Saint Petersburg State University
Graduate School of Management
THE EFFECTS OF CORPORATE SOCIAL
RESPONSIBILITY ON LUXURY BRAND TRUST
Master’s Thesis by a 2nd year student
Concentration – Management
Karina Baisheva
Research Advisor:
Sergey A. Starov, Doctor of Economic
Sciences, Professor of Marketing Department
Saint Petersburg
2017
Автор
Название
магистерской
диссертации
Факультет
Направление
подготовки
Год
Научный руководитель
АННОТАЦИЯ
Баишева Карина Валерьевна
«Влияние корпоративной социальной ответственности на
доверие потребителя к люксовому бренду»
Высшая школа менеджмента
080200 “Менеджмент”
2017
Сергей Александрович Старов, д.э.н., профессор кафедры
маркетинга
Описание цели, задач
Цель
данного
исследования
состоит
в
выявлении
и основных
взаимоcвязей
результатов
(КСО) и доверия потребителя к бренду “люкс”. Для ответа на
корпоративной социальной ответственности
вопрос исследования было необходимо решить следующие
задачи: (1) определить понятийный аппарат бренда и
корпоративной социальной ответственности; (2) выявить
основные тенденции в индустрии роскоши и ее характерные
черты; (3) проанализировать конкретные характеристики
потребительского доверия к бренду; (4) разработать модель
влияния
социальной
ответственности
на
доверие
потребителей к бренду “люкс”; (5) изучить возможную
взаимозависимость
социальной
ориентации
люксового
бренда на доверие к бренду. Для достижения поставленной
цели на основе теоретического анализа была разработана
модель
для
потребителя
раскрытия
к
взамосвязи
международному
между
люксовому
доверием
бренду
и
корпоративной социальной отвественности через основные
характеристики бренда. Тестирование теоретической модели
было проведено на основе моделирования структурными
уравнениями.
Ключевые слова
Корпоративная социальная ответственность, люксовый
бренд, имидж бренда, доверие к бренду
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Master Student's Name
Master Thesis Title
ABSTRACT
Karina Baisheva
“The effects of corporate social responsibility on luxury brand
trust”
Faculty
Graduate school of management
Main field of study
080200 “Management”
Year
2017
Academic Advisor’s
Sergey A. Starov, Doctor of Economic Sciences, Professor of
Name
Marketing Department
Description of the goal,
The purpose of the study is to identify the relationship between
task and main results
corporate social responsibility (CSR) and consumer trust toward
luxury brand. To answer the research question it was necessary to
reach the following objectives: (1) to define conceptual framework
of brand and corporate social responsibility; (2) to identify trends
and main characteristics of luxury industry; (3) to analyze the
specific characteristics of consumer brand trust; (4) to develop a
model of coprorate social responsibility influence on luxury brand
trust; (5) to investigate the possible relationship of luxury brand’s
social-orientation on brand trust. To achieve this goal, a model
was developed on the basis of theoretical analysis to identify the
relationship between consumer trust towards an international
luxury brand and corporate social responsibility through the main
characteristics of the brand. The theoretical model was tested on
the basis of structural equation modelling (SEM).
Keywords
Corporate social responsibility, luxury brand, brand image, brand
trust
5
CONTENTS
INTRODUCTION ................................................................................................................................. 7
CHAPTER 1. THEORETICAL RESEARCH ON BRAND CONCEPT AND SOCIAL
RESPONSIBILITY ............................................................................................................................... 9
1.1 Investigation of a Brand Concept ...................................................................................................... 9
1.1.1 Brand Nature and Definition .................................................................................................. 9
1.1.2 Strong Brand and Brand Equity Model ................................................................................ 11
1.2 Social Responsibility and Brand Management ............................................................................... 16
1.2.1 Corporate Social Responsibility and its Dimensions ........................................................... 16
1.2.2 Socially Responsible Brand ................................................................................................. 19
1.3 Luxury Brand and Social Responsibility ........................................................................................ 24
1.3.1 Luxury Brand Definition .................................................................................................... 24
1.3.2 Corporate Social Responsibility in a Luxury Industry ........................................................ 32
1.3.3 Research Question and Conceptual Model ......................................................................... 34
CHAPTER 2. RESEARCH METHODOLOGY .............................................................................. 38
2.1 Research Methods for Brand Trust and Consumer Behaviour ....................................................... 38
2.2 Methodology of Empirical Study .................................................................................................... 40
2.2.1 Methodology Overview and Variables Description ............................................................ 40
2.2.2 Sample and Data Collection ................................................................................................ 44
CHAPTER 3. RESULTS OF THE ANALYSIS AND DISCUSSION ............................................ 47
3.1 Data Analysis and Statistical Findings ............................................................................................ 47
3.2 Theoretical Contribution, Limitations and Further Research.......................................................... 53
3.3 Managerial Implications .................................................................................................................. 54
CONCLUSION .................................................................................................................................... 56
REFERENCES .................................................................................................................................... 57
APPENDICES ..................................................................................................................................... 65
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INTRODUCTION
Today social responsibility becomes one of the most discussed issues. It concerns all
the spheres of the society and, thus, businesses contribute more to the development and
maintainance of corporate responsibility strategies to reach several objectives of the company
and target a complex social problem, bringing about a “social change”, which could imply
environmental sustainability, protection of human rights and advancing ethics. Traditionally
social responsibility has been mainly associated with social entreprises, where impact that a
company has on a society is in priority. The companies with an established corporate social
responsibility policy refer to a category of traditional business, following the companies that
allocate some percentage of the revenues to charities and mainstream market companies.
Socially driven business is the enterprise that has both characteristics of the traditional
business and revenue generating social enterprise.
Corporate social responsibility has recently touched luxury market, which has drawn
public attention and was not taken seriously for the decades. However, this attitude towards
luxury brands stems from the low market opennes level as well as the prejudice that luxury
industry is a product of emotions and creativeness of its manufacturer, where the market
players are predominantly guided by intuition rather than rationalism. Luxury market is
regarded as special mainly because it does not fit in the traditional economic development
models. It rapidly recovers from turmoils and hardly reacts on financial crisises, and always
introduces changes at the same time staying the leader of brand names number.
The concept of social responsibility and luxury are interrelated as luxury consumers
are seeking for excellence in its variety forms. The most important feature here is the
“quality” of the product that consumer purchases. If the history of the product creation
implies the unsastainable production, violation of human rights during, for instance, the
diamond mining, it can strongly affect the consumer’s attitudes towards a brand. The
consumer does not want to purchase the product with a bad history of creation. Consumer
buys a story behind the brand; and especially it concerns the luxury brands. However, still
many of people cannot see the possible link between social responsibility, sustainability and
luxury.
Luxury is a business of a brands’ variety and it is offering “dreams” to its consumers.
These are major characteristics distinguishing this industry from the other ones. Traditionally,
it is considered that such a brand is based on its philosophy and traditions, or historicism,
emphasizing the brand’s historical context. Today, luxury brands should face new challenges,
which rapidly emerge worldwide, and it refers not only to the consequences of technological
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development processes known as digitalization. It can be observed that the meaning of the
consumer’s aspirations towards a luxury brand is also constantly transforming. Consumers
are becoming more social aware, they expect social good when purchasing the product.
Therefore, the aura of a luxury brand requires the constant process of recovery, which is one
of the reasons to introduce new policies of the brand, and it also concerns corporate social
responsibility within the company that, assumingly, increases the level of brand trust.
The research “The effects of corporate social responsibility on luxury brand trust” is
dedicated to consumer trust towards social responsbile luxury brands. The research question
is “Do socially responsible practices of luxury companies impact consumer’s trust towards a
luxury brand?” The objectives of the research are the following:
1. to define conceptual framework of brand and corporate social responsibility
2. to identify main characteristics of luxury industry
3. to analyze the specific characteristics of consumer brand trust
4. to develop a model of corporate social responsibility influence on luxury brand trust
5. to investigate the relationship of an luxury brand’s corporate social responsibility on
brand trust
This study consists of three chapters. The first chapter is dedicated to the investigation
of existing literature on brand and its characteristics, specifically luxury ones, and corporate
social responsibiltity concept and its dimensions. The author of the research has reviewed the
literature, which contributed both to the theoretical and empirical implications, to conduct the
proper analysis and to answer the questions concerning the development of brand
management strategies to follow social responsibility reqirements. The exsisting literature
provided the author with the necessary implications and contributed to discovering the
research gap that is to be filled in the given research.
The second chapter is dedicated to the overal overview of the methods that are used
for research on consumer behavior as well as the methodology of the current empirical study.
It will describe the data collection process and analysis of the data, which was made on the
basis of the multiple regression analysis. The third chapter provides the description of the
analysis results, research limitations and managerial implications. It will elaborate on the
possible practical solutions for the companies built on the statistical results.
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CHAPTER 1. THEORETICAL RESEARCH ON BRAND CONCEPT
AND SOCIAL RESPONSIBILITY
1.1 Investigation of a Brand Concept
1.1.1 Brand Nature and Definition
Traditionally brand is commonly associated with a combination of signs, symbols,
pictures that are intended to identify the product and to differentiate its products from
competitors (American Marketing Association, 1960). This vision of the term “brand” is
proposed by the American Marketing Association: “A brand is a name, term, design, symbol,
or any other feature that identifies one seller’s good or service as distinct from those of other
sellers” (1960), which is the mostly used in brand management. Aaker (1996), Kotler (2012)
and other well-known experts in the field of marketing and brand management also followed
this definition. This leads to two main functions of the brand: product identification as well as
the distinctiveness of products in a competitive environment. However, this definition is
classical and narrow. For a more precise definition of a brand it is useful to consider the
product concept, as it is closely related to a brand. According to this concept, the “core” of
the product, or its first level, is the intangible benefit of an actual product, operational and
technical specifications that define the basic use of the product, or, its benefit (Kotler &
Armstrong, 2012). The second level is a generic product, a set of its attributes, its quality and
brand image, meanwhile the next levels refer to the expected, augmented definition of a
product, namely, its value-added services that distinguish this product from competitors’
products, in other words, the characteristics of the products that make a certain product more
attractive to the consumer (Kotler & Armstrong, 2012).
The most important objective of effective brand management is to ensure that the
brand influences consumer behavior, which is essential for maintaining profits (Romero &
Yagüe, 2015). Hence, to achieve this, the company should have the unity of three
components: goods and services, brand identity, brand image and brand content. It is
necessary to mention such important concepts in relation to the brand as brand image or its
perception, the identity of the brand or the company’s vision on how the brand should be
perceived, brand positioning or the element of the brand identity and value proposition,
which is actively communicated to the target audience (Faircloth, Capella & Alford, 2001). It
is also essential to recognize the difference between brand name and the product and,
therefore, the concrete reasons why it is necessary to create a brand, not just to promote the
9
product. Thus, the latter includes such features as application area, functional properties,
quality and value. The brand properties include brand products consumers’ association with
the country of origin and the company, brand personality, and most important, emotional
benefits (Nasab & Abikari, 2016) and benefits of self-expression that a brand can deliver to
the consumer.
Having a strong brand is vital in the time of existing competing products with the
same features. Brand can offer a lot more features and benefits that can help consumer to
personalize the brand. In the marketing literature brand content is called brand identity, as
one of the main functions of the brand is the identification of goods or services (Faircloth,
Capella & Alford, 2001). Identification is the merger of perceived object with the one stored
in memory, which could coincide on substantive grounds. Brand management specialists
differentiate content when they use the brand and identity term. Thus, Aaker (1996) indicates
that the identity of the brand is particularly the idea behind the brand, namely, brand
perception that a company wants to achieve, the ideal content of the values that a brand could
offer. Therefore, brand stands out for a special individuality, corporate knowledge and value
system.
Aaker (1996) suggests the following definition: “The identity of the brand is a set of
unique associations that the brand developers need to create or maintain. These associations
represent the value of the brand and the promises that are given to consumers”. Hence, the
brand is a unique set of attributes associated with the brand that describes its promise to the
consumers. Jean-Noël Kapferer (1997), leading European authority on brand management,
indicates that a brand has a differentiation function and the fuction of having an influence on
consumers. In this sence, brand has a character, goals and values that present a unique brand
differentiation. According to the brand definitions proposed by the literature, it could be
stated that a brand identity has the following characteristics: it is a strategic concept of a
brand, its external expression, an aggregate of his identity; it reflects the unique brand
characteristics that motivate the buyer; it plays a key role in the process of brand recognition
of the consumers; forms its originality. Brand identity is the main motivational element of
brand management. Kapferer (1997) believes that the brand identity is clearly defined when
the firm formulates answers the questions about the specific purpose and vision of the brand,
the characteristics that make the difference and the nature of the brand, its value or values.
Thus, the characteristic feature of the system is a specific concept possesses the following
features: unambigous and precise identification, differentiation, influence on consumer
behavior, i.e. retention of existing and attraction of potential customers. According to
10
Wheeler (2006), the basic requirements for the best brand identity systems are memorability
and authenticity. Moreover, a brand should add value. Therefore, the identity of the brand
should be unique, easy to understand and consistent with the overall level of development of
the enterprise. The concept of the Brand Value Chain offered by Keller and Lehman (2003),
one of the most valuable dimensions related to brand knowledge is brand image or brand
association.
Therefore, looking on the brand, which is “a manifestation of consumers” (Aaker,
1996) and brand structure and characteristics, it can be concluded that the brand’s identity
and brand image are the foundation for building brand coherence and brand responsibility.
