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CORPORATE SOCIAL RESPONSIBILITY IN CHINA:LUXURY CONSUMERS’ ATTITUDE AND BEHAVIORS
Transcript of CORPORATE SOCIAL RESPONSIBILITY IN CHINA:LUXURY CONSUMERS’ ATTITUDE AND BEHAVIORS
Baobao Song Nov. 27th 2012 Introduction Literature
Review Methodology Undergraduate
Beijing University of Posts and Telecommunications
* Major: English
* Minor: Marketing Graduate
M.A. in Mass Communications
* Public Relations
* Public interest comm.
* Strategic philanthropy Background - Luxury consumption in China
* 25% share of global luxury market
* Soon to be the world's largest market
Question: What are explicit factors that could effectively influence Chinese luxury consumers’ attitude and behavior?
* corporate communication and marketing strategy-making processes
* Companies are maintaining their market performance by increasing their CSR investment and integrating CSR into long-term strategic planning (Mahoney and Thorne, 2005) Background - CSR in China
* Annual CSR report has raised dramatically from 32 in 2006 to 582 in 2009.
* The salience of researches in the field of CSR in China is also growing rapidly.
* There should be a growing positive correlation in China between consumers’ perceptions of a company’s corporate social performance and their attitudes and behavior towards the company.
- Information processing theory (IPT)
* perceived service quality
* brand affect
* purchase intention Purpose of study The purpose of this study is to quantitatively investigate the correlations between CSR and Chinese luxury consumers’ attitude and behavior, and examine the differences of attitudes and behaviors towards CSR between Chinese luxury consumers and non-luxury consumers, by researching on both Chinese luxury consumers’ and non-luxury consumers’ awareness, trust, perceived service quality, brand affect and purchase intention Implications - Academic significance
* Contribution on building up literature system of CSR in China
* First time associate CSR with luxury industry
- Professional significance
* Call for attention on long-term CSR strategy in business sector.
* Provide quantitative evidence for managers in luxury industry, whether CSR is an effective tool for their consumer relationship management. Defining CSR Consumers'
to CSR CSR in China Luxury product
Framework Various perspectives in the evolution of CSR So far there is still no strong consensus on a definition for CSR (McWilliams et al., 2006). 1950s 1960s 1970s
in this study Howard R. Bowen, "father of corporate social responsibility" Corporate social responsibility is "the obligation of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society" (Bowen, 1953, p. 6). Keith Davis, the most cutting-edge contribution Davis (1960) defined CSR as “businessmen’s decisions and actions taken for reasons at least partially beyond the firm’s direct economic or technical interest” (p. 70). CSR initiatives could be justified by “a long, complicated process of reasoning as having a good chance of bringing long-run economic gain to the firm” (p. 70). Harold Johnson (1971) described CSR as “conventional wisdom” that instead of striving only for maximizing interests of stockholders, a responsible enterprise also takes into account employees, suppliers, dealers, local communities, and the nation (p.50). Thomas M. Jones (1980) pointed out that one of the corporations’ obligations was to extend “beyond the traditional duty to shareholders to other societal groups such as customers, employees, suppliers and neighboring communities” (p. 59). Carroll (1979, 1991)- Pyramid of CSR This pyramid is now one of the most commonly cited definitions in CSR studies (Tian, Wang & Yang, 2011). CONCEPTUAL dEFINITION The ethical and philanthropic expectations that society has of organizations at a given point of time; and in pursuit of long-term interests, corporations meet these expectations and fulfill the responsibilities in the way of reconciling corporation objectives with its various stakeholder groups’ objectives. OPERATIONAL DEFINITION Gao (2009): content analysis of Top 100 companies’, domestic and transnational, website and CSR report in China in 2007. SIMPLICITY -> sOPHISTICATION
attitude -> BEHAVIOR
QUALITATIVE -> QUANTITATIVE
SIMPLE SURVEY -> COMPLICATED EXPERIMENT
WESTERN WORLD -> gLOBAL positive correlations business sector business sector IN ACADEMIA: Bala and Yeung (2009)
(1) to what extent are Chinese consumers willing to support firms that are socially responsible in their purchasing decisions?
(2) How, why and to what extent are there variations in this support among the Chinese compared to their Western counterparts?
