRM campaign did not involve pre-campaign and post-campaign measures.

9. Xiaoli Nan and Kwangjun Heo ,Consumer responses to corporate social responsibility (CSR) initiatives. Examining the Role of Brand-Cause Fit in Cause-Related Marketing, Journal of Advertising, 36:2, 63-74,ISSN: 0091-3367 (Print) 1557-7805 (Online) Journal This paper makes a comparative study of the impact of CRM activities on the consumers having high brand consciousness and consumers with low brand consciousness. The impact of CRM depend on the medium used, sponsorship and various communication channels used- brand endorsement, celebrity endorsement etc. it also depends on the type of product associated with CRM- people respond positively to orange juice and health issues. It deals with two aspects: 1) impact of CRM vs non CRM on consumers especially for advertisements 2) high brand cause fit vs low brand fit. Different types of CRM activities (takes social cause vs alliance, event sponsorship, celebrity endorsement, association with NGO). Three hypothesis are considered for the research: H1: Exposure to an advertising message with a CRM component involving high brand/cause fit will lead to more favorable (a) attitude toward Page | 11

the ad, (b) attitude toward the brand, and (c) attitude toward the company than exposure to a similar advertising message without a CRM component. H2: Exposure to an advertising message with a CRM component involving low brand/cause fit will lead to more favorable (a) attitude toward the ad, (b) attitude toward the brand, and (c) attitude toward the company than exposure to a similar advertising message without a CRM component. H3: Exposure to an advertising message with a CRM component involving high (versus low) brand/cause fit will lead to more favorable (a) attitude toward the ad, (b) attitude toward the brand, and (c) attitude toward the company. There are various limitations of this paper: it does not discuss about event sponsorship and national scheme. This research in done in developed countries not done for India. It does not analyze for cleanliness issues. It discusses the fact that it is very difficult to quantify the amount of positive impact on brand perception.

10. Roger Bennett ( 2002), Corporate perspective on Cause Related Marketing, Journal of Nonprofit & Public Sector Marketing, Volume 10, Issue 1

It discusses about various aspects of impact of CRM activities on company not just sales and brand image. It is written with respect to company and not consumer. It surveys companies to understand the factors to determine why a particular cause was chosen and to what extent it is implemented. It also includes various factor for project selection, the complete implementation process and various factors that are impacted due to particular project- reputation of the company, employee morale, stimulus to impulse purchase and media attention. It also defines the degree to which the company’s employees are also involved in its CRM activities. The closeness of company with its charity partners that impact the CRM activities to be successful. It also measures various communication channels to understand the degree to which various channels helps to create brand value in the eyes of the customers. There are various limitations of this research: it does not discuss about event sponsorship and national scheme especial related to India. The companies selected are multi-national companies not for small firms. It does not analyze the impact of national campaign like –Swachh Bharat Abhiyaan on the consumers.

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METHODOLOGY Involvement of a company in Corporate Social Marketing is not only affected by their product, but also by the cause it is associating it to. We conducted a couple of Focused Group Discussions (FGDs) to determine which social cause people most relate to and what all factors affect their perception of that particular brand. Both the groups consisted of 6 members each. Participants were selected in a way such that a varied mix of people is achieved who bought the products for basic use and some who still haven’t used the product. The focused group discussion were conducted to determine the perception of people towards Corporate Social Marketing and what factors of CSM people associate the mo...