Building such a strong brand requires involvement of all the organization’s departments and
taking into account all the stakeholders.
1.1.2 Strong Brand and Brand Equity Model
The number of brands is steadily growing, and for the existing brands it is more
difficult to maintain reputation and trust of consumers in the circumstances of external and
internal barriers. David Aaker, the author of one of the most famous work about branding
“Building strong brands” (1995), discusses the obstacles that potentially influence the brand.
Among these factors there are price, competitors proliferation, fragmentation of the brands in
the media channels and different markets, the growing number of brands that could compete
with the existing ones. Today brands are constantly facing these issues. The reasons
mentioned refer to the external factor group, whereas Aaker (1995) outlines that the internal
factors such as the constant willingness of the management to change the brand and to make
it more related with the trends and the needs of the society as well as the willigness to invest
elsewhere caused by chasing the profitability objectives and the bias against innovation that
does not lead the organizations to perform short-term results.
These possible pitfalls for brand-managers can be split into several groups. The first
one concerns attention to the brand image that could be unnecessarily high and demanding.
Brand image, enhancing brand equity development, is based on the tactical aspects of brand
management, while the overall system of the brand represents a strategic tool to create and
manage long-term brand equity (Faircloth, Capella & Alford, 2001). Brand image can be also
damaged by negative emotions evoked by company’s behavior (Nasab, Abikari, 2016). The
second trap is the overreliance on brand positioning. Positioning always implies adaptation of
the system of characteristic features of the brand to the specifics of the local market (Alden,
Steenkamp & Batra, 1999). Brand positioning occurs by means of communication, and
11
marketing is only part of the brand identity. Positioning could mean possible destruction of
brand identity in the case of taking too much into account the peculiarities of demand and
supply in a particular local market, as the brand positioning is a local adaptatiotion of the
global brand identity (Aaker, 1995).
The following traps group is the one that is called “outside observer” (Aaker, 1995).
In this case the brand owners, dragging the ability to influence consumer behavior, ignore the
impact of a strong system of the characteristic features of the brand on the company’s
employees, namely, the influence of corporate values, vision and mission, which is also
mentioned in the research of Farjam and Hongyi (2015). The development of characteristic
features of the brand is based on the principle of “inside out” to adapt the corporate culture to
customer needs and market conditions. The principle of “outside to inside” makes it possible
to take into accounts the needs of consumers with respect to the produced goods and services.
Only the balance of these two trends allows the starategy implementation and satisfaction of
customers needs. According to Aaker (1995), the fourth pitfall refers to the excessive
enthusiasm for the development of the functional features of goods, its functional purpose,
quality, etc. However, brand is more than just a commodity. Moreover, brand perception can
be reduced to its visual and verbal characteristics only that conteracts the fact that brand is
not only its brand name, logo, sales strategies, but it is also the idea behind it (Aaker, 1995).
Aaker (1995) describes ten possible guidelines for building a strong brand. The first
one refers to brand identity and the perspective of four facits of the brand, namely, the brandas-person, brand-as-organization, and brand-as-symbol, as well as the brand-as-product. It is
also necessary to modify brand according to the demand of local markets and customer
segements according to “consumer cultures” (Alden, Steenkamp & Batra, 1999). The second
one concerns the brands value proposition, important for understanding and development of
the relationship between customer and the brand. The next step following after the credibility
is the positioning that also allows implementing the proper communication strategy between
the brand and its consumers. Afterwards, brand management should follow the execution of
the communication strategy and maintain the consistency of the brand, understanding the
possible risks of changing its identity, as it is partially communication, which is able to
change it either positively or negatively (Madhavaram, Badrinarayanan & McDonald, 2017).
The author also outlines the necessity of building a strong brand system and brand portfolio.
The portfolio of the brand, in its turn, should be clear and consistent with the possibility of
future brand leveraging, brand extension still being focused on the integrity of the brand
(Dacin & Smith, 1994).
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Fig. 1. Brand Equity Model (Aaker, 1991)
The author enhances the point about tracking the brand equity, which includes the
following elements: brand awareness, perceived quality, brand loyalty, and brand
associations and other corporate assets such as patents, trademarks, distribution channels, etc
(Aaker, 1991). Brand equity, or brand assets, is usually understood as the cost of capital that
brings added value (Faircloth, Capella & Alford, 2001). It is an assessment of the product’s
reputation, as is reflected in how consumers perceive the difference between the product and
its superiority over others, leading to an increase in the volume of purchases (Avis, 2009). In
other words, brand equity is the added value that becomes a product, associating with a
particular brand name. According to Aaker (1991), brand equity is a collection of assets and
liabilities associated with the brand, its name and symbol, which builds or weakens the value
provided by the product or service of the company and or its customers. Brand equity also
13
implies consumer’s perception of a brand and organization; namely, it should be trusted,
admired and credible (Aaker, 1991).
However, there are other definitions and indicators of brand equity as the brand equity
also depends on the other factors as brand personality, brand potential, competitive
sustainability, and brand dynamics. For example, for Kotler and Keller (2009), brand equity
is a link between investments in marketing and customer's knowledge of a brand. Farjam and
Hongyi (2015) mention three perspectives of the brand equity: financial, customer and
employee that were also distinguished by other authors. In this case brand equity stands for
the customers’ responses to the experiences with a certain brand, to the marketing activities
that a company exercises concerning the brand. Interestingly, for Keller (1993), a customer
should be in a situation that emerges the positive feelings towards the brand, and thus, the
model includes brand imaginery, feelings, performances, etc. The brand equity model reflects
the relationship between the customer and the brand, starting from brand awareness stage, the
ability to recognize the brand that refers to brand salience, to the brand loyalty, or the
resonance stage, where the customer gets attached to the brand.
Besides, researchers and companies (Aaker, 1995) use the “brand essence”
collocation, or “the DNA of the brand”, which is the idea, the germ, as well as frames and
borders, allowing the brand to develop. As the main characteristic of the goods of the brand,
the essence is that the buyer notes with the act of consumption of the goods. This is a key
component. In addition, the term can be regarded as a key promise of the brand that is usually
transmitted into words, the most important thing in the brand identity. The essence of the
brand is the core of the basic elements which cannot be changed and which influences its
authenticity (Newman & Dhar, 2014).
In the B2C market, brand that evokes emotions of the customer is the only way to
achieve sound and sustainable differentiation (Chouthoy & Kazi, 2016). If the brand is
focused on the consumer’s emotions, their trust and the margins of the company will be
higher. The latter would support them in all the circumstances because of the emotional
attachment (Chouthoy & Kazi, 2016). Today in the conditions of fierce competition of the
brands, it is difficult to hold the leadership position achieved by introducing various
innovations. When the company loses competitive advantages in terms of innovations, the
emotional attachement is the only element that holds the consumers to the brand. Therefore,
it is vital to maintain the emotional aspect of the brand that requires consistency of numerous
contacts with customers.
14
To create and maintain an emotional brand is difficult as it is very difficult to break
through the information noise and create a positive image of their brand in the consumer
mind. To be attractive, brands must convey the quintessential essence during each
communication process with a customer (Faircloth, Capella & Alford, 2001). This
communication may be in store, on the media, on the brand page in social networks, or when
the consumer uses the product itself (Parrott, Danbury & Kanthavanich, 2015). This is
especially important in the fragmented world of social media. Brands should express its
essence with clarity, gradually increasing it over time, in media and geographically, to finally
form the vision in mind of the consumer. Small organizations are trying to achieve such
consistency due to the so-called brand custodians, keeping in mind the full picture of the
brand and blocking anything that could violate the consistency of its use Berthon, Hulbert
and Pitt (2001). However, as the organization grows, the number of decisions increases and
brand custodians are becoming a bottleneck that hampers development. For larger
organizations, the brand should be conveyed through the entire company, so that everyone
can act in accordance with it.
Therefore, brand equity and brand essence include several elements, emphasizing the
necessity of the following: the main emotional brand promise that can be an advertising
slogan; facts and symbols which could be easily found by a simple search; brand
personalization and the feelings that the brand evokes in the consumer. There are several
ways to create and maintain these elements. According to Capon, Berthon, Hulbert and Pitt
(2001) in big companies the brand custodianship is the responsibility of the senior
management as they have a complete brand vision. The authors also point out to the
approaching or avoiding behavior of the brand, which leads either to customers’ concerns, or,
contrariwise, trust towards the brand resulting from economic, social or psychological
benefits, e.g. “assurance that the product will continue to deliver functional benefits”
(Berthon, Hulbert & Pitt, 2001) and feelings related to consumption.
Hence, maintaining trust, which is a prerequisite for brand purchase intention and
loyalty, is essential for developmpent of a strong brand that should have a competitive
advantage to be distinguished from a grwoing number of new brands on the market. Brand
trust is an attribute generated by a positive brand image, or, brand characteristics in the
mindset of a consumer. To maintain the superior image, the companies should take into
consideration emerging trends and demands of the society.
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1.2 Social Responsibility and Brand Management
1.2.1 Corporate Social Responsibility and its Dimensions
The main business goal has always been the wealth creation and meeting the interests
of the stakeholders, which can be either destructive or used for social welfare. Previously
corporations followed one of two existing scenarios: staying out of social problems and
focusing on making money or being involved in contributing to solutions of mostly
environmental issues. To date, these major contradictions were “smoothed” by new concepts,
for instance, corporate social responsibility being “a shared value” (Porter & Kramer, 2011).
Social responsibility concept has started its gradual development since 1950s, and
gained momentum at the beginning of 1960s. During this period Bowen (1953) released the
first fundamental work on social responsibility, which stated that the company’s social
responsibility is the implementation of policy and initiatives that would be desirable for the
purposes and values of the society and its well-being. It was pointed out that the concept of
social responsibility could be extended to the business circumstances, making the
organization more than just an economic integrity. The realization of broader social goals in
business decisions can bring social and economic benefits to society (Choutroy, Kazi, 2016).
This statement implied two differnet visions on social responsibility as an act, a contract
between organization, businessman and consumers’ values and as the moral imperative of a
businessman or, organization, which reflects and voices the society values (Bowen, 1953).
The next stage in the 1980s was the emergence of changes in the broader context of
social responsibility (Blagov, 2015). The concepts of “business ethics” and “stakeholders”
have emerged during period, namely referring to ethical behavior towards all the
stakeholders, and social responsibility became a more discussed issue. At the beginning of
the XXI century developed the theory of “sustainable development” and “corporate
citizenship” were developed (Valor, 2005). The concept of “sustainable development” has
entered into the system of the developed countries’ corporate governance after the United
Nations Conference on Environment and Development in Rio de Janeiro, 1992. Some
countries with developing economies, and most developed countries have undertaken
important international obligations concerning business. After that a new management
philosophy has appeared, and it was called “sustainable development” of the company, where
any administrative decision is made taking into account the economic, environmental and
social results.
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Fig.2. Defining Corporate Social Responsibility (UNIDO, 2007)
According to the principles of the United Nations Global Compact (2000), which is
the largest initiative in the world of corporate sustainability, corporate social responsibility
both internal and external dimensions can be divided into several categories: human rights,
labour, environment and anti-corruption. Internal dimensions include stable, decent wages; a
guarantee of social and medical insurance for employees; additional training opportunities,
skills development; financial assistance in case of emergency. According to the external
dimensions, the companies could be distinguished by the level of contribution they make,
namely, social investment and philanthropy; concern for the environment; the level of
companys responsibility for the consumers; interaction with the authorities and local
communities. Companies that are focused on these dimensions refer to the companies with a
global vision (United Nations Global Compact, 2000). Today, in most of developed countries
of North America and Europe, social responsibility as a sustainability management system
has become a key business ideology and the basis of social partnership with the authorities at
all levels, as well as civil society.
In 2007, Triple Bottom Line (TBL) approach, first introduced in 1994 by Elkington,
was used by UNIDO as a tool to put corporate social responsibility concept further (UNIDO,
2007). This approach served as a basis for UNIDO CSR Programme (2007), where the
17
central instrument for embedding CSR practices into business was Responsible Entrepreneurs
Achievement Programme (2007). Triple Bottom Line approach implies findind a balance
between economic, environmental and social aspects with meeting both shareholders’ and
stakeholders’ expectations (UNIDO, 2007). Therefore, the definition of corporate social
responsibility offered by UNIDO is the following: “Corporate Social Responsibility is a
management concept whereby companies integrate social and environmental concerns in
their business operations and intentions with their stakeholders” (UNIDO, 2007).
Davis (1975) first considered the issue of social responsibility in the administrative
context. He argued that the company’s actions, even slightly beyond the direct economic
interest, are related to social responsibility. At the same time socially responsible business
practices can contribute to long-term economic effects. The concept of corporate social
responsibility was based on five key points: social responsibility arises from public
authorities; authorities should create conditions and set a social responsibility pattern as a
two-way open system, taking into account the influence of society, market signals and being
open to the public; social costs must be carefully evaluated and reviewed from the point of
view of the lawfulness; social costs are allocated for each product, service, activity and are
passed on to the consumer; business institutions are involved in certain social problems.
Davis and Blomstrom (1975) determined the direction of corporate social responsibility as a
duty of decision-makers to take such actions, which are directed not only to meet their own
interests, but also to the protection and enhancement of social wealth.