(3) Are Chinese consumers able to differentiate between the various responsibilities of businesses as laid out by Carroll (1979)? Chinese consumers were more supportive of CSR compared to their Western counterparts. Tian, Wang and Yang (2011)
The results found a generally positive link between CSR and consumers’ corporate evaluation, product association and purchase intention. DEFINING Luxury brand refers to high quality, expensive and non-essential products and services that are perceived by consumers as rare, exclusive, prestigious, and authentic and that offer high levels of symbolic and emotional value (Tynan, McKechnie, Chhuon, 2009). INFORMATION PROCESSING THEORY (Miller, 1956) Awareness Awareness of CSR simply refers to consumers’ knowledge and perception of CSR activities in actual consuming behaviors (Pomering & Dolniar, 2009 and Tian, Wang & Yang, 2011). Bhattacharya and Sen (2004) found that from both focus groups and survey research there is significant heterogeneity among consumers in terms of awareness and knowledge of companies’ CSR activities. Lee and Shin (2010) measured consumers’ awareness of CSR on a nine-measure Likert scale, including local economic development, consumer protection, social welfare, donations, education, environmental protection, culture activities, local development and local community involvement (p. 194).
The results indicated a positive relationship between the consumers’ awareness of CSR activities and consumers’ purchase intention. Q1: What is the relationship between Chinese luxury consumers’ versus non-luxury consumers’ awareness level of CSR and their education level?
Q2: What is the relationship between Chinese luxury consumers’ versus non-luxury consumers’ awareness level of CSR and their luxury spending level? TRUST Trust is defined as a willingness to rely on an exchange partner in whom one has confidence (Moorman, Zaltman, and Deshpande 1992). Tust in marketing researches is viewed as trustworthiness that results from the partner’s expertise, reliability, or intentionality. Trust has been viewed as a behavioral intention or behavior that reflects a reliance on a partner and involves vulnerability and uncertainty on the part of the trustor. Chaudhuri and Holbrook (2001) found that consumers’ trust and brand affect combined to determine purchase loyalty and attitudinal loyalty. In a case study of organic food, the results indicated that CSR influenced consumer trust and the trust in turn influenced consumers’ subsequent actions, i.e. attitude and behavior change (Pivato, Misani and Tencati, 2008). Q3: For Chinese luxury consumers versus non-luxury consumers, which group’s CSR awareness level strongly associates with trust of the company? PERCEIVED SERVICE QUALITY (PSQ) According to Zeithaml (1988), perceived service quality is defined as “the consumer’s judgment about a product’s overall excellence or superioity” (p.3). The most well-known and widely applied measurement of PSQ is the SERVQUAL model proposed by Parasuraman, Zeithaml and Berry (1988). This model is a construct of 22 items representing five dimensions of service quality, namely, tangibles, reliability, responsiveness, assurance, and empathy (Parasuraman, Zeithaml & Berry, 1988). Garcia de los Salmones et al. (2005), for example, found that consumers’ perception of CSR behavior could have direct consequences in their assessment of the service and PSQ. Rummell (1999) uses Body Shop to illustrate that its use of natural ingredients and environmentally friendly practices has had positive associations with consumer perception of its products. PSQ has also been proved to affect trust in Thai banking industry (Poolthong & Mandhachitara, 2009). Q4: For Chinese luxury consumers versus non-luxury consumers, which group’s CSR awareness level most strongly associates with perceived service quality?
Q5: For Chinese luxury consumers versus non-luxury consumers, which group’s perceived service quality is most strongly associated with trust level? BRAND AFFECT Chaudhuri and Holbrook (2001) conceptualized brand affect, “as a brand’s potential to elicit a positive emotional response in the average consumer as a result of its use” (p. 82). Previous scholars examined the relationship between CSR and brand affect via mediating factors of company evaluation, identity attractiveness and consumer-company identification. The positive relationship was found to exist (He & Li, 2011 and Marin, Ruiz & Rubio, 2009). Poolthong and Mandhachitara (2009) empirically supported the positive relationships between CSR and brand affect; and trust and brand affect in the Thai banking industry. Q6: For Chinese luxury consumers versus non-luxury consumers, which group’s CSR awareness level is most strongly associated with brand affect?
