Corporate Social Responsibility Adds Value to the Brand - Coursework Example

CORPORATE SOCIAL RESPONSIBILITY ALWAYS ADDS VALUE TO THE BRAND Executive summary The corporate social responsibility has gained an increased attention in the corporate where extra attention has been shown towards management of environment, ensuring employee satisfaction as well as in ways of giving back to the society. The efforts are normally meant to improve on an organizations image. This paper intends to evaluate the facts about the premise that corporate social responsibility always adds value to the brand. Based on past studies’ findings as well as other related literatures, there was found supportive evidence that brands links organizations as well as the stakeholders who include customers. Improving on the image and brand perception in the market is strategic in effectiveness in marketing procedures undertaken. It was therefore established that the efforts of organizations in CSR are strategic in improving brand equity and the general organizational image. Improved organizational and brand image is prerequisite to increased customer loyalty to a brand and hence improved organizational performance. Introduction Corporate social responsibility is a familiar notion, normally adopted in business models and alludes to some form of self-regulation by corporate systems (Scharf, Fernandes, and Bruno, 2012, p. 436). It is a system which is built in and self regulating through which businesses ensures frequent evaluation to ensure that they fully comply with the law, international norms as well as with ethical standards (Moir, 2001, p. 1-4). However, though guided by the CSR, business firms are profit driven and as such would overlook the self-regulation by CSR for the sake of profit maximization (Nieto, 2009, pp. 28-29). It is the responsibility of the CSR reports to inform shareholders as well as the other stakeholders such as the public on the environmental performance as well as corporate social performance of a business organization. Brand is a major feature that is often used in marketing and which has significance in measuring corporate performance of an organization. This paper therefore contends that CSR always adds value to the brand of a trading organization. Discussion Trading organizations engage in corporate social responsible behaviors to show positive concerns on environment, communities as well as such related social causes. Among other benefits that result from CSR to trading organizations is the positive promotion of the image of the organization through satisfied employees, customers and the shareholders. In marketing, brand strength determines how well an organization is distinguished from its competitors. Corporate social responsibility becomes instrumental in adding value to a brand through brand awareness, improving its image, establishing its credibility, evoking feelings and eliciting its engagement as shown by Timothy (2014, para 1-4). Scientific studies have also revealed that CSR has the capacity to improve on a firm’s brand image on the goods produced as well as on the firm’s image itself. For instance, a study conducted by Naqv and team (2013, p. 80-90) reveals that companies within Pakistan adopts CSR as a strategic tool for long-term improvement of image within the communities as well as for improved economic performance. Through the CSR, companies are therefore able to engage in practices that are considerate of environmental, social and economic aspects of the business activities. It is through the CSR that the firms are in a position to improve on their brands not only concerning the product images but also on the firms’ images too. It is shown that sustenance in CSR activities/programs improves on the perceptions of stakeholders and customers on the brand of the company and product. The management of corporate brand image is increasingly taking center stage within many corporate in the modern day. The importance of the CSR activities is therefore finding greater meaning in the management of corporate brand image. Corporate brand image is however multidimensional where CSR comes out as a main concept. Singh carried out a study aimed at evaluating roe of CSR in influencing the perceptions of consumers through a cross-cultural analysis. The findings of the study revealed that there is direct relationship between activities undertaken by a company as part of CSR and the communication that exists between con summers and the corporate itself. However, the study established that though companies are investing enormously in releasing the information on CSR to the stakeholders as well as to the customers, break in having the word reaching to the target audience has tremendous effect on the perceptions of the audience towards the company and the products on offer. Companies which are effective in behaving g ethically or that is effective in discharging the CSR expectations receives approval from the society, stakeholders and customers. This is explained by the brand image that the CSR creates on the products and or the company. On the contrary, inefficiencies in delivering on CSR by a company has the potential of ruining the brand image of the company and or its products towards the audiences which are the stakeholders, customers as well as the societies within which the company operates (Singh et al, 2008, p. 607). Negative publicity is therefore seen to be a product of bad perception on executing on CSR by companies and such trading organizations. Though commercial association are seen to have profound effects in consumer markets, the study shows that brand positioning plays a critical role in consumer purchasing decisions and practices. Social issues have therefore the capacity to influence the image of a brand that is created to the people around a company. Proliferation of technology has not been left out in influencing corporate performance through brands and images. This is observable in the manner that in modern world, digital media as well as other platforms of information and communication shape the discharge of corporate’ information. Previously, corporate has had the sole responsibility of discharging any information to the public and this would enable them to release only that information that was necessary for boosting the performance of the company. However, the advancement of technology has enabled the information to be shared from different sources and this implies that not only the ‘favorable’ attributes would be communicated but also the ‘unfavorable’. This therefore implies that a corporate image and brand would be communicated from a variety of sources as against what was in the past. Accordingly then, the corporate brand image is to be influenced on the manner in which management practices on corporate social responsibility are effected. Managers must therefore start viewing CSR as part corporate branding. CSR branded contents are therefore basic components for effective corporate marketing as through the corporate social responsibilities, the consumers are linked emotionally with the products and or the corporate itself. The CSR provides a basis of development of corporate brand and hence, as the study investigates, it shows that it adds value to a brand. Concerning marketing, CSR activities are therefore effective in building reputation for a