The concept of social responsibility is used in many areas. However, only when it is
used in a business context, pointing to specific areas of development, it becomes a clear
statement. This allows researchers and specialists to divide the corporate social responsibility
into certain categories. To be more precise, corporate social responsibility is a contribution
made by the organization in the development of social, economic and environmental areas on
a voluntary basis, it is related to the ethical identity of the brand, which is “a concept in
which the corporation is a citizen of a society with rights and responsibilities” (Alwi, Ali &
Ngyen, 2017).
Some types of social responsibility are of a legal nature and reflected in the
legislation, for instance, providing quality services and products to consumers; creation of
legitimate jobs; the official issuance of wages; financial investment in staff development;
strict compliance with tax, labor, environmental and other laws; litigation with regard to
ethical and social expectations and contribution to the society through the implementation of
social programs and projects, both individually and within collaboration with other
18
organizations. According to Caroll (1979), CSR is the set of “economic, legal, ethical and
philanthropic expectations that society may have towards the company”. Corporate social
responsibility dimensions were also described by Bhattacharaya and Sen (2004) who claim
that CSR implies following the principles of ethics and envinronmental values along with
pursuing commercial objectives. Barnes (2011) also distinguished several CSR dimensions
similar to the ones of the previous authors. Thus, he outlines that there are internal
employment, ethics, economics and legal components that affect the brand trust of the
consumer.
To conclude on the CSR dimensions, it is necessary to outline that there is no clear
unanimity about the concrete dimensions. All of them, however, are based on the principle of
company’s responsibility to embed social, economic and legal aspects and the company’s
commitments, namely, social and environmental issues as well as the issue of governance
(Freeman, 1984). Ammar, Naoui and Zaiem (2015) refer, however, to four most common
dimesions mentioned in the literature, which are the following: environmental (activities
consistent with the company’s interests undertaken to protect the environment); economic
(the company’s core responsibilities and following the society needs); social (the
accountability to consumers, employees, society and stakeholders); philantropic (material and
non-material contributions to the community welfare).
1.2.2 Socially Responsible Brand
In the recent decades, there has been a continious increase in cause sponsorship and
corporate social responsibility initiatives. More companies tend to choose, for instance,
donations or other forms of social investments as a part of their strategy. This explains the
trend of applying cause-marketing practices in the companies that witnessed the consumers’
response on their marketing message including a cause. Corporate social responsibility is
usually attributed to a corporate brand meaning (Villagra & Lopez, 2012). A brand that can
address the emerging trends and demand of the society and, hence, consumers, gains an
advantage in competitive circumstances. Thus, Edelman study (2012) has demonstrated that
in the conditions of the products’ quality and price equality, social orientation of the brand
has significantly impacted on the consumer’s buying behavior. Greene (2012) has stated that
the purpose relevance in the global consumers’ motivations has shifted upwards to 26
percent, which could mean a step towards the stronger brand affinity. Contrariwise, there is
also a phenomenon of corporate social irresponsibility, (Nasab & Abikari, 2016), which
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evokes negative emotions of a consumer and leads to brand distrust or brand switching. This
can refer to ethical violations, for instance, disrespectful attitude towards employees.
It became obvious that the trend of social responsibility initiatives becomes the norm
for most global companies, such as Apple, Google, Microsoft and many other companies that
have demonstrated their social responsibility to the society (Smith, 2012). However, there are
different companies and different understanding of social responsibility. There are many
concepts that characterize social responsibility of business in forms of charity, philanthropy,
social-marketing programs, sponsorship, etc. Despite the fact that each concept has its own
characteristics, it can be generalized that all these concepts are reduced to one, namely, to
assist those in need or to solve a global problem that humanity faces. Today, the social and
marketing activities are not only aimed at solving social problems, but also to obtain
economic benefit, expressed in increasing sales, increasing customer trust, strengthening the
company’s position in the market (Zhang & Hanks, 2016).
Authors on social responsibility and sustainalbility literature (Du & Sen, 2015)
traditionally distinguish five steps in the development of social-marketing strategy of any
organization to build competitive advantage: charity, which is expressed in support of the
one-time, unsystematic appeals of citizens and civil society organizations, unfortunately,
social activity usually stops on this without affecting the development of the enterprise and
society; sponsorship of socially significant events and projects as both an access to the
organization’s target audience and a tool of socially responsible marketing (Elving, 2010).
The following step is to define a clear focus on the priorities of the company’s social activity,
which is part of the company’s image, creating additional intangible assets of trust and
preference, for instance, the development of charity policy of the company inscribed in its
strategy. The final step, according to authors (Du & Sen, 2015), is building a corporate
charity policy that solves social problems of employees and corporate enterprise objectives.
Socio-marketing projects can be an effective means of promoting brands and at the
same time a tool for solving social problems: strengthening company’s reputation and image;
strengthening relationships with customers; increase customer loyalty and employees;
increasing the investment attractiveness of the company (Du & Sen, 2015). Therefore, the
social and marketing activity is a symbiosis of charity, sponsorship and PR, appealing to the
public good. Today, company’s success can be measured according to the extent it
contributes to the societal well-being, whereas earlier it used to refer to financial performance
of the company. According to Saunders (2006), the consumers are more prone to advice a
brand that tends to contribute to social problems resolution, and are more likely to buy these
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brands even if they are more expensive than the ones that are not concerned with social
issues. This provides company with a possibility to reduce its liabilities and insurance costs
and to strengthen a brand image. Consumers perceive the brand according to the brand
performance and brand equity that was discussed above. Brand equity implies consumers’
perception of a company above those that are refer to the product quality (Aaker, 1991).
Brand performance implies the contribution of the brand towards the business performance.
Previous research demonstrated that corporate social responsibility has a positive
effect on brand loyalty. Brand loyalty, according to Armstrong (2008), is defined as the
purchasing patterns of a consumer. These patterns repeat towards a particular brand that
consumer usually purchases. Brand loyalty also includes consumer’s recommendation and
promotion of the brand to others. Brand loyalty can be classified: the hardcore consumers
who purchase only one brand; the softcore buying a small number certain brands; and the
switchers who are not attached to any brand. Kotler (2008) states that CSR policy of the
company transforms the “softcore” and “switchers” to the “hardcore” consumers category.
He outlines that a company should definetely take social responsibility into consideration to
the extent it can do it. However, when implementing corporate social responsibility into
brand’s strategy, proper CSR communication should be considered in order to avoid creating
consumer skepticism towards a brand (Elving, 2010).
Fig. 3. The Impact of CSR on Consumer Loyalty (Raman, Lin & Nail, 2012)
Raman, Lin and Nail (2012) in their research have proved that there is a strong
correlation between consumer loyalty and CSR, namely, the more CSR initiatives are
21
companies taking, the stronger is the loyalty. The research was conducted on the bases of a
survey on a Malasian electronic company. However, the authors confirm that there could be
further investigations for better understanding the interdependency of social orientation of the
company and brand loyalty. The authors mention that brand loyalty is related to consumercompany identification, which can be distinguished and measured in the following
categories: extent to which a consumer is willing to support an organization; the consumer’s
affiliation level towards a particular company and similarity of the other consumers’ patterns
in terms of attitudes to the company.
However, looking at the brand equity mentioned previously, brand trust is a
prerequisite for brand loyalty and brand commitment. Chouthoy and Kazi (2016) outline the
essential role of CSR being binded to the business model of the organization and having an
important impact on the brand trust that lies in the brand commitment as the customers tend
to follow their buying patterns towards the products that they trust. In their view, CSR
implies “a corporation’s or brand’s assurance to make the most of long term economic,
societal, and environmental welfare through business practices, policies, and resources”.
Brand trust, in its turn, is the guarantee that the brand pursues positive functions to the
customer and that the latter will demonstrate the higher level of brand commitment. In their
study the authors also include the important point concerning the organizatonal models,
namely, adaptable and non-adaptable, to incorporate a specific brand with CSR practices, e.g.
mission-driven model meaning that social responsibility is in the heart of the business idea,
which leads to the existance of “social entreprises” or communication team model implying
the CSR is a responsibility of the communications team (Choutroy & Kazi, 2016).
Considering organizations in the luxury industry, it can be concluded that these companies
mostly refer to adaptable models as they are mostly focused on creating wealth. However, as
it will be discussed later today almost all the companies follow the CSR integration policies.
Ammar, Naoui & Zaiem (2015) in the study on the influence of the CSR perceptions
and brand trust support the idea that social responsibility practices enhance the image of the
company and consumer trust, “which is meant to secure competitive positions on the market
and the development of lasting relationships between various stakeholders”. They outline that
the companies respect for the environment, consumers, workers and regular philantrophic
activities have a positive impact on the brand trust playing a moderating role. The study was
conducted in the relation to the food industry as one of the ost sensitive in terms of CSR. The
authors used Gurviez and Korchia (2002) scale to measure the brand trust with several
dimensions, however, the sample was divided into groups of individuals who, assumingly,
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were most involved in the support of the company’s activities and least involved reciprocally.
The study demonstrated that the mentioned dimensions do play the enhancing role in
consumer confidence towards the brand.
Fig. 4. The Influence of the Pereptions of CSR on Trust toward the Brand
(Ammar, Naoui & Zaiem, 2015)
Other investigations on social responsibility and brand trust role demonstrated the
similar results supporting the assumption that CSR enhancced the trust and affinity of the
consumers towards the brand, being “an integral component of brand identity” (Brusseau,
Chiagouris & Fernandez Brusseau, 2013) in case the initiatives are authentically built. An
interesting point mentioned by the authors is that while consumers of the brand tolerate social
component, the majority of them is “less willing to tolerate, however, the sense that the
reason for the social action is the profit or, stronger, that the social cause is being exploited
for profit” (2013). That lets the author of the current study assume that in relation to luxury
industry this prejudice does not refer to luxury industry, as luxury companies perceive the
business they do more as an art than profit oriented, which is known by the consumers.
Hence, the motive of the CSR activities of a luxury company should be clear and considered
as authentic and non-conformist, being a result of “broadening the spectrum” of CSR
dimensions and the meaning of what business could give to society (Brusseau, Chiagouris &
Fernandez Brusseau, 2013).
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1.3 Luxury Brand and Social Responsibility
1.3.1 Luxury Brand Definition
There are several approaches towards the definition of luxury and luxury brands used
in scientific research. According to Andreeva, the author of “Marketing of luxury: Modern
strategies”, (2010), “luxury”, which is usually taken as a synonym of “wealth”, has, however,
nothing in common with the latter. Luxury is “a certain form of a game with consumer,
where both manufacturer and consumer win” (Andreeva, 2010). This definition is an example
of a specific understanding of what luxury is. It describes the core idea of the industry, which
was also emphasized by famous creators, whose names are associated with luxury: “Some
people think luxury is the opposite of poverty. It is not. It is the opposite of vulgarity”
(Chanel, fashion designer); “For our customers the ultimate luxury is defined by exclusivity
and customisation” (Giorgio Armani, head and founder of the Armani Group).
Several studies have considered luxury as a brand property and introduce a vague
term of a “dream value” (Dubois & Paternault, 1995): “It seems particularly difficult to
explain and predict the conditions under which “dreams” of luxury emerge and how such
dreams materialize into purchase acts”. The result of the research demonstrated the
relationship between awareness and luxury brand purchase, as well as the relationship
between awareness and a consumer’s “dream” as the authors call it (Dubois & Paternault,
1995). Nevertheless, the correlation between “dream” and “purchase” was not proven.
Instead, the authors derived the following “dream formula”:
DREAM = 0.58*AWARENESS - 0.59*PURCHASE - 8,6
The “dream formula” demonstrates that awareness is a main attribute for a luxury
consumer. Whereas it creates a “dream” for a luxury consumer, the purchase destroys it. This
accurately describes marketing and branding paradox in luxury industry. While for most of
the goods of various categories, the main objective is a demand increase, for luxury industry
the most challenging task is the creation and development of proper brand image that should
emphasize its exclusivity and value (Dubois & Paternault, 1995). Luxury brands imply a
specific identity and a unique vision and standards, “translating their vision into symbolic
characteristics and thereby creating the greater part of their product benefits” (Kapferer,
2001). Therefore, this vision should be stable; it cannot constantly change and be
significantly adapted it to new trends and short-term consumer expectations.
Kapferer (1998) argues that market of mass and luxury brands has a pyramid
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structure, at the top of which are products called griffe, a «materialised perfection», implying
unique work pieces. Followed by the luxury brand category, however, griffe products are
made in a limited number of units according to specific traditions, serving as the guarantee of
the highest quality. The third level refers to the upper-range brand, more rationalised luxury
brand versions that are available to a broader target audience. This stage is where the
industrialisation process starts, when the brand names allow generating the added value for
high-quality products. Therefore, luxury management is based on the system of the
interaction between these levels. Interestingly, the third level of the upper-ranged brand is the
basis for generating profits, which allows investing into the griffe creation to maintain the
aura of uniqueness and creativity (Kapferer, 1998). The key point in luxury brandmanagement is to prevent the product from shifting to the lowest level of mass brand.
Availability is the feature that weakens the whole idea of a luxury brand, and massproduced luxury is a contradiction to it as otherwise the main work of luxury industry would
be not to produce luxurious goods, but “to decrease costs while pretending that quality
remains as high as ever” (Hutzler, 2011). For this reason, the industry hinges on “a fragile
paradox” (Andreeva, 2010). Once the industry is following the path of democratization,
turning luxury goods into commodities anyone can posess, it loses its identity, and thereby
impers its economic viability; thus, the reason luxury is immune to market fluctuations is its
value that is by definition timeless and transcendent (Hutzler, 2011).
