Consumers are increasingly aware of the potentially harmful effects of brands’ business operations on society and the environment. Brands, therefore, face huge incentives to engage in some form of corporate social responsibility (CSR). Yet, consumers do not respond positively to every form of CSR. This Journal of Marketing study suggests that brands should “clean up their own mess” before engaging in charitable efforts aimed at generating consumer goodwill.
Using a database of CSR press releases by leading brands, the authors conducted one of the first large-scale examinations of the effect of CSR on brand sales. They consider three types of CSR based on the extent to which a brand demonstrates accountability for its negative impact on society and the environment: “Corrective,” “Compensating,” or “Cultivating goodwill” actions. They find that, on average, CSR initiatives that seek to reduce a brand’s negative externalities (Corrective and Compensating) provide a boost to brand sales while those focused on philanthropy (Cultivating goodwill) lead to a modest drop in sales.
Featured Speakers: Dionne Nickerson (Indiana University)
Full Journal of Marketing article: https://doi.org/10.1177/00222429211044155
Read the Scholarly Insight for this study here.