From Corporate Social Responsibility to Market Demand: The Role of Brand Management

Abstract

Brand managers increasingly appeal to altruistic consumer motives by emphasizing corporate social responsibility (CSR) in marketing communication. However, little empirical evidence describes how CSR converts into market demand. This study investigates the dimensions of CSR that conspire with dimensions of brand equity to drive brand performance, by combining firm-level data on CSR, customer-based brand equity, market demand, and covariates covering 256 companies over a 15-year period. The findings show that internal CSR concerns relate negatively to brand associations as well as brand performance. Moreover, the demand effect of CSR can be fully explained by brand equity, underscoring the relevance of branding for CSR management. In particular, brand esteem and familiarity mediate the link between ethicality and market outcomes. Specifically, coping with CSR concerns appears to be important. In our data, perceived brand differentiation is unaffected by low responsibility, but ethical concerns undermine customers’ quality expectations and brand identification, suggesting managing CSR crisis has better prospects when the associated brand equity dimensions are addressed.