According to Bruno and Castelli (2013), “for the consumer, continued excellence over
time allows the brand to acquire a strong reputation and maintain a first class position. To
achieve luxury status, brands need to have a strong, legitimate and identifiable aura”. Luxury
goods companies “must create and maintain desirability” (Bruno, Castelli, 2013), one feature
of which is “a strong aesthetic appeal that is modern but related to traditional values; another
feature is high price, which strengthens the product’s social status, the product’s rarity and
uniqueness” (Bruno & Castelli, 2013).
Groth and McDaniel (1993) describe the basis for the development and maintenance
of a luxury brand image and argue that it is positioning and prestige pricing that reinforce a
positive and exclusive brand image. In this sense the exclusivity implies brand positioning
and requires a special price that is higher than the one for analogical items. The possibility of
such positioning is determined by the exlusive value principle (Groth & McDaniel, 1993). In
its turn, the exclusive value is a difference between the market value and pure utilitarian
value. For a consumer, luxury item market value is based on pure utilitarian value and
exclusive value premium, and for the producer sales price should be higher than
25
manufacturing and marketing costs, therefore, in this case, is constitued from product related
costs (production and marketing) and, again, exclusive value premium (Groth & McDaniel,
1993).
Aaker (2004) outlines that it is brand architecture that sometimes allows the brands to
function as an entity. The brand architecture is especially important when it comes to the
complication of the brand functioning conditions, for instance, the increasing number of
product offerings, development and complication of the distribution channels, emergence of
new competition types. Therefore, according to Aaker (2004), structured brand architecture is
the foundation for brand management strategy development. Aaker provides an example of
Ralph Lauren as one of the most successful historical examples of brand architecture that
managed to cover different distribution channels, customer segments and product categories
with the help of certain brands connected by the names, subbrands and supporting brands.
Fig. 5. Framework of Luxury Brand (Vingeron & Johnson, 2004)
A large-scale luxury brands analysis was conducted by Vingeron and Johson (2004).
The objective of the study was to formulate the model of a luxury consumer brand
perception, to specify the characteristics of a luxury brand and to found a system for luxury
brand measurement by the Brand Luxury Index development (BLI). The framework of a
luxury consumer perception of a luxury brand consists of personal and non-personal levels as
it is presented on Fig.5. Such characteristics as conspicuousness, uniqueness and quality refer
to non-personal perception, whereas hedonic and extended self-influence the specifics of of
personal perceptions.
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As the premise for the Brand Luxury Index development, the authors (Vingeron &
Johnson, 2004) used several ideas: every market implies existence of two brand types, luxury
and non-luxury, and luxury market is not homogenous. Consumer’s perception influences the
brand’s positioning in the case when the brand can take the highest place in one product
category, being at the bottom of consumer ratings in another one. For instance, Cartier
jewelry is perceived as a high-end luxury by the consumers, meanwhile the brand’s perfumes
do not have such an image in the consumer’s mind. On fashion market, Giorgio Armani is
considered to be an unmatched luxury, however, Emporio Armani is more demanded due to
the lower prices. The question that arises is how to measure the level of “luxuriousness” of
the brand.
Vingeron and Johnson (2004) applied five core characteristics of luxury brand,
conspicuousness, and uniqueness, quality, hedonic and extended-self, to the process of Brand
Luxury Index development demonstrated in Fig. 5. The researchers investigated consumer’s
charactersitics perception by interviews with luxury consumers and further content analysis.
As the result, Vingeron and Johnson (2004) offered Brand Luxury Index as a tool for
measuring the extent to which consumers perceive a brand as a luxury. The Brand Luxury
Index allows to get the comparative quantitative indicators for estimating the level of the
brand «luxuriousness» in different product categories and geographical markets. Therefore,
this instrument can help to identify special segments, or clusters, in consumer's perception of
a luxury market. Considering luxury brand image, the scale offered by the authors allows to
define luxury category that consumer associates a brand with, and the way this perception
relates to brand’s positioning. Moreover, it can define the characteristics that need either to
be strengthened or changed depending on the competitors’ positioning on the market.
Another authentic framework on luxury brands was offered by Michael Beverland
(2004) who distinguished six components of a luxury brand. In contrast to other frameworks,
the Beverland's contributes to understanding the process of a luxury brand creation,
development and maintenance throughout time. The key elements of the framework are
product integrity, value driven emergence, culture, history, marketing and endorsement.
These elements as it is demontrsated in Fig. 6 positively influence luxury brand image and
tend to enhance the consumer’s affiliation towards the brand. Here, the most interesting and
valuable to notice dimension is value driven emergence of the brand which can either create
of destroy positive brand image (Beverland, 2004). This also refers to corporate social
responsibility as an influencial component of value driven emergence as it is straightly
related to brand values.
27
Fig. 6. Model of a Luxury Brand (Beverland, 2004)
•
Integrity implies a set of characteristics connected with luxury goods production.
These include quality, high attention to details, reliability and integrity of the brand.
•
Value Driven Emergence is the synonym of a producer’s philosophy and methods of
leading business that should enhance brand reputation and brand image.
•
Culture/History allows the usage of historical and cultural facts and material evidence
in practice is a necessary condition for companies-producers of luxury brands.
Approaches towards the historical heritage can be different. The author outlines story
telling and policy. All the historical facts transform into a certain culture, which is
inherited within generations.
•
Marketing/Endorsement are the part of a corporate culture. Having analysed the
market of elite wines, Beverland argues that luxury goods producers do not use the
marketing strategies to manipulate consumers’ needs by intriducing the intrucive
advertisements, etc. Hence, consumers should themselves decide on what they want
and the reasons for that. Therefore, instead of using the word “marketing”, luxury
producers tend to use the definition of “endorsement” in the sense of “support”
without intrusive influence on consumers minds in favour of the act of purchasing
(Beverland, 2004).
28
Concerning the core characteristics of a luxury brand, the main features are similar to
the ones outlined for luxury in general. However, a brand should not be associated only with
a high quality or excellent design. A luxury brand is like a person with its own history and
heritage. The latter implies the craftsmanship that comes from the brand founders (Louis
Vuitton), following the manufacturing traditions and appreciation of the manual labor (haute
couture clothes, high-end jewelry). Besides, the uniqueness of a luxury brand is reached by
special production limitations and marketing. The limited number of goods creates the brand
exclusivity and consumers’ “waiting lists”. In its turn, marketing through the selective
distribution and premium pricing, supports the brand positioning based on the combination of
emotional attractiveness and the idea of a luxury product perfection (Beverland, 2004).
Nueno and Quelch (1998), however, outline that besides of these features, a luxury
brand should have a global reputation; brand presence should take place on the key
geographical markets. Pesented everywhere, a luxury brand should also be assossiated with
the country of origin and with the brand creator’s personality, his values as well as both
personal and professional qualities.
One of the most important characteristics that the authors mention implies that a
brand should always be “in tune with the times” and the ability of the brand to stay modern.
Brands, including luxury ones, should provide effective communicattion of its value to the
consumer, stating its benefits and connecting with consumers at the emotional level. It is
usually reached through a story told by advertising campaigns (Nueno & Quelch, 1998). “The
most iconic of brands over time, mastered the art of really digging into the “soul” of a brand.
How it was differentiated from others and how it should be expressed in all parts of the
world” (Armano, 2016).
Armano points out that modern brands should master the relationship between three
key facets for how brands sustain their relationship with consumers after answering what the
brand stands for:
•
Strategy presenting the balance between business, brand and consumer objectives.
•
Creativity, which is becoming more complicated nowadays. Exceptionally compelling
stories and experiences motivate people to make a purchase.
•
Agility, the most disruptive dynamic out of the three facets as today’s consumers have
ever-evolving values, demographics and technology & lifestyle habits.
29
So, Parsons and Yap (2013) investigate the link between dedicated the corporate
branding, emotional attachment and brand loyalty in luxury industry; namely, empirically
tests a theoretical framework that grasps the influence of corporate branding factors on
customer emotional attachment and, hence, brand loyalty reciprocally. The authors (So,
Parsons & Yap, 2013) confirmed that emotional attachment based on corporate values and
associations seems to be the most important factor for the customers of luxury good and
provide the example of the way the research could be conducted and what flaws that could
lead to the shortcomings might emerge.
The authors (So, Parsons & Yap, 2013) claim that to maintain a strong brand and to
remain competitive, a luxury firm should consider several factors or characteristics that, from
the customer’s perspective, deliver multi-faced benefits, for instance, social status, sense of
belonging, etc. These factors include innovation, product craftsmanship, recognizable and
exclusive style, premium pricing.
Today’s luxury customers are placing more emphasis on the emotional value that
affects making the purchase decisions (Bain & Co., 2005; Choo et al., 2012). Therefore, as
the luxury market steadily grows and wealthy customers become less loyal, most luxury
firms are shifting from focusing on merely “building social status” towards “customers
emotional attachment” cultivating brand loyalty. To bolster corporate reputation that
contributes to cultivating the emotional attachment and building customer loyalty, corporate
branding strategy has always been used as the long-standing business practice.
The study (Soo, Parsons & Yap, 2013) addresses the relationship gap between the
concepts of customer emotional attachment, brand loyalty and corporate branding by putting
forward the conceptual framework that captures the corporate branding attributes on
customer emotional attachment and brand loyalty. The customer’s emotional attachment is
determined by brand liking, brand affection, and brand connection, as they seem to make the
customer to be committed to a brand and stay in a long-term relationship with it.
The Fig. 7. describes the conceptual framework that was validated in the study. It
depicts several dimensions that are hypothesized to impact the customer brand loyalty
through cultivating their emotional attachment. The examples of the hypotheses drawn by the
authors imply the relationship between customers perception of corporate associations and
their emotional attachment as well as brand loyalty.
30
Fig. 7. Dimensions that are hypothesized to impact the customer brand loyalty through
cultivating their emotional attachment. (So, Parsons & Yap, 2013)
The method used to test the hypotheses of the framework was structural equation
modelling which will be used by the author of the current research. The study was focused on
luxury handbags as the primary driver of brand sales for the luxury firm and, moreover, a
handbag is a product that entails both functional and symbolical values (So, Parsons & Yap,
2013). The measurement was first validated through a confirmatory factor analysis before
estimating the model. The results of the study showed that corporate branding does not
enhance the emotional attachment level of the consumer. Contrariwise, the findings did show
that the customers’ emotional attachment has a positive impact on brand loyalty. Among the
dimensions of corporate branding, only corporate associations, functional benefits, and
symbolical benefits were described as effective in driving emotional attachment of a luxury
consumer. However, the authors did not investigate the influence of emotional attachment on
brand trust, which can be seen as an incentive for further research.
Although luxury brand features were defined and categorized by several authors, there
was no empirical confirmation of their importance and realization in practice. The author,
however, believes that the empirical justification is needed. If such features as quality,
heritage, and unique design are clear to understand, the ability of a luxury brand to stay in
“tunes with the times”, which includes the introduction of corporate social responsibility,
31
seems to be vague. Today brands need to respond to global challenges and adjust in order to
answer rapidly changing consumer demand and preferences that evolve due to influences
from various sources over time. Nevertheless, the more things develop and change, the more
they need to stay the same in terms of core value, and development of a balance between
control and change is important. In the context of luxury brands maintenance, this is the idea,
which is essential to be justified and supported, including the consideration of corporate
social responsibility embedded into the luxury brand’s strategy.
1.3.2 Corporate Social Responsibility in a Luxury Industry
Although luxury companies are not perceived as socially responsible and have been
criticized for their recent attempts to introduce several initiatives, more luxury companies
started to look in this direction. 2015 has moved luxury industry towards thinking about
sustainable development, social responsibility as the answer for communities demand for
business models that imply this. The report “Predictions for the luxury industry” (2016) states
that millennials are seeking for working positions in the companies with socially responsible
practices that could contribute to a society well-being. Besides, this generation is more likely
to vote for the companies with such practices and, hence, assumingly, they would purchase
the brands from such companies. The report states that: “All these changes have left luxury
companies with no option but to improve as the potential for sales and stocks to plummet
increases, and the hand of the law hangs over them” (2016).
According to the mentioned studies, brand trust and brand awareness enhance
consumers purchase intentions. It is possible when the brand efficiently uses its strategies
towards targeted consumers (Malik, Ghafoor & Iqbal, 2013). However, the previous studies
refered to a non-luxury sector of economy. However, there is a limited number of studies
concerning luxury goods and CSR influence on such dimensions as brand trust, brand loyalty
and consumer purchase intentions. By examining the differences between the consumer
credibility and attitude towards the CSR performing and nonperforming luxury companies
Jin, Park and Yoo (2017) defined that not engaging in CSR may negatively influence the
consumer response towards the luxury brand. However, having focused mainly on donations
and volunteering activities as one of the CSR practices, they didn’t examine the full range of
the CSR dimensions which could potentially influence the brand trust. Moreover, product and
consumer characteristics were also limited excluding the possible differences resulting from
cultures and social status.
