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MARKETING: Is CSR becoming increasingly important in marketing?
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Is CSR becoming increasingly important in marketing?

By Aaron Low

BT 201701 MAKETING 01There is no denying that many companies worldwide are increasingly recognising the importance of Corporate Social Responsibility (CSR) as they face backlash from consumers who dislike companies that abuse child labour or cause environmental degradation. Nike's sweatshops is just one of many such criticised practices. Consumers now want to see that business has a role in society too. Generally, there are 4 main components of CSR: economic, legal, ethical and altruistic and all stakeholders have to be considered when a company engages in CSR activities pertaining to these four areas. Numerous examples of CSR efforts in marketing abound globally, especially among multinational corporations. So the question arises: does CSR play an important role in marketing? Do these efforts pay off? The answer seems to be 'yes' from various studies. We look at 3 aspects of CSR in marketing, delineating its importance.

1. Good act in itself

Michael E. Porter of Harvard Business School once said, "Brands can do well by doing good." It seems that he was right. According to a report by Business for Social Responsibility (BSR), CSR principles resonated with brands' customers by inducing loyalty and trust. A recent study from Cone revealed that a staggering 91% of customers would like to hear about a company's CSR and progress, suggesting that customers seek a deeper connection beyond traditional marketing.

Being socially responsible as a company can also serve to improve its image, strengthen its brand and even raise its stock value. For this, the value of transparency is key and should not be overlooked. The lesson is simple; invite customers to see that you are a company that cares and realise that honesty is a highly sought-after characteristic in the modern day. All in all, it has been proved that a well-rounded strategic CSR programme ultimately benefits the company from the competitive advantage that CSR offers and companies who do not have CSR practices stand to suffer from a competitive disadvantage.

2. Engagement of customers/emotional appeal

Cause-related marketing, in which CSR initiatives feature in, is a vital tool in appealing to new customers by engaging them. This marketing technique is said to establish a connection between customers' purchases and the beneficiary to which some money will be channeled to. Such a promotional tool also taps on to the emotions of customers and entices them to purchase the products in question. Companies stand to enjoy a better return on investment (ROI) by having such CSR initiatives incorporated in cause-related marketing and also possibly be ahead of competitors.

One way in which to successfully achieve this deeper connection through promotion of company CSR practices is the use of audience empowerment to drive engagement. Inviting customers to give feedback about the company’s social responsibility empowers customers to provide inputs. It works as an effective marketing tool which promotes a positive reputation at the hands of the customer. Besides, incorporating CSR in marketing gets people talking and sharing more about the ethical practices that a company has, which naturally then leads to more attention on the company and the possibility of increased sales.

However, the ethical issues that the company focus on must seem to be "identifiable" with customers, such that they also see the good in focusing on that particular issue. Procter and Gamble, for example, found that its stakeholders used to have a limited understanding of the firm's CSR initiatives and did not find them relevant. After changing their CSR initiatives to a stakeholder-centric approach, their customers and employees had greater pride in being affiliated with the company and employee and customer loyalty rose. Engaging customers is hence a critical part in CSR marketing strategies.

3. Clear purpose

Finally, when engaging in CSR efforts as a marketing tool, it is pivotal that a company does not forget about having a clear purpose and a correct cause. Some companies face backlash from the media accusing them of greenwashing (feigning interest in social responsibility) just to deceive customers and 'project a good outer image' when in reality morally questionable practices may still be conducted by them behind closed doors.

An example of CSR effort embedded in marketing that is largely regarded to be successful is Coca Cola India’s 'Support My School' campaign. This campaign focuses on a universal cause with Coca Cola obviously having a very clear purpose in mind. By engaging with its audience (kids in rural schools) and supporting them with resources, it subliminally promotes its brand to these kids who can be their future customers.

So how should a company ensure that its CSR has a clear purpose behind it to prevent greenwashing accusations by others? Perhaps these four points should be borne in mind when a company decides on embarking on a CSR program or initiative:

1. Meaningfulness and sustainable impact of programme on stakeholders
2. Whether the program draws upon the company strengths and resources
3. Level of engagement with stakeholders and the media
4. Whether it makes a positive difference to people and the planet

Broadly speaking, a CSR initiative which encompasses the above four points shows a very clear purpose and is likely to yield positive results for the company.

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