Impact of Corporate Social Responsibility on Consumer Behavior in Cosmetics Industry - Research Proposal Example

Introduction

Today, consumers are more conscious and selective about the products they buy and consume. In addition, companies have also become more responsible about the goods and products they sell, supply, and produce (Costa& Menichini, 2013: p155). Indeed, as the relationship between companies and consumers continues to evolve based on the effects of globalization, corporate social responsibility should play an increasingly central role in interactions between both parties. Generally, corporate social responsibility (CSR) activities are based on organizational competitive needs, legal requirements, and consumer demand. CSR may be defined as the voluntary integration of environmental and social concerns in an organizations business operations, as well as stakeholder interaction. In this case, the voluntary aspect enables companies to achieve differentiation from those companies that cannot pursue environmental and social sustainability beyond obeying legal requirements (Costa& Menichini, 2013: p156).

CSR places additional emphasis on the impact that that the organization has on society; as well as the organization’s ability to collaborate with different stakeholders and incorporate consumer concerns. In this case, the stakeholder refers to any person or group that can either affect or be affected by the organization’s strategic objectives. As a result, organizations need to consider the interests of local communities, suppliers, the environment, employees, shareholders, society, and consumers (Virvilaite & Daubaraite, 2015: p538). The consumer as an important stakeholder expects organizations to show social responsibility, especially since they could reward or punish companies through consumption behavior based on their responsibility or irresponsibility. The cosmetic industry is particularly vulnerable to consumer perceptions because of potential product tests on animals, unsustainable ingredients, unethical supplier sourcing, and chemical pollution. Cosmetics companies have, therefore, turned to CSR as a means of reducing the negative impacts of their business operations and also to maximize value for eco-sensitive consumers with the aim of achieving competitive advantage through differentiation (Virvilaite & Daubaraite, 2015: p538).

Problem Statement

While cosmetics companies implement CSR strategies and policies to minimize their negative impacts on the environment and society, more companies are considering CSR as a strategy to enhance long-term growth and profit through differentiation. Such companies may seek to create competitive advantage using CSR innovations that enhance their uniqueness in the industry (Costa& Menichini, 2013: p159). Indeed, consumers are unlikely to purchase cosmetics brands or products of which they have a negative perception regarding environmental practices, ingredient quality, or animal testing. CSR has also emerged as a strategy for enhancing brand value in the cosmetics industry, especially as more companies expand to foreign markets as a result of globalization. Thus, failure to implement sufficient and correct CSR policies for cosmetics companies may place them at a competitive disadvantage that could harm brand image and profits (Costa& Menichini, 2013: p159).

• These assumptions, however, necessitate research into the extent to which CSR affects consumer purchasing behavior in the cosmetics industry.

Purpose Statement

Cosmetics companies, similar to companies in other industries, have realized the importance of socially responsible practices to their consumers and to their overall brand. Cosmetics companies are actively attempting to improve negative consumer perceptions about industry practices by adopting ecologically and ethical practices such as efficient water use, eco-friendly packaging, using ethical ingredients, and abandoning animal testing (Hong et al., 2011: p155). CSR strategies may differ among different companies depending on the activities firms consider more important. The purpose for this dissertation is to investigate the awareness of consumers about these CSR activities, as well as their attitudes to these activities and the impact this has on their purchasing behavior.

Research Aims and Objectives

Based on this purpose, the central aim the dissertation will seek to address is to investigate the impact of corporate social responsibility activities in the cosmetics industry on consumer behavior. The objectives that the dissertation will address are;

• To assess the avenues through which consumers of cosmetics products get information about the company’s CSR activities, if any.
• To assess whether consumers of cosmetics products care about the company’s CSR activities and whether this would influence the price they are willing to pay for the product.
• To assess the extent to which CSR activities influence the decision-making process of cosmetics product consumers during the product’s purchase.