32
Supporting the statement of Brusseau, Chiagouris, Fernandez Brusseau (2013)
mentioned previously, Ahn (2015) points out to “consistent activities based on public
relations and authenticity through corporate social responsibility” as “critical factors for
companies’ brand reputations and their long-term growth”. The author provides several
examples of successful CSR activities of luxury brands, including the campaigns, to
demonstrate the contribution that they do to the social responsibility issues. For instance,
such brands as Gucci and Bulgari contributed to these matters by launching the Green Carpet
Challenge bags to prevent deforestation and Save the Children Rings to protect the children
rights reciprocally (Ahn, 2015). The list of the examples can be extended. For instance,
having launched Sustainability Commitment policy, Tiffany & Co is the leader of sustainable
mining, processing crafting and environmentally sound practices. In 2002 the company has
launced its Coral Conservation program to protect the health of the oceans. The company
believes that besides of admiring the beauty and the quality of the “engagement ring”, the
customers should be assured that “it was sourced ethically and the diamonds were mined
responsibly” to be proud to own and to wear a diamond (Tiffany & Co, 2017).
Ahn (2013) also considers the issue of authenticity in the eyes of the consumer and
alleges to the consumers’ skeptisism towards the CSR activities of the brands. Interestingly,
the conclusion drawn in the study concerned the pricing strategies of luxury brands, namely,
the lower-priced luxury product had certain positive spillover effects. Another remarkable
conclusion drawn by the author is that CSR activities may draw more attention the consumers
who demonstrate less interest towards the luxury brands.
Products of luxury brands are closely connected with fashion industry, which is
highly focused today on the sustainability issues. Thus, recently, a Russian entrepreneur
Miroslava Duma has launched a new project called Fashion Tech Lab to encourage socially
responsible investments and introducing new technologies withing the fashion industry.
Fashiion Tech Lab is aimed to assist in the procecesses of fashion production and
development for global luxury players as LVMH and Kering (Young & Hoang, 2017).
Thus, corporate social responsibilty can represent an added value for the customers of
luxury goods, potentially enhancing their positive perception towards the brand built on the
credible brand image, which is the consumer perception of the brand. Taking into
consideration that luxury brand image coincides with a luxury corporation image; the main
function of a luxury company before such issues as consumer loyalty is to gain brand trust of
its consumers through its success, quality of goods, innovativeness and the most important –
sensitivity to the consumer’s values and social issues.
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1.3.3 Research Question and Conceptual Model
The previous studies on the corporate social responsibility and brand trust
demonstrated that ignoring corporate social responsibility is unfavorable. However,
according to the analysis of the existing studies on luxury brands and corporate social
responsibilty, it is discovered that brand trust is usually considered in the context of brand
loyalty instead of being analyzed as a separate construct being influenced by a number of
factors. Taking into consideration the research gap implying that no research was previously
conducted on the issues of CSR effects on luxury brand trust which is the demonstration of
commitment and satisfaction of the consumer (Afzal, Khan, Rehman, Ali & Wajahat, 2010),
the research question that emerge in the study is the following: Do socially responsible
practices of luxury companies impact consumer's trust towards a luxury brand?
The investigation of these issue will answer the question about the possible effects of
the corporate social responsibility on a luxury brand trust represent a value not only for
luxury companies’ management but also for the companies that are willing to introduce social
responsibility practices into the company’s strategy. The organizations could understand
whether it is a social responsibility and its aspects that make customer feel confindent in
brand or this attitude does not depend on the company’s CSR actions.
Brand trust, described by O’Shaughessy (1992) as an eagerness to act ignoring costs
and benefits without rationality, always underlies brand loyalty, the repurchase of the brand.
Hence, brand trust should be considered when a company wants the consumer to get attached
to its brand. Importantly, as it was mentioned, brand trust consists of several components that
are potentially influenced by corporate social responsibility practices through the concrete
mediators, namely, it is assumed that being influenced by corporate social responsibility
practices of the company, these components are constructed from positive brand image, its
positive perception. Brand trust was also defined from the sociological perspective. Thus,
Zucker (1985) outlines the following: “From a sociological perspective, trust is defined as a
set if expectations shared by all those who involved in an exchange”.
Besides, trust is an important attribute when considering the issue of consumer
skepticism towards corporate social responsibility messages that the companies are using as a
marketing tool, which significantly decreases the potential benefits from CSR initiatives
driven by a brand and can cause negative associations (Zhang & Hanks, 2016). In relation to
consumer skepticism issue, Elving (2010) outlined that despite the fact that corporate social
responsibility can have a positive influence on company’s reputation as well as consumers’
34
attitude towards a brand and consumers’ purchase intentions, it is essential to demonstrate to
stakeholders that the motives of a company are not based on self-interest. Brand trust, in its
turn, is the indicator of an attitude towards the brand, and it is practically important to
discover whether skepticism applies in case of luxury brands.
The proposed antecedents that influence luxury brand trust are based on the studies of
Lau and Lee (1999) and Anik (2014), where the main factors influencing brand loyalty
through the brand trust were defined. The authors introduce sets of characteristics affecting
consumer’s trust in brand, namely, brand characteristics, company characteristics and
characteristics referring to consumer-brand relation. The authors include brand reputation,
predictability and competence to the first set of the mentioned features meanwile brand
experience; brand support and similarity between consumer self-concept are referred to the
consumer-brand characteristics. The conceptual model is also includes consumer
consciousness component which potentially enhances consumer perception towards
cosrporate social responsibility practices of the brand. Conceptual model of the study with
the hypotheses is provided on Fig. 9. It demonstrates main relations between the constructs.
Brand Image
H1
Reputation
Corporate
Social
Responsibility
(CSR)
H2
Predictability
Luxury
Brand Trust
H3
Competence
H4
Consumer
Consciousness
Fig. 8. Conceptual Model “The Effects of Corporate Social Responsibility on
Luxury Brand Trust”
35
Hypothesis 1: Corporate social responsibility positively affects luxury brand trust
through its effect on luxury brand reputation.
Playing an important role of brand trust antecedents, brand characteristics such as
reputation, predictability and competence are essential for building the positive brand image
and a relationship with a consumer. Reputation is the characteristic which primarly indicates
the extent of reliability and reputation of the brand. If a consumer subconsiously feels that the
brand is worth to rely on, it leads to positive expectations towards the brand. In its turn,
reputation implies such as integrity and honesty (Afzal et al., 2010). This especially refers to
companies that embed corporate social responsibility into its strategy, as people tend not to
believe in the ability and willingness of business in doing good to the society, also known as
consumer skepticism towards corporate social responsibility (Zhang & Hanks, 2016).
However, when talking about luxury companies, potential buyers could have in good
itentions under these actions of the brand. Besides, positive reputation means that a consumer
considers the brand as worthy of praise and is ready to recommend this brand to other people.
Hypothesis 2: Corporate social responsibility positively affects luxury brand trust
through its effect on luxury brand predictability.
Brand should satisfy consumer needs and promise expected quality of the product or
service. As luxury industry players are perceived to have the best product quality, corporate
social responsibility assumingly enhance the positive expectations towards the promise of the
company that a brand will not disappoint consumer either in brand quality or performance.
Being confident in brand’s performance means that consumer can be confident that in the
future the brand will exist further and maintain its positive image. Therefore, certainty in
brand, as Afzal, Khan, Rehman, Ali and Wajahat (2010) pointed out assures the consumer
that “nothing unforeseen can be forecasted”.
Hypothesis 3: Corporate social responsibility positively affects luxury brand trust
through its effect on luxury brand competence.
A brand, which is competent, is the one that has a competence and knowledge in
various areas and satisfies the needs of a consumer. Therefore, a brand should know its
consumers, namely, the problems that they strive to solve and their values. Moreover,
consumers should be persuaded by other party that a brand is competent. For instance,
advisors in a store can be the mediators that provide the consumers with all the necssary
recommendations. In this case they are the brand authorities that speak on behalf of it.
36
These three characteristics of the brand are the basis of positive brand image, which
influences the consumer’ confidence in brand. Therefore, it is assumed that by enhancing
these components, brand trust towards a luxury brand will be built.
Hypothesis 4: Consumer consciousness towards corporate social responsibility
increases the effect of corporate social responsibility on brand image.
This hypothesis aims to prove the moderating effect of consumer consciousness, or
concern, towards corporate social responsibility on brand characteristics. Being an “interface
between consumers and the company” (Lau & Lee, 1999), brand and its image are developed
by actions of the company’s management including various marketing initiatives. However, it
is also consumer’s concern and attitude towards corporate social responsibility practices in
general that can enhance the link between corporate social responsibility and brand image.
Assumingly, corporate social responsibility embedded into corporate social responsibility
contributes to building a positive brand image and maintain it further.
In its turn, corporate social responsibility is considered through the lenses of several
dimensions used on the basis of investigated studies and derived definitions of the term
“social responsibility” and “sustainability”. Thus, the CSR dimensions can be classified to
the internal and external ones, most of the authors, however, distinguish them differently.
Nevertheless, the boundaries of these distinctions tend to be vague from common groups to
concrete characteristics, for instance, respect for the environment, consumers, workers and
philantropic activities (Ammar, Naoi & Zaiem, 2015).
It has been decided to focus on the main CSR components that were mostly used and
mentioned by the literature, these are: environmental (activities consistent with the
company’s interests undertaken to protect the environment); legal (anti-corruption practices,
respect towards human rights); social (the accountability to consumers, labour policy, society
and stakeholders); philantropic (material and non-material contributions to the community
welfare); economic (the effect of CSR on the company’s financials, the balance between
pursuing CSR practices and making profit).
The study is exploratory, dedicated to the investigation of the relationship between
brand trust and CSR. The hypotheses will be tested and demonstrate whether the CSR
dimensions influence the trust of the consumer towards luxury brands and answer the
question what is worth paying attention to in the development of the CSR strategy.
37
CHAPTER 2. RESEARCH METHODOLOGY
2.1 Research Methods and Methodology for Brand Trust and Consumer Behaviour
To answer the research question, it is necessary to define the further empirical
methods that should be used. The overview of the existing methods will provide the
understanding of the most suitable techniques to be applied in the current research context.
Among the most common existing methods, several groups can be outlined: quantitative and
qualitative research methods that imply gathering data with the means of observation,
documents analysis, or a case study, and survey in its various forms, e.g. interviews,
questionnaires, tests.
According to Kothari (2004), research methods and techniques differ from
methodology. Whereas methods refer to data collection and statistical processing of
information, research methodology implies the knowledge and the ability to apply the
methods to a particular situation, namely, the assumptions under the techniques that are used.
Data can also be presented in different forms, either categorical, which is not measured in
numerical ways, or numerical reciprocally (Saunders, Lewis & Thornhill, 2009).
Fig. 9. Research Process. (Kothari, 2004)
Consumer behavior study can be referred to a marketing research, which is the
process of searching, gathering, processing and preparation of information for operational
and strategic decision-making in the enterprise. Accordingly, this definition clearly defines
the main stages of any marketing research:
38
•
Development of a concept study;
•
Search and information gathering;
•
Data processing;
•
Preparation of the final analytical report.
One of the most time-consuming and costly steps of any marketing research is the
search and collection of information on the researched topic. Depending on the sources of
information used, it is divided into desk, or library, and field research. However, in practice,
field and desk research complement each other, solving a specific range of issues. Obvious
drawbacks with secondary information are frequent discrepancy secondary data conducted
research purposes, by virtue of a general nature the latter; the information is often outdated;
methodology and tools by which collected data are not consistent with the objectives of the
present study (Kothari, 2004).
Field research implies a collection and processing of data specifically for the
marketing analysis. Any field research is based on the primary data, in other words, the
newly received data for a particular study problem. The main advantages of primary
information: data are collected in strict accordance with the precise objectives of the research
problem and the methodology of data collection is strictly controlled. The main drawback is,
however, significant costs of resources. Depending on the tools used in a field research,
information can be divided into:
•
Qualitative research methods which provides descriptive information that cannot be
analyzed in the numerical way;
•
Quantitative research methods, namely, processing the numerical data with statistical
and computational means, which can be further classified into inferrential,
experimental and simulation according to approach it is conducted (Kothari, 2004).
Main sources of marketing and brand management information are interviews and
surveys, observation, experiment, panel discussions and expert review. Survey is the most
common and important form of data collection in marketing. Approximately 90% of research
uses this method. When being involved in a survey, participants receive questionnaire, which
they must complete. Usually, in the written surveys using closed-ended questions, the
answers to which imply the selection of the answers. The main disadvantage that could limit
the use of this method is the long period and the low percentage of the return of completed
questionnaires.
39
2.2 Methodology of Empirical Study
2.2.1 Methodology Overview and Variables Description
For the research on the consumer brand trust, the quantitative approach was chosen as
the most suitable method to answer the research quentions. The quantitative approach,
however, implies knowledge about the existing analysis tools that are considered in the next
paragraphs. During the processing and analysis of marketing research data, the first step is
the frequency analysis, which has several elements. For instance, the average mean being the
quotient of the sum of all values to their number, is a concrete measure which characterizes
any sum as a whole, whereas median is the value of the variable in one unit together, which is
located in the middle of the ranked number frequency distribution. The latter cuts half the
number of distribution and can only be used for the characterization of metric scales
(Saunders, Lewis & Thornhill, 2009).
The second stage of processing and analysis of marketing research data is the
description of the correlations or covariance between the studied variables. Correlation is a
measure of variable dependence. There are several correlation coefficients indicating the
closeness of the relationship between the study variables. The correlation coefficients vary
from -1 to +1, whereas covariance varies from -∞ to +∞. If the correlation coefficient is -1,
the variables are strongly negative relationship and if the correlation coefficient is equal to 1,
then the variables positively have a strictly positive relationship. There are differnet
correlation coefficients, e.g. Pearson’s correlation coefficient or Spearman’s correlation
coefficient (Kothari, 2004).
