The Effect of CSR Practices on Customer-based Brand Equity

Abstract

The paper explores the effect of Corporate Social Responsibility (CSR) practices on building customer-based brand equity. Little research has investigated the influence of CSR on brand equity itself, though customer-based brand equity, consisting of brand awareness and brand associations, has received intensive attention in the marketing area. In particular, this study separates CSR activities aiming for external stakeholders from other-oriented CSR, then compares the effect of CSR on brand equity by orientation. The article employs the objectively measured index of CSR and brand equity to investigate the relationship between CSR and brand while existing studies usually have used consumer’s perception on CSR and brand. The results show that general CSR activities regardless of target stakeholders are not sufficient to influence consumers. Practicing CSR focusing on external stakeholders has significant and positive effect on building customer-based brand equity while CSR, focusing on others, does not. The study reveals that CSR could be a strategic tool for building brand equity when CSR activities are sufficiently appealing to target stakeholders. The appropriately targeted practices and communications of CSR should be considered to satisfy target stakeholder and lead to successful CSR performance.