Literature Review

Consumer awareness of CSR

Hartmann et al. (2013: p125) investigate whether consumers are aware of CSR activities aimed at safeguarding them from environmental and safety risks, as well as whether they appreciate these activities, by interviewing (n=123) consumers using standardized questionnaires. The researchers found that most consumers hardly know about CSR activities aimed at them, and that such activities play only a moderating role in the decision to buy specific products. However, the study also found that consumers were interested in CSR and that CSR activities have the potential to influence purchase decisions if consumers were more aware of them, which would increase competitive advantage.

Servaes and Tamayo (2013: p1046), on the other hand, investigated the mediating role of customer awareness on the relationship between corporate social responsibility and company brand value. The findings show that there is a positive correlation between company brand value and corporate social responsibility in with a higher awareness of CSR based on advertising expenditure as a proxy. In contrast, this relationship in industries where consumers have a low awareness of CSR as identified through low advertising expenditures is either insignificant or negative. This indicates that CSR would only add value to the company’s brand if the consumer were aware of these CSR activities.

Consumer Perceptions of CSR

Lee et al. (2012: p1560) explored the impact of perceived fit between the lifestyle and values of consumers and CSR activities pursued by the company on consumer loyalty using mediating variables like consumer-company identification and the consumer’s perception of the activities. In this case, the researchers found that perceived fit between consumer values/lifestyle and CSR activities influence the perception of consumers regarding the company’s CSR activities. In addition, this relationship can also be linked to the consumer-company identification and loyalty of the consumer. Here, the consumer’s perception of CSR activities as supporting their values/lifestyle increases their identification with the company and loyalty to its products.

Further, Kang et al. (2012: p565) investigated the willingness of consumers to pay more for products and services based on the company’s sustainable and environmental-friendly CSR activities. More specifically, they investigated the relationship between the level of environmental concern shown by a company’s CSR activities and the consumer’s willingness to pay for the ‘green’ practices. The findings showed that consumers with more concern for the environment and sustainability were willing to pay more for ‘green’ products, compared to consumers with less concern for the environment and sustainability. Moreover, consumers of luxury products were willing to pay more for ‘green’ products than consumers of economy products.

CSR and Consumer Purchase Decision-Making

Lii et al. (2013: p17) studied the effect of sponsorship, philanthropy, and cause-related marketing, which were considered CSR activities, on the purchase evaluation and decision-making process of consumers. In addition, the study considered the moderating influence of spatial distance and social distance on this process. The findings showed that philanthropy, sponsorship, and cause-related marketing had significant effects on the consumer’s purchase evaluation process in that order. In this case, philanthropy had the strongest effect and cause-related marketing having the weakest effect on purchase decision-making. However, the study also found that low social distance mediated a stronger relationship between consumer evaluations and CSR activities.

Finally, Grimmer and Woolley (2014: p233) examined whether the type of CSR marketing communication message influenced the purchase intentions of consumers; as well as whether environmental involvement had a moderating effect on this relationship. The study’s results did not show a significant difference in the consumer’s purchase intentions in typical product ads, ads purely promoting the product’s environmental benefits, or ads promoting the product’s personal benefits. However, consumers with higher environmental involvement showed enhanced product purchase intention from ads purely showing the products’ environmental benefits. On the other hand, consumers with low environmental involvement showed more purchase intention after exposure to ads showing personal benefits.

Methodology

Research Approach

The purpose of this study is to investigate the impact of corporate social responsibility on consumer behavior in the cosmetics industry. To achieve this purpose, the dissertation proposes to adopt a qualitative approach because of its emphasis on the respondents’ words that will help in determining the different ways in which CSR activities affect consumer behavior. The qualitative approach is a particularly good fit for studies that seek to understand the consumers’ attitudes, values, and interpretations (Silverman, 2013: p22). In this case, the dissertation will be seeking to investigate these concepts as they relate to voluntary actions, environmental awareness, and responsible consumption of cosmetics products. Moreover, qualitative research will enable the study to reflect on the experiences and feelings of respondents with regard to the research questions, as well as to investigate the relationship between the situation and the consumer. Furthermore, using a qualitative approach will provide the researcher with the flexibility and opportunity to learn about the consumers’ elaborations, experiences, and expectations of CSR using their own words instead of relying on the interpretation of quantitative responses (Silverman, 2013: p22).

