From corporate social responsibility to brand activism and the effect on customer loyalty : a structural equation modelling approach

Date
2023-03
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Stellenbosch : Stellenbosch University
Abstract
ENGLISH SUMMARY: Increasingly multinational companies are making statements related to socio-political topics. This phenomenon is called brand activism and augments the concept of Corporate Social Responsibility (CSR). Therefore, it has the potential to direct a wider variety of socio-economic issues. Brand activism implementation causes negative and positive customer reactions. It is a challenge for companies to implement brand activism and predict the impact on customers. Existing literature lacks a robust theoretical body for brand activism. The effects of brand activism on customers are unclear, and there is no valid measurement model. This thesis aimed to understand the phenomenon of brand activism by identifying brand activism as an evolution of the concept of CSR and measuring the quantitative effect on customer loyalty. Therefore, brand activism was differentiated from CSR and implementation guidelines were inferred. A positive impact of progressive brand activism on customer loyalty was anticipated. Based on an in-depth literature review, this positive relationship was ascertained and observed by developing a measurement model to discover the impact of brand activism on customer loyalty. Thereof six brand activism dimensions, namely social, legal, workplace, economic, political, and environmental, were tested regarding the impact on customer loyalty and the effects of the six brand activism dimensions. The impact of brand activism on customers’ legitimacy and authenticity perceptions was uncovered. Customers’ expectations were compared to the measured effect on customer loyalty to make assumptions about the optimal implementation of brand activism. An experimental method utilising a survey with 372 respondents from South Africa, divided into six experimental groups and one control group, was applied. The survey targeted the Millennial generation (Generation Y). Millennials were selected as the unit of analysis as they have greater expectations regarding the socio-political activities of corporations than previous generations. The sample size was determined by applying a statistical power analysis. The experiment constituted six different treatments, including examples from the automotive brand Volkswagen in South Africa. Analysis of Variance was executed, and a structural equation model (SEM) was developed and applied. The SEM included three mediating variables, brand trust, customer-company identification, and brand image, besides the independent variable, brand activism, and the dependent variable, customer loyalty. The study reported an overall positive relationship between brand activism and customer loyalty. The variance analysis did not report significant results. Customer-company identification was the only mediating variable within the SEM reporting a high significance towards customer loyalty. Respondents perceived environmental brand activism as the most important dimension. Customers’ expectation regarding brand activism implementation was higher than the measured customer loyalty. Implementing brand activism was perceived more in an authentic manner than a legitimate one. This research suggests that brand activism as a concept should be implemented complementary to CSR. The relationship between brand activism and customer loyalty is based on the social identity theory. Therefore, customer identification with the company was the strongest predictor of loyalty within this relationship. An expectation-behaviour gap was suggested as customers’ expectations towards the company were higher than their actual remuneration with loyal behaviour. A customer grid model to minimise the cognitive dissonance of customers is proposed for implementation. Overall, this research contributes to the field of strategic marketing and consumer behaviour. In terms of qualitative contribution, this thesis adds to CSR, brand activism, and customer loyalty research. A theoretical basis of the brand activism phenomenon is developed, and a strategic brand activism framework is implemented. The quantitative contribution of the study is a measurement model for testing the relationship between brand activism and customer loyalty and the results of the applied experimental study. The practical contribution of this research is the developed loyalty grid model, loyalty stage process, and overall recommendations based on qualitative and quantitative findings.
