Consumers’ Perception of CSR Activities: What Does it Mean for Companies?

Abstract

Research Question: The paper develops a conceptual model for exploring the factors which impact the consumers' word of mouth (WOM) and willingness to pay (WTP) for products and services of socially responsible companies. Motivation: The paper is based on the research of Castaldo et al. (2009), Pivato et al. (2007), Rim and Kim (2016), and Jarvis et al. (2017) concerning the consumers’ perception of corporate social responsibility (CSR) and measurement of the effectiveness of CSR activities. Accordingly, our paper tries to provide companies with valuable information on how the consumers’ perception of CSR activities impacts the consumers’ trust, awareness, purchase intention, and future behaviour. Idea: The proposed model is based on three pillars: Perception of CSR, Moderating effects, and Willingness to pay and recommend and strives to shed light on their mutual relations. The goal is to better understand the complex mechanisms and consequences of the consumers’ perception of CSR activities of companies. Data: To verify the proposed conceptual model, a questionnaire was developed and distributed. In total, 265 respondents participated in the research. Tools: Structural equation modelling (SEM) analysis was employed to explore the relationships between defined factors. Findings: The findings illustrate that both attitudes towards CSR and CSR companies have an impact on the level of trust and purchase intention. When it comes to WTP and WOM, only the level of trust and purchase intention have an impact. Interestingly, the respondents' awareness of the companies’ CSR activities did not have an impact on WTP and WOM. The model indicates that the companies should communicate their CSR activities which will lead to greater trust and purchase intention leading to higher consumers' willingness to pay and recommend the companies’ products/services. Contribution: The study empirically explores how the perception of CSR and CSR activities potentially influences the WOM and WTP on products and services of socially responsible companies and provides a roadmap on how companies can increase the benefits of their CSR activities.

Consumers' willingness to pay for corporate social responsibility: Theory and evidence

“…While this study primarily analysed the relationship between CSR and WTP from the perspective of consumer behaviour, it might be interesting to study the effect of detrimental corporate social performance of companies on consumer behaviour. Our analysis of studies has also revealed several mediators such as customer satisfaction , brand trust (Nikoli c et al, 2021) and so forth that are in the pathway of an effect between the independent and dependent variables. Future research can examine closely aligned factors like brand purpose and brand virtue for their mediation in the relationship between CSR and WTP.…”

“…The socially responsible activities of companies lead consumers to self‐evaluate and view themselves positively as they associate themselves with contributing toward the greater good by purchasing CSR‐related goods (Bhattacharya & Sen, 2003). This can lead to consumer's willing to pay more (Marquina Feldman & Vasquez‐Parraga, 2013; Nikolić et al, 2021; Wei et al, 2018).…”

“…Perrini et al (2010) examined Italian organic consumers and found that when a store is deemed socially responsible, they are more inclined to trust the private‐label organic items it sells and have a higher WTP for organic goods. Nikolić et al (2021) demonstrate that the more positive opinion people have of a company's CSR, the more they will trust the company and consider buying its products/services. Lerro et al (2019) demonstrate that without trust, consumers generally are not open to engage in active behaviour, like paying higher to support CSR activities.…”

“…Moon and Lee (2018) conducted a study to investigate consumers' value perceptions of apparel companies' CSR activities and found that it had a positive impact on their purchase intention leading to a WTP a premium price Similarly, Ferreira and Ribeiro (2016) examine how the country of origin impacts the relation between CSR and WTP and showed that CSR affects consumer behaviour, particularly, consumers' willingness to pay and purchase intention. Nikolić et al (2021), in their study on CSR, found that the purchase intention of a company's products had a significant and positive impact on WTP (Figure 10; Table 8).…”

Conceptual Model for Exploring Customers’ Online Purchase Intentions

“…It is believed that the pandemic could have significant impact on e-commerce market. Also, other constructs could be integrated in the model such as CSR activities of the company [30]. Another interesting direction of the research could be towards conducting a similar survey in the region and do a comparative study so as to observe the similarities and differences in the consumer behavior.…”