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Environmental CSR-initiatives influence on Brand Equity

A Case of Eco-Labeling

Written by B. Amin, R. L. Anabtawi

Paper category

Master Thesis

Subject

Business Administration>Marketing & Sales

Year

2013

Abstract

Thesis: Although corporate social responsibility has many different definitions of corporate social responsibility (CSR), this study defines CSR as a company’s “respect for moral values ​​and respect for people, communities and the natural environment” (Davis 1973, Bhattacharya and Sen 2004, 13 ). CSR refers to the concept that companies need to consider broader social benefits, not just the organization's financial self-interest (Chomvilailuk and Butcher 2013; Sen and Bhattacharya 2001), but also has a competitive advantage over competitors. Corporate social responsibility involves focusing on the activities of the company’s stakeholders, namely suppliers, employees, customers, communities, organizations, and the next generation (Sprinkle and Maines 2010). Bhattacharya and Sen (2004) emphasized that consumers are important stakeholders of a company, and managers should understand how and why consumers respond to CSR activities. CSR initiatives are related to consumer responses, such as brand equity (Chomvilailuk and Butcher, 2013). CSR initiatives are an important pillar of an enterprise. As mentioned earlier, this study will focus on how the detergent brand Ariel and the Swan eco-label on the packaging affect brand equity. In order to fully understand the Ariel brand, one must understand the meaning of brand equity and all its components. This research will explain all the components of brand equity and the appropriate propositions and how to measure brand equity. In addition, the relationship between corporate social responsibility and brand equity will be explained. What is a brand? The word brand is a complicated symbol. It is the intangible sum of product attributes, name, packaging and price, history, reputation, and advertising methods. Brands are also defined by consumers' impressions of the people who use them and their own experience (Keller, 2009). In addition, the term brand means that it makes a specific value promise and helps consumers more easily identify brands rather than non-branded products (Kotler, et al. 2010). Branding aims to identify the goods and services of a seller or a group of sellers and distinguish them from these different components of competing products and brands, so as to identify and distinguish it as a brand element. Brand equity Brand equity is the value that a brand adds to a product. It is the intangible value related to the product, which cannot be reflected by price or function. The perceived quality attributed to the product has nothing to do with its physical characteristics, and can be measured by the additional price that consumers pay for the brand and the equivalent non-brand (or store) brand. Environmental CSR related to brand equity The results of visible CSR initiatives are strong brand recognition/identification, brand promotion and brand loyalty (Torres et al. 2012). If an environmental CSR strategy is adopted, the company's image and brand will be recognized as being responsible for the environment (Heikkurinen2010). Previous studies used different methods to measure CSR and brand equity. Hsu (2012) uses a questionnaire to measure corporate social responsibility initiatives and brand equity. The questionnaire is divided into five parts. Respondents’ views on corporate social responsibility initiatives, satisfaction, corporate reputation, and brand equity are two dimensions (brand Awareness and brand association), and finally the respondent. Hsu (2012) uses Keller's model to measure brand equity, which we will use in this research. In this study, we will use Keller's brand equity model, called the CBBE model. In addition, this is tested by how the swan logo affects the various dimensions of the brand equity model. To test the conceptual model (see Figure 1), five hypotheses were developed. In this study, corporate social responsibility is measured by the Swan eco-label, because the Swan logo indicates the environmental corporate social responsibility to consumers (Svanen 2013; Chomvilailuk and Butcher 2013). The issue of the recognition of the Swan eco-label is used as a measure. Variables of corporate social responsibility. Brand recognition The first step in brand recognition refers to the consumer's ability to recognize the brand. Brand awareness includes brand recognition and brand recall. When consumers get product categories, desired categories, or other similar prompts, brand recall reflects the consumer's ability to name the brand. Brand recognition means that consumers can confirm that they have been exposed to the brand before (Keller, 1993; Keller, 2009). Environmental CSRs such as product eco-labels have shown a positive impact on brand awareness. Establishing brand awareness is related to customers' memories and recognition of the brand. Corporate social responsibility behaviors increase brand awareness (Creel, 2012). Therefore, the following propositions are put forward: P1: Environmental corporate social responsibility has a positive impact on brand awareness. In order to statistically measure environmental corporate social responsibility and brand awareness, Spearman's rho related test will be used. The Swan eco-label is a visual label seen by consumers on fast-moving consumer goods that represent environmental CSR. Therefore, this was used as an environmental CSR component in this study. The second step of brand image Brand image defines consumers' perception. When they think of a brand, the series of associations they hold in their minds reflect this. An extremely important aspect of a brand is its image, as reflected by consumers’ associations with the brand. Read Less