Q7: For Chinese luxury consumers versus non-luxury consumers, which group’s trust level is most strongly associated with brand affect? PURCHASE INTENTION In the previous literatures, purchase intention has been researched or conceptualized as a part of another construct, such as brand loyalty (Chaudhuri Holbrook, 2001; He Li, 2011; Marin, Ruiz Rubio, 2009), as well as an individual variable (Poolthong Mandhachitara, 2009; Tian, Wang Yang, 2011). Previous literature has provided evidence that purchase intention exists as both direct external outcomes of CSR (Bhattacharya & Sen, 2004), a consequence of CSR awareness (Lee & Shin, 2010), trust (Pivato, Misani & Tencati, 2008) and perceived service quality (Poolthong & Mandhachitara, 2009). Q8: For Chinese luxury consumers versus non-luxury consumers, which group’s trust level is most strongly associated with purchase intention?
Q9: For Chinese luxury consumers versus non-luxury consumers, which group’s perceived service quality level is most strongly associated with purchase intention?
Q10: For Chinese luxury consumers versus non-luxury consumers, which group’s brand affect level is strongly associated with purchase intention? awareness brand
affect Trust PSQ pURCHASE
INTENTION H5 H5: Chinese luxury consumers’ awareness of CSR has positive association with brand affect. H2 H2: Chinese luxury consumers’ awareness of CSR has a positive correlation with trust of the company. H3 H3: Chinese luxury consumers’ awareness of CSR has positive correlation with perceived service quality. H4 H4: PSQ is positively associated with Chinese luxury consumers’ trust. H6 H6: Trust is positively associated with brand affect in luxury consumption in China. H7 H7: Trust has positive correlation with Chinese luxury consumers’ purchase intention. H9 H9: Brand affect has a positive correlation with Chinese luxury consumers’ purchase intention. H8 H8: Chinese luxury consumers’ perception of service quality has positive correlation with their purchase intention. research
method sample variable
measurement SURVEY (1) realistic settings when investigating problems;
(2) high cost-efficiency considering the amount of information gathered;
(3) ability of examining many variables in one survey;
(4) overcoming the boundaries of geographical areas
(Wimmer & Dominick, 2011, p. 185) cONVINIENCE mALL INTERCEPTION bEIJING Harbin The Palace China World Mall Oriental Plaza Beijing Zoo Wholesome and Retailing Market MYKAL Carter Shopping Center underground business streets To identify the luxury consumer and non-luxury consumer, respondents will be asked:
“Have you ever purchased luxury products?”
“How often do you purchase luxury products?” Every 3 female consumer passing by the researcher will be approached when the research is available.
Since majority of the consumers on site are expected to be female, to balance gender composition in the sample sets, and reduce sampling bias, all male consumers passing by will be approached if the researcher is available. awareness TRUST 1). I think X company’s socially responsible actions sincerely aimed at contributing to society.
2). I think X company’s motivation behind their socially responsible actions are charity.3). I think X company has the expertise to accomplish the socially responsible activities they claim to.
4). I think X company took a lot of effort to be socially responsible.5). I think X company’s socially responsible practices made a substantial contribution to the society. 1). I care about environmental protection and energy saving in the daily consumption.2). I pay attention to companies’ and their employees’ ethical behaviors.3). I pay attention to some social issues involving firm’s charitable donations.4). I buy those products that are fine, regardless of whether the provider is socially responsible or not. psq 1). This brand has excellent quality.
2). This brand has good functional value.
3). The appearances of their products match my aesthetical value.
4). Consuming products of this brand gives me good experience.
5). This brand is dependable.
6). This brand keeps its promises to you.
7). This brand keeps its record accurately.
8). I receive prompt service from this brand.
9). Employees of this brand are always willing to help.
10). I can trust the employees of the brand.
11). I feel safe in the transactions with the brand.
12). Employees get enough support from the brand to do their jobs well.
13). Using products from this brand helps expressing myself.
14). Using products from this brand helps state your social value.
15). This brand understands consumers' needs.
16). This brand has consumers' best interest at heart. Brand affect 1). I have passion for this brand.2). I feel self-connected with this brand.3). I feel committed to this brand.4). I am interdependent with this brand.5). Using this brand gives me feeling of pleasure.
6). I form a partnership with this brand. 1). If I am planning to buy a product of this type, I will choose this product.
2). There is a great possibility that I will buy this product.
3). I am willing to pay a little more for this product. PURCHASE INTENTION 1). I have passion for this brand.2). I feel self-connected with this brand.3). I feel committed to this brand.4). I am interdependent with this brand.5). Using this brand gives me feeling of pleasure.
6). I form a partnership with this brand.