Brand Building Through Corporate Social Responsibility
For every rupee spent on CSR, firms should spend 10 rupees on marketing the said initiative. Corporate social responsibility has become one of the most important contributions that businesses can make to help society in a number of areas. CSR has been used in diverse areas such as disaster assistance, medical help, and education and has been hugely successful in improving society as a whole. Large firms like Tata, Wipro and Zoho have been among the leaders in corporate social responsibility activities.
The focus of CSR has mainly been on meeting the societal needs and complying with government regulations. CSR is often perceived as a cost that the firm needs to incur in order to continue to do business. When it is perceived as a cost, some firms may hesitate to spend more than what is mandated by law or what they perceive to be affordable. However, it is possible that we can change this cost-based approach to a marketing based approach in order to obtain better benefits for the brand.
When a firm spends money on CSR, they are trying to better the broader society. At the same time, prior research has shown that consumers are more positive towards firms that engage in CSR and other similar activities. The key is in being able to communicate the purpose of CSR effectively to consumers so that they develop a more positive attitude towards the firm.
How does this communication help in building brand equity? Prior research has shown that communication is key in building the right type of brand associations in the consumers’ memory, which in turn will lead to a more positive brand image. One of the key tasks of communication is to improve the overall perception of the brand by building brand associations and brand image. This is done by pairing the key association with the brand name through repeated exposures to this combination. Once a firm is able to achieve this, consumers will be able to recall the CSR activity when the brand name is activated through any sort of exposure. And if they have a positive attitude to the cause, this should help the brand.
A second key aspect of advertising CSR is to pair the brand and the nonprofit for which CSR is being used. When this is done repeatedly, certain positive associations of the nonprofit will be shared and eventually transferred to the brand. Over a period of time, such positive associations will be strongly associated with the brand, leading to a strong and positive brand image. Building such associations without engaging in CSR will cost much more money and may not actually produce the desired result.
A third key aspect of advertising CSR is the ability to reach out to specific segments which were not available earlier through traditional advertising. Advertising the CSR will allow the brand to connect with these sets of consumers and lead to a more positive attitude and eventual purchase intention or even actual purchase. When we consider the cost of reaching new segments and conveying the brand image, CSR will be able to achieve this purpose with much higher efficiency.
In sum, brands need to consider CSR as an investment and as part of the marketing budget. This will allow them to plan campaigns consistent with the marketing objectives of the firm. Such campaigns will also build a strong brand image and equity and lead to future purchases. So, CSR can be a win-win situation for the brand as well as for the nonprofit organization.
The key question is the budget for communicating CSR. There have been a number of suggestions regarding this budget. Mostly, these are guesstimates and we currently do not have a specific number that can be used to decide. This is an area which needs further research to identify the exact multiplier that will be most useful and effective. The consensus seems to be to spend approximately ten times the amount on marketing the CSR activity as was actually spent on the CSR itself.
Views of the author are personal and do not necessarily represent the website’s views.
Sridhar Samu is Associate Professor of Marketing, Great Lakes Institute of Management, Chennai. Before joining Great Lakes, he has worked at the Indian School of Business, University of Manitoba, and Memorial University. His main research interests are in the area of information processing, as applied to brand and social marketing. He has published in the Journal of Marketing, Journal of Business Research, European Journal of Marketing, Journal of the Academy of Marketing Science, and other international journals.