Before the descriptives, however, factor analysis, exploratory or confirmatory with
established variables (Janssens, Wijen, De Pelsmacker & Van Kenhove, 2008) can be used,
which implies the set of techniques that are based on real-life relation attributes that allow
detection of latent characteristics of the studied phenomena and processes. The main
objective of the factor analysis is to reduce the number of variables and relationships between
variables determining the structure if it is necessary for the study or to confirm the existing
construct measures (Field, 2013). By reducing the number of variables, the most essential
features of the merged variables become obvious. Classification implies the selection of
several new factors of the variables associated with each other. In marketing, this method is
used in connection with the in-depth analysis of consumer behavior to identify clearly
observable factors. To assess the reliability of the scale, especially assessed on Likert,
Cronbach’s alpha is usually used (Santos, 1999).
40
Regression analysis is the statistical method of establishing the relationship between
the independent and dependent variables. Regression analysis is based on the constructed
regression equation that determines the contribution of each independent variable to the
change of dependent variable (Field, 2013). However, if the model implies testing the
mediation and moderation effects, an advanced statistics, i.e. structural equation modelling
(SEM) is used (Janssen et al., 2008) that can be observed in the research on brands and its
characteristics (So, Parsons & Yap, 2013). The current study will be based on the quantitave
approach. Given that the research is focused on the relationship between several factors, SEM
will be used to process the gathered data and test the conceptual model (Fig. 7). Before SEM,
the author conducted confrmatory factor analysis and Cronbach’s Alpha statistic to test
reliability of scales.
In this research, brand trust is measured. The conceptual variables used in the research
were operationalized for further analysis. To justify the operationalization of the variables,
which are research indicators, the author focused on several studies conducted previously that
were mainly using mentioned steps of analysis. Thus, Lau and Lee (1999) and Barnes (2011)
study provided with most of the construct measures for brand reputation, predictaility,
competence and trust with several adjustments:
Corporate Social Responsibility
The respondents were asked to evaluate two scenarios (App. A) according to the description
of the companies’ brands. Hence, the following measures were taken: the evaluation of
company’s level of corporate social responsibility based on the comparison of the two
companies as well as respect towards consumer and consumer values correspondance. This
helps to define whether the compsby is socially responsible or not.
Consumer Consciousness
Consumer characteristics, their attitudes are essential when measuring such concepts as
corporate social responsibility, which relates to the company and brand trust. Consumer
positive attitudes towards CSR practices of luxury brands, assumingly, enhance the
relationship between it and trust towards luxury brand. To define respondents’ concern about
CSR, the author offered to evaluate the level of concern with social, environmental and legal
issues related to any business. In this connection, Aaker (1996) outlined that consumers
always treat any brand as if it is a person, and this interaction also depends on the consumer
personality.
41
Reputation
Among the reputation measures, the author included brand’s reputation evaluation, reliability
and the respondent’s willingness to recommend the brand to other people as the indicators
that a company following CSR practices potentially has a positive reputation in comparison
to one that does not.
Predictability
This construct is related to brand’s intentions and performance of a particular brand (Ong,
Salleh, Yusoff, 2015). To trust the brand, consumer should be convinced that it does fulfill all
the promises and will perform the same and even better than previously. Therefore, three
measures of predictability were taken, namely, expected brand’s product quality, brand’s
profitability and its consistency as consumers tend to predict that luxury brand should be of
the highest quality, maintain high profits and be in general consistent with its promises.
Competence
Competent brand is the one that does not only know its consumer but also is
knowledgeable in other areas and is able to answer the current trend and needs of the society.
Thus, to measure brand’s competence, the author of current reseach asked respondents to
evaluate the brand’s consumer knowledge level as well as its competence in society wellbeing issues and the ability of the brand’s advisors to give full and transparent
recommendations on the brand. If to look at the scenario on the CSR company, it can be
concluded that this company’s employees are highly motivated and allowed to give the
reccomendations that will not disinform the consumer and will procide with a complete
picture of a brand’s features and its application.
Luxury Brand Trust
Brand trust measures were based on the respondents’ responses on brand trust level, feeling
of security when buying the brand and additional value that a CSR company could potentially
provide. The latter depends on the inner responses of the respondents, who seek not only
utility benefits but also the emotional ones (Walter, Cleff & Chu, 2013).
The variables and their measures are presented in Table 1. Mentioned measures were
represented by several questions that will be measured with the 5-point Likert scale (1 –
strongly disagree, 5 – strongly agree). The questionnaire that was provided to respondents is
presented in Appendix A.
42
Table 1. Variables Description Summary
#
Concept
Variable
Type
Processing Name
Dependent Variables
1
2
3
4
Luxury Brand Trust
Trust
Security
Additional value
Brand Reputation
Reputation
Reliability
Recommendation
Brand Predictability
Expected quality
Profitability
Consistency
Brand Competence
Consumer knowledge
Employee recommendations
Competence in society well-being
Trust
Numerical
AddValue
Security
Reputation
Numerical
Reliability
Recommend
ExpectedQuality
Numerical
Profitability
Consistency
ConsumKnowledge
Numerical
EmpRecommend
Competence
Independent Variables
1
Corporate Social Responsibility
Company’s CSR
Consumer Respect
Consumer Values
CompCSR
Numerical
ConsResp
ConsValues
Moderator Variables
1
Consumer Consciousness
Business CSR Concern
Luxury CSR Concern
BusinessConcern
Numerical
LuxConcern
43
2.2.2 Questionnaire and Respondent Profile
To create a representative sample, probability sampling was used, which was also
offered in similar studies mentioned (Lau & Lee, 1990; Barnes, 2011). The data gathering
techniques imply conduction of a survey of 128 respondents of several countries and ages, to
make an unbiased analysis of the consumer behaviour, namely, trust towards socially
responsible luxury brands. To make the questionnaire undertsandable and to avoid potential
inconsistencies, 10 people participated in a pre-test before the launch. The participants of a
pre-test provided the valuable feedback after which several adjustments of the questionnaire
were made.
The questionnaire consisted of three sections, which were dedicated to demographics,
lifestyle and CSR brand characteristics on the basis of two scenarios reciprocally (App. A).
The scenarios implied description of different luxury companies’ brands of an equal price and
quality: the first one provided respondents with socially responsible company description
according to the dimensions mentioned in the previous chapter; the second one related to a
company that does not demonstrate any socially responsible actions. Scenarios approach was
based on the work of Barnes (2011) who also analyzed CSR effects on trust towards a massmarket brand. The respondents were offered to estimate the statements with a 5-scale Likert,
which is a non-comparative rating scale, namely, itemized rating.
The target audience for the study was Russian, namely, 54% of the respondents, and
international consumers, 46%, including such nationalities as Swiss, Austrian, and American
who are acquainted with luxury brands and who have ever made a purchase of the brand
product either on the regular basis or in certain time periods. The respondent profile included
general characteristics: nationality, gender, age, educational level and income. The number of
men and women representatives demonstrated a slight difference (57% of the respondents
were female whereas 43% of male representatives filled out the questionnaire). This can be
described with the higher interest of female respondents towards luxury goods in general.
The education level demonstrated was Master’s degree (58%) and Bachelor’s of Specialist
degree (51%) obtained, meaning that respondents have a high education level. Relatively
high-income level and education level are explained by the fact that respondents were mostly
graduates of international business schools and international companies top-management as
the author of the research used mostly e-mailing and posting in social networks with special
indicators to share the questionnaire and attract luxury consumers.
44
Fig. 10. Gender of the Respondents
Fig. 11. Age of the Respondents
45
When considering luxury brands, it is essential to define the income level of the
respondents. The questionnaire demonstrated that although 35% annual income was in
category of less than 20 thousand euro and 9% did not want to share the information, the rest
56% fall into category of people who earn in the range of 20 and 50 thousand euro annually,
including 12% of those who earn more than 50 thousand euro. This proves that respondents
could afford buying at least one luxury purchase or were planning to buy it in the future,
which was actually confirmed in the following survey questions. To make the concepts
understandable, respondents were provided with examples of luxury brands and corporate
social responsibility definition by UNIDO (2007).
The emphasis in the questionnaire was also put on constructing the respondent’s
profile according to their lifestyle and values attitudes towards social responsibility and
global issues in general. Thus, 91% of the respondents are familiar with CSR practies of
modern brands, whereas 55% even bought or intended to buy a product of any brand because
of its appealling CSR practices. 66,4% of the respondents are willing to pay more for a
luxury brand that follows corporate social responsibility practices. The most frequent
percentage number of potential overpayment varied from 5 to 10% (App. B).
Fig. 12. Income of Respondents
Fig.13. Willingness to Pay More
Interestingly, the respondents answers indicated that most purchased luxury products
that have been ever bought by a respondent or was intended to buy were luxury beauty &
care, food & beverages as well as apparel and accessories. The respondents were also asked
about luxury product category, which need CSR most. These occurred to be the same
category of products. Concerning CSR dimensions, respondents were mostly concerned with
sustainable production and product testing as will as transparent information on the product
ingredients.
46
CHAPTER 3. RESULTS OF THE ANALYSIS AND DISCUSSION
3.1 Data Analysis and Statistical Findings
The collected data was processed in IBM SPSS and IBM SPSS AMOS Software. The
initial step in the data processing was conducting confirmatory factor analysis (CFA) in
AMOS Software to prove the brand image measures, i.e. brand reputation, brand
predictability and competence. Confirmatory factor analysis is used in the case when it is
known from theoretical research which variables should measure a certain factor (Janssens,
Wijen, De Pelsmacker & Van Kenhove, 2008). Therefore, the analysis should be applied to
brand image construct as, in comparison to other constructs, it consists of three differents
measures with submeasures, as it is necessary to understand the extent of accuracy, which
allows these measures to be identified as brand image components.
The interpretation of the model built has demonstrated that that the submeasures of
profitability and competence should be removed as it positively influences the indicators of
the overall model fit, which was also supported by modification indices analysis. The
observation of the measures loadings has also indicated that all the variables except
profitability (.041) have high loading (>.50) on the latent variables and are significant (C.R.,
critical ratio >1.96). After deletion of these two submeasures, the overal fit of the
measurement model improved (Table 2).
Table 2. Goodness of Fit Indices of Confirmatory Factor Analysis
Fit Index type
Observed value
Acceptable value
Fit level
X2
21.625; p=0.27
(df=11)
p>0.05
Good fit
X2/df
1.966
≤3
Good fit
RMSEA
.081
≤0.08
Acceptable fit
GFI
.954
≥0.90
Acceptable fit
AGFI
.883
≥0.80
Acceptable fit
IFI
.978
≥0.95
Good fit
TLI
.956
≥0.95
Good fit
CFI
.977
≥0.95
Good fit
SRMR
.0375
≤0.08
Good fit
Df: degrees of freedom; X2: Chi-square; RMSEA: Root Mean Square Error of Approximation; GFI:
Goodness of Fit Index; AGFI: Adjusted Goodness of Fit Index; IFI: Incremental Fit Index; TLI:
Trucker-Lewis Index; CFI: Comparative Fit Index; SRMR: Root Mean Square Residuals.
47
Fig. 14. Confirmatory Factor Analysis
Considering the deletion of the profitability and competence measures, it can be
explained by the fact that this indicates that in relation to luxury brands the profitability
indicator remains stable independently from the fact whether a brand tend to be socially
responsible or not. Indeed, if to turn to the theoretical insights gained from the literature on
luxury brands, it is obvious that this measure is considered to be high per se and may not be
affected by any practical contributions, for instance, implementation of corporate social
responsibility practices into the strategy. The competence scale, in its turn, was estimated on
the basis of the respondends’ estimates of brand’s concern about future generation and
competence in society well-being and global issues, which, is however, may not be
associated with luxury brands.
The following step that was made was Cronbach Alpha statistics to test whether the
measures are reliable to be grouped into constructs described previously. The fist two scales
related to consumer consciousness towards CSR in general were tested: concern towards CSR
practices in both any business and luxury. The following scales were brand characteristic
48
attributes (App. B). The results provided below demonstrated high reliability of the scales,
which was an acceptable coefficient, i.e. above 0.7 (Santos, 1999).
Table 3. Reliability Statistics
Construct
Consumer
Consciousness
Measures
Cronbach’s Alpha
BusinessConcern
0.826
LuxConcern
CompanyCSR
CSR Brand
ConsumRespect
ConsumValues
Reputation
0.774
Brand Reputation
Reliability
Recommend
0.816
Brand Predictability
Brand Competence
Brand Trust
ExpectedQuality
0.725
Consistency
ConsumKnowledge
EmplRecommend
Competence
Trust
AddValue
Security
0.706
0.861
The next step necessary for the analysis was obtaining descriptive information on the
Likert-scale measures. From central tendency measures, mean, median and mode, mean was
taken for further analysis. Table 4 provides descriptive statistics on the measures including
the average of the variables used for brand image construct.
Table 4. Descriptive Statistics
Measure
N
Minimum
Maximum
Mean
Std.