AFRIKAANSE OPSOMMING: Multinasionale maatskappye reik in toenemende mate verklarings uit rakende sosio-politieke sake. Hierdie verskynsel word handelsmerk-aktivisme genoem en verbreed die konsep van Korporatiewe Sosiale Verantwoordelikheid (Corporate Social Responsibilty - CSR). Derhalwe hou dit die potensiaal in om ’n groter verskeidenheid sosioekonomiese kwessies aan te spreek. Die implementering van handelsmerk-aktivisme ontlok negatiewe en positiewe reaksies van kliente. Dit skep ’n uitdaging vir maatskappye om handelsmerk-aktivisme te implementeer en die impak op kliente te voorspel. Die bestaande literatuur toon ’n gebrek aan ’n stewige teoretiese model vir handelsmerk-aktivisme. Die effek van handelsmerk-aktivisme op kliente is nie duidelik nie en daar is geen geldige model om die omvang daarvan te bepaal nie. Die doel van hierdie tesis was om om ’n begrip te ontwikkel vir die verskynsel van handelsmerk-aktivisme deur hierdie verksynsel te identifiseer as ’n evolusie van die konsep Korporatiewe Sosiale Verantwoordelikheid (CSR) en om die kwantitatiewe effek op die lojaliateit van kliente te meet. Daarom word handelsmerk-aktivisme as iets anders beskou as net die korporatiewe sosiale verantwoordelikheid (CSR) en gevolgtrekkings word gemaak ten opsigte van riglyne vir implementering. ’n Positiewe impak van progressiewe handelsmerk-aktivisme op lojaliteit van kliente word in die vooruitsig gestel. Met ’n diepgaande literatuurstudie as basis, is hierdie positiewe verhouding bepaal en waargeneem deur die ontwikkeling van ’n metingsmodel ten einde die impak van die implementering van handelsmerkaktivisme op die lojaliteit van kliente bloot te le. Dus word ses dimensies van handelsmerk-aktivisme bepaal, naamlik sosiale, wetlike, werkplek-, ekonomiese, politieke, en omgewingsaktivisme, en dit word getoets met betrekking tot die impak op lojaliteit van kliente. Verder word die uitwerking van die ses dimensies van handelsmerk-aktivisme vergelyk. Die impak van handelsmerk-aktivisme op die legitimitiets- en outentisiteitspersepsie van kliente word blootgele. Die verwagtinge van kliente word vergelyk met die effek op lojaliteit van kliente namate die omvang daarvan bepaal word, ten einde aannames te maak oor die optimale implementering van handelsmerk-aktivisme. ’n Eksperimentele metode insluitend ‘n opname onder 372 respondente in Suid-Afrika, verdeel in ses eksperimentele groepe en een kontrolegroep, word toegepas. Die teikengehoor van die opname is die millenniumgenerasie (Generasie Y). Die millenniumgenerasie is as steekproef geselekteer aangesien hulle hoer verwagtinge as vorige generasies koester rakende die sosiopolitieke betrokkenheid van maatskappye. Die eksperiment is saamgestel met ses verskillende hanterings insluitend voorbeelde uit die motorhandelsmerk Volkswagen in Suid-Afrika. ’n Variansie-analise (ANOVA) is uitgevoer, en ’n strukturele vergelyking modellering (structural equation modelling - SEM) is ontwikkel en toegepas. Buiten die onafhanlike veranderlike, handelsmerk-aktivisme, en die afhanklike veranderlike, kliente-lojaliteit, sluit die SEM die volgende drie mediasie-veranderlikes in: handelsmerkvertroue, identifisering van kliente met die maatskappy, en handelsmerkbeeld. Die studie rapporteer ’n algehele positiewe verhouding tussen handelsmerk-aktivisme en kliente-lojaliteit. Die variansie-analise het nie deurslaggewende resultate opgelewer nie. Die enigste mediasie-veranderlike binne die SEM wat ’n hoe aanduiding in die rigting van kliente-lojaliteit gelewer het, is klient-maatskappy-identifisering. Omgewings-handelsmerkaktivisme is waargeneem as die mees belangrike dimensie. Die verwagting van kliente rakende die implementering van handelsmerk-aktivisme is hoer as die kliente-lojaliteit wat gemeet is. Die implementering van handelsmerk-aktivisme is eerder waargeneem op ’n outentieke wyse as in ‘n legitieme wyse. Hierdie navorsing wil aan die hand doen dat handelsmerk-aktivisme ‘n konsep is wat geimplementeer moet word aanvullend tot maatskappy- sosiale verantwoordelikheid. Die verhouding van handelsmerk-aktivisme en kliente-lojaliteit is gebaseer op die sosiale identiteitsteorie en dus was die identifikasie van die klient met die maatskappy die sterkste voorspeller van kliente-lojaliteit binne hierdie verhouding. Daar is uitgebrei op ’n verwagting-gedragsgaping as die verwagting van kliente teenoor ’n maatskappy wat hoer was as hul werklike vergoeding met lojale gedrag. ’n Klient-roostermodel om die kognitiewe dissonansie van kliente te verminder, is voorgestel vir implementering. In geheel, dra hierdie navorsing by tot die veld van strategiese bemarking en verbruikersgedrag. Die kwalitatiewe bydrae van hierdie navorsing is ’n diepgaande oorsig van literatuur oor die verskynsel van handelsmerk-aktivisme en ’n strategiese handelsmerk-aktivismeraamwerk. Die kwantitatiewe bydrae van die navorsing is ’n metingsmodel vir die verhouding tussen handelsmerk-aktivisme en kliente-lojaliteit en die resultate van die toegepaste eksperimentele studie. Die praktiese bydrae van hierdie navorsing is ’n ontwikkelde lojaliteitsroostermodel, ’n lojaliteitstadiumproses, en oorhoofse aanbevelings gebaseer op die kwalitatiewe bevindinge en kwantitatiewe resultate.
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Thesis (PhD)--Stellenbosch University, 2023.
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