corporate brand (Torelli, nd, p. 1-6). The modern day economics show increased awareness creation both to corporate and their target consumers on own rights as well as the prevailing market conditions. This explains the ever increasing competition between firms where each firm is working tirelessly towards improving on won brands and the corporate image in order to overcome the market pressures on competition. In fact, the era of information technology has eased the way in which information is shared and this has a direct implication to marketing practices o trading companies. Corporate social responsibility has therefore been accorded greater attention in the foregoing in order to have companies navigate through the competitive environment in business today. Rizkallah (2012, p. 333) argues that consumers has a tendency of being attracted to companies which show concern and care to them as revealed through the corporate social responsibilities undertaken by the company. This therefore shows that corporate should not only be concerned in profit maximization at the expense of the welfare of all stakeholders and the customers but on the contrary, greater efforts should be channeled towards socially responsible behavior, which has the capacity of improving the image of the corporate to the stakeholders and consumers. Marketing strategies pursued by companies should therefore not only be aimed at increasing sales but rather improving the brands for better attitudes of customers which has the capacity to yield higher returns over longer periods. In the study by Rizkallah, attention was directed towards understanding customer perceptions towards particular brands as influenced by quality, price, convenience, brand image and company’s practices among others. This was contrasted in the loyalty that the same customers would portray towards the same products with controlled company practices and the results were informative. The results showed higher sensitivity and loyalty to particular brands on quality as against brand image as well as companies’ practices. However, on controlling the experiment and involving bad practices by the companies, the loyal customers recorded higher likelihood of switching from the products as influenced by bad practices towards the environment as well as towards social practices. Besides, higher concerns were recorded on loyalty to particular brands as regards the social responsibilities undertaken by the respective companies. Higher percentages showed that they would switch from one brand to another in the event that they would know that the companies were socially ‘irresponsible’ as against when they showed great responsibility towards the society (Rizkallah 2012, p. 338-339). The study concluded on the particular essence of companies to be attentive to CSR as the practices had direct influence on the brand’s performance in the market as well as concerning customer perception. Despite the rising importance that corporate social responsibility is increasingly gaining among scholars, little attention is being directed towards studying CSR from the perspective of consumers, which would be more resourceful in informing marketers on the essence of CSR practices. Effective understanding of social responsibility from consumers requires that brands image as well as the relationship between the social responsibilities and the brands be understood thoroughly (Dincer and Dincer, 2011, p. 484-485). True corporate social responsibility is the process of brand and business adaptation as argued by Kitchin (2003, p. 312). According to him, relations are the building blocks to responsibilities and hence brand comes before the responsibilities themselves as a brand brings about the relationships between a corporate and the stakeholders and customers. Besides brands contextualizing relationships between corporate and the customers, they mediate on the organizational promises towards the target audiences. In management of a corporate image, efforts are easily being channeled towards improving on brand perception as is explained through corporate social responsibilities. In fact, to support the reasoning that CSR always adds value to a brand, Tim reasons that responsibility is wholly dependent on the brand. The brand’s ‘social responsibility is in fact seen to be unique both in regard to business segment of operation as well as towards the promises that brand makes with the stakeholders. Brands are celebrated for creating the trust as well as promises though not in direct promises as per se but rather through implication. This therefore has an implication that all responsibilities that organizations strive to undertake are in one way or the other influenced by the brand’s creation. However, in pursuing to fulfill these responsibilities, then brands are benefit. In other words, pursuing CSR and organization adds value to the brand even though indirectly as our premise states. In another approach, one would analyze how corporate social responsibility is used by organizations to build on the organization’s brand equity. CSR enables this through creation of brand awareness, enhancement of its image, establishment of the credibility of the brand, evoking feelings towards the brand as well as engagement of the brand. Besides, CSR facilitates the creation of a ‘brand community’ sense and through these aspects, one would justify that CSR are effective in adding value towards a particular brand as is argued (Creel, 2012, p. 20-21). In particular, the report shows that such social responsible undertakings like donation of cash and materials, improvement of environment as well as employee support programs has the positive outcome of improving on a company’s brand equity. Conclusion Increased attention has been noted within the corporate word concerning corporate social responsibility where companies are increasingly undertaking strategic roles in management of environment, giving back to the society as well as ensuring satisfaction of employees in efforts of improving on their image (Anon, 2012, para 1-4). In this paper’s analysis, we intended to evaluate the facts about the premise that corporate social responsibility always adds value to the brand. The study found supportive arguments from research studies and other literature in support of the premise in those brands presents the link between organizations and the stakeholders who also include customers. Improving on the image and brand perception in the market is strategic in effectiveness in marketing procedures undertaken. The study shows that managements invest heavily in CSR as part of strategic initiatives in improving brand equity as well as the image of the organization in the market. Marketers are therefore seen to be strategic in using the CSR for improving on the brand value, which on the other hand improves on the organizational competitiveness in the market. Improved brand image and equity is also known to improve on customer loyalty as well as such benefits as increased profitability to shareholders. Bibliography Anonymous, 2012, James Gregory of CoreBrand Discusses the Growing Impact of Companies Corporate Social Responsibility Initiatives on Brand Value. 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Available at:< http://www.carlsonschool.umn.edu/assets/166234.pdf> (Accessed on 20 February 2014) Read More