Deviation
BusinessConcern
128
1
5
3.91
.833
LuxConcern
128
2
5
3.88
.842
CompanyCSR
128
2
5
4.53
.675
ConsumRespect
128
2
5
4.20
.817
ConsumValues
128
1
5
4.32
.860
Reputation
128
2
5
4.02
.869
Reliability
128
1
5
3.83
1.058
Recommend
128
2
5
4.14
.911
ExpectedQuality
128
1
5
3.52
1.057
49
Consistency
128
1
5
3.59
.855
ConsumKnowledge
128
1
5
3.54
.987
EmplRecommend
128
1
5
3.50
.931
Trust
AddValue
128
128
1
1
5
5
4.18
4.03
.900
.955
Security
128
1
5
4.11
.872
BrREP
BrPRED
BrCOMP
CSRmean
CONSCmean
128
128
128
128
128
1.67
1.50
1.67
2
1.50
5
5
5
5
5
3.99
3.55
3.77
4.35
3.89
.812
.872
.734
.653
.772
This data provides with valuable insights on respondents’ way of answering the
questions offered in the questionnaire. The means demonstrated the range from 3.50 to 4.53,
whereas the standard deviation rated between 0.817 and 1.058. In general, the survey
participants demonstrated relatively high estimates on the items. Thus, estimates of the
company’s «A» social responsibility level in comparison to B, the respondents answered in
the range from 4.20 to 4.53.
As the variables and the constructs are unidimensional, valid and reliable, it is allowed
to conduct path analysis using structural equaltion modelling (SEM) in AMOS Software
(Janssens et al., 2008). The author of the research used mentioned scales of brand reputation,
predictability and competence as manifest variables for brand image. Besides, willing to look
at the moderating effect of consumer consciousness, the researcher created new variable for
indicating consumer consciousness towards CSR issues by multiplication of corporate social
responsibility average by the mean of consumer consciousness measure. CSR moderation
effect would mean the higher consciousness level a consumer has, the higher is CSR
influence on brand characteristics, or, brand image.
Having built the path model based on all the variables mentioned previously, the
researcher examined the overall fit of the solution. Fig. 16 demonstrates the initial model
with the moderator. However, despite of positive coefficients obtained in the structural model
presented above, the general quality of the model should be adjusted due to the goodness of
fit indices. The modification indices analysis demonstrated that the introduced moderator, i.e.
insignificant consumer consciousness path as well as trust submeasure should be removed as
allowing the connection between these variables and other variables, namely, CSR and its
measures reciprocally, significantly decreases Chi-square value (Janssens et al., 2008).
50
Fig. 15. The Path Diagram with Moderation
After removal of the variables mentioned, the fit of the solution indicators
demonstrated the goodness of the model (Table 5).
Table 5. The Goodness of Fit Indices
Fit Index type
Observed value
Acceptable value
Fit level
X2
35.047; p=0.09
(df=18)
p>0.05
Good fit
X2/df
1.947
≤3
Good fit
RMSEA
0.083
≤0.08
Acceptable fit
GFI
0.935
≥0.90
Acceptable fit
AGFI
0.870
≥0.80
Acceptable fit
IFI
0.973
≥0.95
Good fit
TLI
0.957
≥0.95
Good fit
CFI
0.972
≥0.95
Good fit
SRMR
0.0422
≤0.08
Good fit
Df: degrees of freedom; X2: Chi-square; RMSEA: Root Mean Square Error of Approximation; GFI:
Goodness of Fit Index; AGFI: Adjusted Goodness of Fit Index; IFI: Incremental Fit Index; TLI:
Trucker-Lewis Index; CFI: Comparative Fit Index; SRMR: Root Mean Square Residuals.
51
Fig. 16. The Path Diagram Adjusted
The figure above provides the adjusted path diagram, which is the final model of the
research outcome. The consumer consciousness moderator had to be removed as the path was
indicated to be insignificant (p>0.001), which can be explained by the fact that the sample
size and another factors and can significantly affect consumer attitude towards CSR
initiatives, for instance, moral values, which can be investigated in addition to overall attitude
towards CSR. In relation to trust scale, for most of the consumers it was identical to the
question on security of the brand; hence, it could be removed. According to both
unstardadised and standardized regression coefficients, it can be observed that corporate
social responsibility of a luxury brand has a positive and a significant influence on brand
image, i.e. brand reputation, predictability and competence (C.R. or t-value is 8.640, p<0.001;
correlation = .86). Finally, brand image, or brand characteristics being influenced by CSR
also demonstrated positive influence on luxury brand trust (C.R. or t-value is 11.151,
p<0.001; correlation = .99), meaning that the main hypotheses concerning corporate social
responsibility influence on luxury brand image and trust towards it driven by the author can
be proved.
The path analysis demonstrated that brand’s pursuing corporate social responsibility
aspects, e.g., legal, environmental and social, in its strategy, is favorable for brand image,
52
which is based on several brand characteristics, such as brand reputation, predictability and
competence. Indeed, Beverland (2004) argued that a luxury brand value driven emergence
that implies philosophy, methods and intentions of luxury business affects brand reputation
and the brand image either positively or negatively depending on what a luxury brand can
offer to its consumer. Interestingly, respondents positively associated brand’s corporate social
responsibility with respect towards consumers. This means that corporate social
responsibility of a luxury brand is believed as branding from authenticity in comparison to
conformity, i.e. understanding its values and discover the ways corporate social responsibility
can enhance branding (Brusseau, Chiagouris, Fernandez Brusseau, 2013).
Being positively affected by CSR, luxury brand image demonstrated significant
influnce on trust towards luxury brand. If to refer to the previous research, it can be observed
that companies’ respect towards environment, consumers and philantropic activities and the
perception of these activities by the consumer influenced trust in a mass-market brand
(Ammar, Naoui, Zaiem, 2015). The model derived during the current research proved,
however, that this could be applied in relation to luxury brands. Moreover, the results of the
study converge with the research on corporate social irresponsibility that, contrariwise,
causes distrust towards a brand (Nasab & Abikari, 2016) and are in agreement with Jin, Park
and Yoo (2017) who highlighted that non-involvement in CSR may negatively influence the
consumer response towards the luxury brand.
3.2 Theoretical Contribution, Limitations and Further Research
On the basis of the conducted research, the model of corporate social responsibility
influence on brand trust was developed. The model contributes to addressing the issues
discussed in previous research on corporate social responsibility. First, it considers the issues
of corporate social responsibility in the context of luxury market and luxury brands that
demonstrates increasing demand for transparency, ethical behavior and sustainability from
the consumers. Second, it focuses on brand trust as one of the most important attributes of a
relationaship between a brand and a consumer using structural equation modelling technique.
Third, the author provided the ground for careful consideration of the measures that previous
authors were using in their research.
To elaborate on limitations of the research conducted and suggest further research in
the area investigated, it is necessary to emphasize the sample size and measures considered in
the analysis. As the study related to international context, 128 respondents, participated in the
survey, represented different countries and continents. Hence, it would be interesting to
53
conduct the research with a larger sample and in the context of one country to explore the
general cultural pattern, which could be useful for local management.
As it can be observed from the analysis process, some of the brand constructs did not
demonstrate influence on brand trust towards luxury brands. This provides a ground for
further investigtion in the relation to other brand’s and consumer characteristics, i.e.
consumer self-concept and its similarity to personality of the brand (Lau & Lee, 1990) to test
the moderationg effect of consumer’s concern towards global issues and corporate social
responsibility in general or emotions evoked by corporate social responsibility practices of a
brand. The relationship between mentioned constructs and brand loyalty or brand affinity
could be also explored as today, brands, especially luxury ones have powerful online
instruments to go far beyond building brand loyalty and create affinity with potential
consumers and make them brand advocates as well as advocates of social responsibility in
long-term perspective. In this sense the moderating effect of emotional attachement could be
investigated.
Besides, the research was based on quantitative approach and did not focus on one
luxury product category. However, in brand management and marketing studies, it could be
also beneficial to conduct some qualitative research, for instance, in-depth interviews of the
consumers to discover their inner motives of being more prone to one luxury brand instead of
another on on the real examples of luxury brands operating in the industry. This could lead to
additional practical implications for the management of a particular luxury brand and
contribute to right implementation of CSR practices into a luxury brand’s strategy. The
product categories in future studies can also be specified, for example, focusing only on
jewelry & watches or apparel, which could lead to attributing corporate social responsibility
to most suitable product category.
3.3 Managerial Implications
The research on corporate social responsibility and its influence on luxury brand trust
provides valuable practical implications for brand management in luxury industry. The model
derived can be applicable for enhancing such brand characteristics as brand reputation,
predictability and competence, in its turn increasing a luxury brand trust level by careful
implementation of corporate social responsibility practices into the brand’s policy in
accordance to main dimensions of corporate social responsibility, including legal,
environmental and social ones.
54
In order to make a consumer aware about luxury brand’s corporate social
responsibility and increase brand trust level, it is important to communicate corporate social
responsibility to luxury consumers as consumers “use ethical information if it is in front of
them, but they will not seek it out” (Torres, 2016). This can be done by benefitting from
modern communication tools as social media, which has an intense synergy with a luxury
brand (Parrott, Danbury, Kanthavanich, 2015). However, this communication should be
implemented carefully to avoid the scepticism towards brand’s corporate social responsibility
actions (Zhang & Hanks, 2016). Therefore, a brand should not only create digital marketing
strategies initiatives in social media to make a new brand product promoted but also
demonstrate consumers the involvement into corporate socially responsibility issues solution
process. It is also beneficial to enhance consumer’s understanding of corporate social
responsibility to make sure that further actions will be used towards right target audience who
understands the efforts of a luxury brand.
Today, several big luxury brands can be observed being active in embedding social
responsibility practices and promoting, for instance, sustainablity throughout supply chain,
human rights and environment protection, i.e. Dior, Tiffany & Co, Stella McCartney or
Armani. Thus, Armani is known for its sensitive approach towards corporate social
responsibility and sustainable policy, and recently it realized the necessity “to deliver a more
committed and concrete approach to Social Responsibility” (Armani.com, 2017). The
strategy implies not only fur free policy and chemical safety of the product which can be
regarded as a marketing instrument but also process control “to ensure that its supply chain
complies with the principle rules governing ethical-social behaviour, safety regulations in the
workplace and respect to the environment” (Armani.com, 2017).
Contrariwise, there are also some companies that still lack practices addressing the
corporate social responsibility issues being accused of an unethical and unsustainable
behavior while new generations whose disposable income steadily grows demand
transparent, sustainable and ethical brands (McPherson, 2016). In this relation, luxury brand
managers should take into consideration the fact that consumers tend to be inspired by ethical
behavior of the brands and can be engaged into co-creation process of new corporate social
responsibility traditions.
It is essential to mention that corporate social responsibility does not guarantee the
increase in brand trust level per se as the core luxury brand characteristics, such as high
product quality, exclusivity, etc. are at the forefront of a luxury brand. However, in
combination with socially responsible characteristics, such brand could gain more benefits.
55
CONCLUSION
The conducted research on the effects of corporte social responsibility on luxury
brand trust empirically measured corporate social responsibility effect on brand
characteristics, as well as luxury brand trust. The conceptual model was built on the basis of
the analysis of existing studies on mentioned concepts as corporate social responsibility,
luxury brand and brand trust. It was discovered that brand and luxury tend to be vague terms
with a number of characteristics suggested by researchers, meanwhile corporate social
responsibility has several dimensions usually categorized in different groups.
The literature review demonstrated that research referred to these topics is limited.
Brand trust usually being considered a part of brand loyalty has rarely been studied as a
separate construct neither in relation to mass-market brands nor to brands of luxury industry,
which in its turn provides a good field for investigations as brand trust is considered as a
driver of purchase intentions and brand loyalty. Today, luxury brands, which are often being
accused of irresponsibility for their operations while obtaining high profits, are facing big
challenges including consumers’ demand for the brands, which do not only posess good
physical and intristic characteristics but also strive for contributing to social well-being and
respecting rights of both employees and consumers.
The empirical analysis of the study has indicated that corporate social responsibility
positively influences brand charactersitics in the consumer’s mindset, i.e. brand image, and
trust towards a luxury brand, which is distinguished by several main features as high quality,
authenticity and creativity. According to the study, corporate social responsibility is able to
have a positive impact on brand image constructed from reputation, predictability and
competence and, thus, to trust towards it, which should be taken into consideration by brand
management of luxury industry.
This does not mean, however, that luxury companies’ brands should only use modern
promotion instruments, for instance, to demonstrate support of environment protection in the
form of campaigns and appealing messages to attract potential consumers. In addition to its
communication, it is essential to ensure social responsibility of internal processes occuring
around brand creation, from manufacturing to the point when it gets to consumers. The
combination of these practices embedded into the overall brand’s strategy will turn the
company into a true advocate and ambassadors of corporate social responsibility as one of the
most vital elements of modern businesses.
56
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effects of processing fluency, individuals’ need for cognition and mood. International
Journal of Contemporary Hospitality Management, 29(8), pp. 2070-2084. Retrieved from
http://proxy.library.spbu.ru:2155/doi/pdfplus/10.1108/IJCHM-11-2015-0666
Zucker, L. G. (1985). Production of trust: institutional sources of economic structure,
1820-1920. Retrieved from http://digitalassets.lib.berkeley.edu/irle/ucb/text /irla0277.pdf
64
APPENDIX A: QUESTIONNAIRE
Welcome! Thank you for taking your time for completing this survey which is carried out
within the scope of a project of the Graduate School of Management, Saint Petersburg State
University. The survey deals with the questions concerning corporate social responsibility
and luxury brand and takes about 7-10 minutes.
