
Effect of CSR on Brand Value and their Preferences
In globalized business environment, corporate social responsibility plays significant role. It holds company accountable to the society, stakeholders, public and itself. CSR can also be called as corporate citizenship. As businesses are engaged in ever evolving socio economic and environmental context the relationship between CSR initiatives and brand building has become inseparable. This study shows the intricate relationship between CSR and its impact on the construction of strong brand identity. It helps the companies to distinguish their products among their contemporaries. CSR activities act as a pillar to create an ethical impression of brand in the minds of customers. It is all about public oriented.
The companies take decision not only on financial gain even so on their actions that affect community at large. CSR is an action plan taken by the companies to integrate social and environmental interest in their business operation. It makes the company to be socially accountable to its stakeholders, and the community. CSR is an essential managerial issue in modern firms. The definition of corporate social responsibility defines it as the obligations of businessmen to pursue those policies, to make those decisions or follow those lines of action which are desirable in terms of the objectives and values of society.
The business ethics, social responsibility, and lays the foundation for corporate executives and scholars to use CSR as part of corporate strategy and management decisions. Since being introduced, CSR has become an essential topic in management studies and well developed. CSR plays a vital role in the development of firms and society. As more firms involved in CSR activities, to formulate the relationship between the CSR activities and the social issues. From the perspective of social welfare, some studies also discuss the related managerial practices and imply the importance of firm’s CSR activities about narrowing the gap between rich and poor.
CSR provides a multi-perspective explanation for the responsibility to be assumed in the development of firm and society, with far-reaching impacts. Therefore, a recently more agreed concept of CSR is “Corporate social responsibility encompasses the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organizations at a given time/
Brand value refers to the increment in marketing effectiveness or output of a branded product relative to the same product without a brand. Keller and Lehmann(2001) divide the existing brand equity measurement into three categories. The first one, from the perspective of consumers, reflects the brand strength or brand value with the information of consumers’ attitudes. The second category, from the standpoint of product-market output, examines the production and the benefits that brands add to their products in the commodity market. The third category measures the value of brands as a financial asset from the perspective of financial market output. This thesis takes consumer-based brand equity as the research object. The literature review suggests that the specific dimensions of consumer-based brand equity include brand loyalty, perceived quality, brand awareness, perceived value for the cost, brand uniqueness, and the willingness to pay a price premium for a brand. According to the multidimensional brand equity scale developed by Yoo and Donthu (2000), this study will examine consumer-based brand equity from three dimensions which are brand awareness, perceived quality, and brand loyalty.
The degree of a firms’ CSR matters in shaping consumer-based brand equity. In other words, the degree of a firm’s CSR is positively related to brand awareness, which means that taking CSR activities helps strengthen the brand recognition in consumers’ mind. CSR activities can deliver a positive signal towards consumers. Consumers have a stronger brand awareness when the company substantially engaged in CSR activities.
CSR can influence customer perceptions on a product or service offering and in the end affect company performance through the links in the CSR-Performance Chain. Furthermore, we have found that companies’ level of CSR must lie on or above customers’ baseline (i.e. minimal acceptable level) in order for them to avoid boycotts, since boycotts affect company performance negatively. n a competitive environment, several factors influence the organization’s strategic decisions and outcomes. These include country of origin, ownership structure, firm size, industry conditions, regulatory systems, taxes, leadership, value systems and culture, and social pressures. Yet, the CSR strategy is no exception to the effects of these determinants In particular, family ownership, business groups, financial resource availability banks, and foreign institutional investors drive the extent of spending on CSR programs. While measuring the impact of CSR investments on firm performance, the impact relationship is sensitive to consumer awareness, brand reputation, and financial outcome
Most studies have discovered that CSR has a positive impact on internal factors such as employee commitment to the organization, as well as on external factors such as brand building, corporate reputation, consumer purchase intention, market valuations, and competitive advantage
In the Indian context, family business conglomerate groups, financial institutions, and foreign institutional investors prefer to support CSR investments in which they believe CSR mechanisms are largely linked to consumer markets that lead to increased sales, improved operating margins, gaining more market share, and building long-term customer loyalty. At the same time, CSR, being a non-market strategy, helps firms create societal impact. Note that after introducing the new CSR rules in 2014, there has been an increase in CSR spending by Indian firms. This suggests that mandatory CSR spending and disclosures persuade more business entrepreneurs to adapt to such practices and participate in nation building.