Corporate Social Responsibility as an International Marketing Approach

Diplomarbeit von Kolja Paetzold

Introduction:

The purpose of this paper ‘Corporate Social Responsibility (CSR) as an International Marketing Approach’ is to identify an approach to merchandize corporate social responsibility on an international level. Solely promoting a company’s CSR initiatives and its philosophy globally has not yet been attempted. My intention is to illustrate the possibilities of promoting CSR internationally, due to the fact of the rising interest in the subject and the resulting pressure from the outside world.

To pursue this goal, general information about ‘corporate social responsibility’ will have to be illustrated, along with two basic examples at the beginning, so the reader can understand the main framework of CSR. It is shown how companies can evaluate the potential that lie behind the implementation, demonstrating benefits for the company itself and other parties that can profit from CSR initiatives.

Is CSR a product, a service or non of it? Is it possible to promote it as a whole? If not, how can something that is not a product or service be merchandized? These questions will be answered during the course of the paper. Possible problems of this approach during the analysis will be illustrated and swept aside with countermeasures.

To demonstrate the possibilities of using CSR as an international marketing tool, the aspects which can be of use to this approach will be identified. The approaches are underlined by examples making it easier for the reader to follow. Moreover parallels of CSR aspects will be demonstrated to clarify the similarities between them.

It has to be mentioned as well that there are approaches by companies to mislead consumers with false claims for their own profit. But countermeasures against these ‘black sheep’ have been taken and the result will be revealed.

What role does marketing really play for CSR? The relationship between a company’s CSR philosophy and its possible marketing approaches involve different kinds of commitment which will be looked at in detail. But companies also have the possibility to find prominent partners for their efforts to show their social involvement. As a consequence several parties can profit from it due to mutual engagement and goals.

In today’s times in which globalization plays a big role, a company’s CSR initiatives cannot be kept solely on a small scale but must be transferred onto an international level. The question how CSR aspects can be merchandized globally will be examined.

Since the world’s population is growing at a fast rate environmental problems are steadily increasing. Therefore people became more and more conscious of the possible consequences. They started to keep an eye on corporation’s involvement in respect to social and environmental problems, in order to prevent further damage. This is the reason why CSR initiatives are gaining on importance. The key aspects they are concentrating on are, among others, child labor, equal human rights, discrimination of any kind.

In difficult times like these a lot of companies have understood their obligation towards society at large, recognized the potential they have, and are willing to play their part as a corporate citizen.

Table of Contents:

Corporate Social Responsibility (CSR) as an International Marketing Approach.

Text Sample:

Chapter 4.2, Brand Differentiation:

Before pointing out the role and potential of brand differentiation for CSR, you have to understand what the term ‘brand’ actually stands for. Two authors define a brand as follows.

Kotler defines a brand as a ‘name, term, symbol or design, or a combination of them, which is intend to signify the goods or services of one seller or group of sellers and to differentiate them from those of competitors’.

Alternatively, John Murphy, founder of the Interbrand Organization, defines a brand as a ‘trademark which, through careful management, skillful promotion and wide use comes in the minds of consumers to embrace a particular set of values and attributes both tangible and intangible’.

In Germany the organization ‘brands & values’ created the ethical brand monitor to measure the effect corporate social responsibility has on brands and the society:

The Ethical Brand Monitor… … determines the representative status of responsible consumption and the relevance of CSR activities out of the consumer perspective.

… determines the meaning of corporate social responsibility for the image and the preference of product and company brand out of the consumer perspective.

… determines the social value of product and company brands in Germany.

… is the quantitative foundation for the development and examination of brand and company strategy.

… is a corporate project of the brand organization brands & values.

The importance of a product or service brand is generally to distinguish itself from the competition and point out the brand recognition for consumers and customers. Knowing this, we can show the connection to the potential of brand differentiation and CSR. In today’s world brand differentiation is very important because product and/or service distinctions are getting harder to detect. Therefore a company has to find a differentiating factor for its product/service to distinguish the brand by giving it an extra characteristic. This is vital because the characteristics of, for example consumer products, are very similar. Thus it is recommendable for a company to communicate their social responsibility initiatives to the broad public efficiently. Through integrating their social activities into their brand, consequently these activities will be connected to the brand and will influence the buying decisions of potential consumers and customers. Awakening emotional feelings through integrating CSR initiatives on a product brand can facilitate brand differentiation and lead to a better reputation of a company and its brand. For example, Pedigree dog food has chosen to work together with the American Humane Society, who is involved in humane treatment of dogs and trying to find every dog that is in a dog pound a new home as soon as possible. Pedigree makes customers aware of this on their dog food products and has also posted a commercial spot on their homepage showing a dog that is held in a small cage. The message of this commercial is, if you buy Pedigree dog food products you will automatically help dogs to find a new home. The partnership is good for all sides. Dog owners and dog lovers suddenly prefer to buy Pedigree products, instead of others, because they know that pedigree is involved in helping dogs. Pedigree improves its revenues and helps the community by ‘clearing out their dog pounds’. Pedigree chose the right partner, because it helped the brand and the community at large. In a way, one could say that such a relationship can be seen as a symbiosis. The one profits from the other one and vice versa.

Stories are better than facts. A lot of companies show numbers on their packaging that are demonstrating their social engagement, although probably not too many people will directly understand what the company does, how their brand is ‘socially involved’. When a story, at best an emotional heartbreaking one, is connected to a brand just like Pedigree has exemplary done, a strong relationship between brand and customer/consumer has been created. This source of competitive advantage is solely a difference from the competition. Communicating CSR can be in this sense a source of sales, profit and new business opportunities if the investment concept is directed towards future preferences and life attitudes of consumers/customers, and will eventually build a stronger brand which meets people’s expectations. After a brand has differentiated itself from others through communicating its social activities, how can this brand separate itself out from the non-social ones to improve the company’s reputation, credibility and revenues? The key question here is: how is the company communicating its differentiated brand?

McElhaney speaks of the ‘Three Act Buying Experience’ which has three distinct parts: prebuying, buying, and postbuying. Most of the companies tend to concentrate on the prebuying experience. This means making products attractive by communicating their CSR activities through commercials, in hope that the potential customers/consumers go into a store with a certain affinity toward their product. Other companies concentrate on the buying experience. In this case they try to connect their brand with potential buyers by giving them a direct impression of how they are socially involved. A company that produces wines could, for example, put a hangtag on each bottle of wine showing that the wine came from biologically grown grapes. The postbuying experience is hard to solely make use of. Pedigree applies the postbuying experience along with the prebuying, and buying experience. A consumer can have a prebuying experience by watching a Pedigree commercial. Or the person goes into the store and sees on the packaging of a Pedigree product that $1 of every purchased product will go towards pet adoption. And the postbuying experience can be witnessed when a person goes to the web site and looks at the pet adoption guides and adoption information that the company provides. It can generally be said that the composition of a company’s good CSR reputation is closely connected to its brand, thus through its brand differentiation. Consequently, if a company wants to be successful in the long term, its brand (company and product) must be connected with a good reputation as well as with uniqueness.