Your data will be treated anonymously. This means that no personal information is collected and no reference
can be established to you. This means that no personal information is collected and no reference can be
established to you. Also you will not be personally identified in any way. Please do not hesitate to contact us if
you have any queries.
A. DEMOGRAPHICS
1. Please indicate country of your nationality (write the country name):
2. Please indicate your gender:
a) Male
b) Female
c) Other
3. What is your age?
a) Under 18
b) 18-25
c) 26-35
d) 36-45
e) 45-59
f) 60 and over
4. Please indicate your highest educational level:
a) Elementary school or unfinished high school
b) High school or equivalent
c) College or technical school degree
d) Bachelor’s or Specialist degree
e) Master’s degree
f) PhD degree
65
5. Please describe your annual household income before taxes per person:
a) Less than 20 thousand euro
b) 20-30 thousand euro
c) 30-40 thousand euro
d) 40-50 thousand euro
e) More that 50 thousand euro
f) I do not want to share this information
B. CSR PRACTICES & LUXURY CONSUMPTION
In this section you will be asked about your general attitude towards corporate social
responsibility (CSR). Corporate Social Responsibility is «a management concept whereby
companies integrate social and environmental concerns in their business operations and
interactions with their stakeholders» (UNIDO, 2007).
1. Are you familiar with corporate social responsibility (CSR) practices of any brand?
a) yes
b) no
2. Have you ever bought or intended to buy a product of any brand because of its appealling
CSR practices (e.g. TOMS Shoes "One for One" campaign – "With every product you
purchase, TOMS will help a person in need")?
a) yes
b) no
3. Luxury goods (Dior, Dolce & Gabbana, Cartier, Rolls-Royce, Henessy) of which product
category have you ever bought or eager to buy in the future? Please rank the items in terms of
purchase frequency (1 – never, 5 – frequenty):
a) beauty & care products
b) apparel and accessories (e.g. bags, purses)
d) jewelry and watches
e) food & beverages
f) real estate and transport means (e.g. cars, motocycles, yachts)
66
4. Which product category of luxury goods would you assume need CSR practices most?
Please rank (1 – lowest need, 5 – highest need):
a) beauty & care products
b) apparel and accessories (e.g. bags, purses)
d) jewelry and watches
e) food & beverages
f) real estate and transport means (e.g. cars, motocycles, yachts)
5. Please rank the CSR dimensions that you would consider most valuable for a luxury brand
(1 – least valuable, 5 – most valuable):
a) sustainable production and product testing (e.g. recycable materials, non-animals testing)
b) transparent information on product ingredients
c) sponsorship & donations
d) campaigns to protect environment & society well-being
e) internal support of the employees (e.g. flexible regulations, fair legal conditions)
6. Would you pay more for the luxury brand that follows CSR practices?
a) yes
b) no
7. How much would you pay over the normal product price to contribute to the luxury brand
CSR activities? Please write the approximate percentage:
8. How strong is your concern with global issues in general (e.g. climate change, human
rights)?
a) Global issues do not matter to me
b) I know some general information about about global issues
c) I am interested in any news concerning globl issues
d) I am concerned with global issues but I do not believe in their solution
e) I try to contribute to solving global issues
67
C. CSR & LUXURY BRAND TRUST
Please read the following two short scenarios on luxury companies and answer the questions
below. The companies’ brands presented here are identical in terms of price and quality.
Scenario A
An international company «A» produces a range of high-quality luxury goods from
beauty products to apparel (excluding leather goods) and high-end jewelry under its brand.
Most of the brand products are produced using natural ingredients and recyclable materials.
The beauty & care line goods are not tested on animals and the ingredients information are
transparent for the final consumer. Recently the company has introduced the campaign
towards protection of children rights. The company «A» is also famous for its favorable
labour conditions and positive feedback from the employees who demonstrate high
motivation.
Scenario B
An international company «B» produces a range of high-quality luxury goods from
beauty products to apparel including leather goods, which brings a lot of profit, and high-end
jewelry under its brand. The products packaging is made mostly from plastic and paper
without full information on the ingredients being written. The company has recently faced
several labour issues, however, now it is taking measures to address them. It does not
contribute any resources to the activities for addressing global issues.
Please read the statements based on the scenarios and express your considerations using
the following scale dimensions:
1 – Strongly disagree
2 – Disagree
3 – Neither agree nor disagree
4 – Agree
5 – Strongly agree
CORPORATE SOCIAL RESPONSIBILITY AND BRAND CHARACTERISTICS
1. As a consumer I am concerned with social, environmental and legal issues related to any
business.
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
68
2. As a consumer I am concerned with social, environmental and legal issues related to
luxury business.
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
3. I would describe company «A» as socially responsible in comparison to «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
4. I feel company «A» has a higher respect to its consumers than «B» (1 – Strongly disagree;
5 – Strongly agree).
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
5. Company «A» actions and policies meet my values better than «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
BRAND CHARACTERISTICS AND BRAND TRUST
Reputation
1. I believe «A» brand has an excellent reputation in comparison to «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
2. I would describe «A» brand as more reliable than «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
3. I would rather recommend «A» brand than «B» to other people.
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
Predictability
1. Company «A» brand will not cheat me and will provide with expected product quality in
comparison to «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree69
Strongly disagreeStrongly disagree
Strongly disagree
2. In comparison to «B», company «A» less successful in gaining profits.
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
3. In comparison to «B», brand «A» performance is more consistent.
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
Competence
1. Company «A» knows me as a consumer better than «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
2. In comparison to «B», «A» employees will provide me with all essential product
recommendations.
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
3. Company «A» is concerned about future generations and is more competent in global and
society well-being issues in comparison to «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
Brand Trust
1. In general I would trust brand «A» more than «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
2. I would feel more secure when buying «A» brand product than «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
3. I feel brand «A» promises me additional value in comparison to «B».
Strongly disagree
Disagree Neither agree nor disagree Agree
Strongly agree
Strongly disagree
Strongly disagree
Strongly disagreeStrongly disagree
Strongly disagree
This is the end of the survey. Thank you for your participation!
70
APPENDIX B: DATA ANALYSIS
Frequencies
N
Valid
Missing
N
Country
128
0
Statistics
Age
Educ
128
128
0
0
Gender
128
0
Statistics
PurchaseAct
128
0
Valid
Missing
Income
GlobalIssues Familiarity
128
128
128
0
0
0
PayWillingness
PayPercent
128
0
128
0
Frequency Table
Familiarity
Frequency
Valid
No
Yes
Total
11
117
128
Frequency
Valid
No
Yes
Total
No
Yes
Total
Valid Percent
8,6
91,4
100,0
PurchaseAct
Percent
43
85
128
8,6
91,4
100,0
Valid Percent
58
45,3
70
54,7
128
100,0
PayWillingness
Frequency
Valid
Percent
Percent
45,3
54,7
100,0
Valid Percent
33,6
66,4
100,0
33,6
66,4
100,0
Cumulative
Percent
8,6
100,0
Cumulative
Percent
45,3
100,0
Cumulative
Percent
33,6
100,0
Reliability
Scale: ALL VARIABLES
Cases
Case Processing Summary
N
Valid
128
Excludeda
0
Total
128
%
100,0
,0
100,0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
N of Items
Alpha
,826
2
71
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
BusinessConcern
LuxConcern
3,88
,709
3,91
,693
Scale Statistics
Mean
Variance Std. Deviation N of Items
7,79
2,388
1,545
2
Corrected
Item-Total
Correlation
,703
,703
Cronbach's
Alpha if Item
Deleted
.
.
Reliability
Scale: ALL VARIABLES
Cases
Case Processing Summary
N
Valid
128
Excludeda
0
Total
128
%
100,0
,0
100,0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
N of Items
Alpha
,774
3
Item-Total Statistics
CompanyCSR
ConsumRespect
ConsumValues
Scale Mean if Scale Variance
Item Deleted if Item Deleted
8,52
2,236
8,85
1,891
8,73
1,582
Corrected
Item-Total
Correlation
,573
,574
,705
Cronbach's
Alpha if Item
Deleted
,742
,736
,581
Scale Statistics
Mean
Variance Std. Deviation N of Items
13,05
3,847
1,961
3
Reliability
Scale: ALL VARIABLES
Cases
Case Processing Summary
N
Valid
128
a
Excluded
0
Total
128
%
100,0
,0
100,0
a. Listwise deletion based on all variables in
the procedure.
72
Reliability Statistics
Cronbach's
Alpha
N of Items
,816
3
Item-Total Statistics
Reputation
Reliability
Recommend
Scale Mean if Scale Variance
Item Deleted if Item Deleted
7,97
3,243
8,16
2,306
7,84
3,094
Corrected
Item-Total
Correlation
,619
,781
,628
Cronbach's
Alpha if Item
Deleted
,797
,624
,787
Scale Statistics
Mean
Variance Std. Deviation N of Items
11,98
5,937
2,437
3
Reliability
Scale: ALL VARIABLES
Cases
Case Processing Summary
N
Valid
128
Excludeda
0
Total
128
%
100,0
,0
100,0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha
N of Items
,468
3
Item-Total Statistics
ExpectedQuality
Profitability
Consistency
Scale Mean if Scale Variance
Item Deleted if Item Deleted
6,27
1,539
7,11
3,043
6,20
1,922
Corrected
Item-Total
Correlation
,456
,002
,506
Cronbach's
Alpha if Item
Deleted
,007
,785
,002
Scale Statistics
Mean
Variance Std. Deviation N of Items
9,79
3,853
1,963
3
73
Reliability
Scale: ALL VARIABLES
Cases
Case Processing Summary
N
Valid
128
Excludeda
0
Total
128
%
100,0
,0
100,0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha
N of Items
,785
2
Item-Total Statistics
ExpectedQuality
Consistency
Scale Mean if Scale Variance
Item Deleted if Item Deleted
3,59
,731
3,52
1,118
Corrected
Item-Total
Correlation
,660
,660
Cronbach's
Alpha if Item
Deleted
.
.
Scale Statistics
Mean
Variance Std. Deviation N of Items
7,11
3,043
1,744
2
Reliability
Scale: ALL VARIABLES
Cases
Case Processing Summary
N
Valid
128
Excludeda
0
Total
128
%
100,0
,0
100,0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha
N of Items
,706
3
Item-Total Statistics
ConsumKnowledge
Scale Mean if Scale Variance
Item Deleted if Item Deleted
7,80
2,242
Corrected
Item-Total
Correlation
,554
Cronbach's
Alpha if Item
Deleted
,576
74
EmplRecommend
Competence
7,84
7,04
2,296
2,888
,600
,426
,515
,725
Reliability
Scale: ALL VARIABLES
Cases
Case Processing Summary
N
Valid
128
Excludeda
0
Total
128
%
100,0
,0
100,0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha
N of Items
,725
2
Item-Total Statistics
ConsumKnowledge
EmplRecommend
Scale Mean if Scale Variance
Item Deleted if Item Deleted
3,50
,866
3,54
,975
Corrected
Item-Total
Correlation
,570
,570
Cronbach's
Alpha if Item
Deleted
.
.
Scale Statistics
Mean
Variance Std. Deviation N of Items
7,04
2,888
1,699
2
Reliability
Scale: ALL VARIABLES
Cases
Case Processing Summary
N
Valid
128
Excludeda
0
Total
128
%
100,0
,0
100,0
a. Listwise deletion based on all variables in
the procedure.
Reliability Statistics
Cronbach's
Alpha
N of Items
,861
3
Trust
AddValue
Item-Total Statistics
Corrected
Scale Mean if Scale Variance
Item-Total
Item Deleted if Item Deleted
Correlation
8,14
2,689
,788
8,29
2,758
,679
Cronbach's
Alpha if Item
Deleted
,756
,862
75
Security
8,21
2,861
,748
,796
Scale Statistics
Mean
Variance Std. Deviation N of Items
12,32
5,826
2,414
3
Correlations: Spearman’s Rank Correlation
Brand
CSR
Brand
Rep
Brand
Pred
Brand
Comp
Brand
Trust
1.000
.492**
.461**
.299**
.430**
.443**
128
.000
128
.000
128
.001
128
.000
128
.000
128
.492**
1,000
.663**
.576**
.588**
.648**
.000
128
128
.000
128
.000
128
.000
128
.000
128
.461**
.663**
1,000
.732**
.727**
.714**
.000
128
.299**
.000
128
.576**
128
.732**
.000
128
1.000
.000
128
.685**
.000
128
.653**
.001
128
.430**
.000
128
.588**
.000
128
.727**
128
.685**
.000
128
1.000
.000
128
.761**
.000
128
.443**
.000
128
.648**
.000
128
.714**
.000
128
.653**
128
.761**
.000
128
1.000
.000
128
.000
128
.000
128
.000
128
.000
128
128
ConsConscious
Spearman’s
rho
Correlation
Coefficient
Sig. (2-tailed)
N
BrandCSR
Correlation
Coefficient
Sig. (2-tailed)
N
BrandRep
Correlation
Coefficient
Sig. (2-tailed)
N
BrandPred
Correlation
Coefficient
Sig. (2-tailed)
N
BrandComp
Correlation
Coefficient
Sig. (2-tailed)
N
BrandTrust
Correlation
Coefficient
Sig. (2-tailed)
N
**. Correlation is significant at the 0.01 level (2-tailed).
ConsConsc
76
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