Research Design

In answering the identified research questions, the dissertation proposes to adopt the descriptive research design. This design is particularly useful in answering questions of what and how in relation to the specific research problem, which is a good fit for this study’s research questions (Silverman, 2013: p41). In addition, using the descriptive research design will also enable the study to obtain information and data related to the current status of consumer CSR perceptions, as well as to describe the aspects of what exists with regard to conditions or variables related to the research problem. Moreover, adopting the descriptive design will allow the study to collect information in naturalistic environments with minimal adverse effect on the respondents’ normal behavior. Information from the descriptive study could also be used to conduct more in-depth quantitative study, specifically by identifying the most important variables that mediate CSR activities and positive consumer behavior for further study (Silverman, 2013: p42). This design will also produce rich data and information, which can be used in crafting recommendations for cosmetics companies to improve competitive advantage through corporate social responsibility.

Data Collection

The study will collect qualitative, primary data using the semi-structured interviewing technique. Semi-structured interviews will provide the opportunity to draft specific questions as part of the interview guide, as well as to come up with follow-up and/or new questions and also to reformulate questions based on the respondents’ reactions and replies to specific questions (Silverman, 2013: p50). This offers more flexibility to ask questions related to the research problem, while also asking the interviewee to make elaborations to some answers to yield rich data for use in making recommendations to cosmetics marketers. In addition, using the semi-structured qualitative interview method provides the opportunity to schedule follow-up interviews with some interviewees during analysis of the data for further elaboration within the structure of the interview where necessary. However, the semi-structured interview faces some limitations in this study, including the fact that it is time-consuming and would require a quiet place to conduct the face-to-face meetings (Silverman, 2013: p50). Nevertheless, the advantages of semi-structured interviews significantly out-weigh the stated limitations.

Sampling and Participants

In determining the impact of CSR on consumer behavior, this study will investigate the effect that CSR activities have on the cosmetics consumption behavior of female students in the university. The participants will be selected and recruited through simple random sampling, which will ensure that all female students in the university have an equal chance of representation. This will significantly reduce human bias potential in selecting participants for inclusion in the sample, while also allowing the study to make generalizations about the sample’s characteristics to the university’s female student population (Denzin & Lincoln, 2014: p44). These generalizations would also have external validity as a result of using this sampling technique, in turn informing the recommendations about using CSR to influence consumer behavior. In this case, the population considered is (N=50) female students at the university, from which (n=15) will be recruited to form the sample. This number was chosen because of limitations to the study’s budget, as well as the time required to collect data from each of these students. The study would proceed on the assumption that the amount of missing data on the population is limited (Denzin & Lincoln, 2014: p45).

Data Analysis

Finally, data from the interviews will be analyzed using the grounded theory method, which involves the grouping of different themes emerging from the interview in codes, concepts, categories, and eventually come up with a theory on the impact of CSR on consumer behavior. After conducting the interviews, the textual information will be coded by breaking it into different contextual components (Denzin & Lincoln, 2014: p31). In this case, the researcher identifies anchors in the interview answers to specific questions to allow for the collection of key points from the interviewee’s answers. After identifying key points from the interview answers, the study will then group codes with similar content and context together to create concepts. These concepts will further be grouped under general and broad categories of similar concepts, which will basically be broad generalized answers for each of the research questions (Denzin & Lincoln, 2014: p31). Finally, the study will generate a theory on the impact of corporate social responsibility activities on the behavior of cosmetics consumers by combining these categories to provide a detailed answer to the subject of this dissertation.

Ethics Statement

This dissertation will strive to fully inform all the research participants to be interviewed about the methods, purpose, and potential uses of the findings, as well as what taking part in the study will entail including any risks. In addition, the dissertation will also respect and ensure that the information provided by the research participants is kept confidential and anonymous. Moreover, the dissertation will be free of any coercion towards the participants with the research respondents being informed that their participation is voluntary and can be terminated at any time without any negative consequences for them. Finally, the dissertation will also seek the informed consent of all participants in writing.