Employee care as a main building block of CSR – Consumer Point of View

Lisette Kruizinga – de Vries & Veronika Čeladníková

BRAND GROWTH STUDY

Growth is for many companies a primary objective. All companies and people want to grow and therefore Brand Growth is an often discussed and important topic. The mission of DVJ is to help companies grow and realise their objectives. Our solutions are developed to support growth by making stronger brands, creating better advertising, innovating progressively, understanding the shopper, and optimising marketing spending. All are developed to support our client’s growth ambitions.

Since 2017, we annually conduct a Brand Growth study amongst marketing professionals to validate our ideas, zoom in on a specific topic and come up with recommendations to use in marketing and marketing research. In the early years of the study, the focus was on our core countries – the Netherlands, the UK, and Germany. Since 2021, we expanded our scope and expanded over Europe, spanning more than 10 countries, including Nordics, Southern, and Central Europe.

Each year, we focus on one theme which we call the “Ingredient to Brand Growth”, and make sure that all ingredients are touched upon in the study. That enables us to zoom into this topic in the study and our vision interviews. This year, we’ve also added the consumer perspective to the study because we were curious to not only investigate what marketers are doing and how businesses can grow but also to discover what consumers value and believe is important and whether this corresponds to what firms are doing. We believe that this aspect is especially important for this year’s theme. Therefore, we conducted an online study among more than 3,200 consumers from the Netherlands, Germany, the UK, and Sweden.

CSR as The THEME of this year

The Brand Growth ingredient for 2023 is Corporate Social Responsibility (CSR) which is part of purpose or purpose marketing. Purpose marketing is generally a broad description and therefore, we have zoomed in specifically on CSR. We define CSR as an initiative of firms not only wanting to make profits but also aiming to do something beneficial for society (free from Sen & Bhattacharya, 2001). This initiative of doing something good for society can be reflected in many activities such as trying to produce more sustainably, taking care of the environment, using less plastic, taking good care of employees, paying producers a fair wage, reducing emissions, investing in society by sponsoring sports or education programs, etc. (Brown & Dacin, 1997).

Some academics argue that it is marketing’s role to be more socially responsible and that firms have such responsibility towards consumers and the environment (Lavidge, 1970). Whereas for a long time, growth was often equated only with financial growth and profits, it is not considered to be always sustainable. Also, Kotler (2011, p1) mentions: “Companies must balance more carefully their growth goals with the need to pursue sustainability.” It is also something that consumers definitely value as research has shown that consumers are willing to pay more for sustainable products (Tully & Winer, 2014). That could range from about 17% to almost 30% on average and 60% of people are willing to pay a price premium (Li & Kallas, 2021; Tully & Winer, 2014). Moreover, academic literature also shows that CSR is positively related to various marketing outcomes, including customer satisfaction and loyalty, firm reputation, brand image (Brown & Dacin, 1997; Luo & Bhattacharya, 2006), and ultimately firm performance and profitability (Luo & Bhattacharya, 2009).

Lucas Hulsebos, the CEO at DVJ, explains why CSR was selected as a theme for 2023: “Being aware of the impact that organizations have on society, the environment, and the economy, CSR is a topic that is becoming more and more important for all brands. Some people even believe that without a purpose, companies do not have the right to exist. Additionally, by incorporating CSR into the strategy, businesses not only fulfil the responsibility they have to consumers and the environment, but CSR is also very beneficial for the company’s long-term growth, which makes it a valuable marketing asset and ingredient for Brand Growth.”

What do consumers perceive as important elements of CSR?

Now, let’s see what consumers believe is important for CSR and what they value in firms when buying products. This chapter discusses the first insights of what we found in the consumer part of our Brand Growth study. In order to examine what consumers believe are important elements of CSR, we asked respondents to imagine that they are the CEO of a company and what improvements they would make regarding corporate social responsibility, without explaining in detail how we define it. Most answers revolve around equal and fair conditions and pay among employees in all four countries (see Figure 1). We do see some minor differences between the countries. For example, in Germany, respondents mentioned equal pay for men and women a bit more; in the UK, the community is mentioned more often, and in the Netherlands and Sweden, we see the environment pop up a bit more. We also see that respondents in all countries want to focus on improving employees’ work-life balance, reducing mental illness, having equal wages for men and women, producing environmentally friendly products, reducing waste and plastic, and building a sustainable business.

Figure 1: Actions that respondents would undertake if they were the CEO of a company

Furthermore, we asked respondents to select five activities that they believe are most closely related to CSR. Also, we can observe that giving employees fair wage rates highest among all countries, while taking care of employees’ work-life balance is fourth. Other important elements are ‘producing environmentally friendly’, ‘producing less waste’, and ‘recycling’. We observe a few differences between the countries but overall, patterns are very similar (see Table 1).

Table 1: Ranking of activities that fit best to CSR

And what are consumers doing themselves? Which activities do consumers engage in to take care of the environment? We have clear Top 3 of activities that are mentioned clearly more often than others, which are recycling, using less plastic packaging and bags, and taking energy-saving measures such as showering for a shorter time or lowering the heating. Other popular activities are buying and selling second-hand items, buying less, consuming less meat, and taking more public transport or bikes. Less popular things, possibly because of the substantial costs involved, are investing in renewable energy sources such as solar panels, a heat pump or driving electric.

Figure 2: Activities consumers engage in

Which cSR elements are important in the buying process and which brands ARE performing BEST AT THEM?

For most consumers, it is very important that firms they buy from engage in certain CSR activities, which are not exactly the same activities they consider the best fit for the term CSR. When consumers buy products, they believe it is important that the firms they buy from focus on paying employees fair wages, recycling, producing less waste, producing environmentally friendly, and reducing packaging. The sixth and seventh positions ranked usage of less plastic than other companies in the same industry, thereby encouraging sustainable consumption. To summarise, during the purchasing process, customers place a greater emphasis on the environmental aspects of CSR, which makes sense given that they are more visible to consumers when purchasing products.

We have also asked consumers which brands they believe are doing best in doing good in their respective categories. The results for the grocery category are displayed in Figure 3. Logically, it is instantly clear that numerous large supermarkets are named in each country. Supermarkets rank first and second in the Netherlands and Sweden, respectively, among all industries examined in the sustainability brand index (sb-index.com, 2023). Additionally, we also see different local heroes popping up for each country. For example, in the Netherlands, Campina, Vegetarische Slager, Hak, Max Havelaar, Tony Chocolonely (which was declared by the sustainability brand index as the most sustainable brand of the Netherlands: www.sb-index.com, 2023), Beyond Meat, Unox, and Unilever. We also see a few typical local brands in Germany, such as Hipp, Mühle, Alnatura, Milka, and Dr Oetker. In Sweden, next to a lot of supermarkets were also mentioned Arla, Oatly, and Änglamark. And finally, in the UK, Heinz, McDonald’s, Nando’s, Kellogg’s, and Unilever were the most often named brands.

Figure 3: Which companies are doing best in doing good? Groceries

Respondents were asked the same question for three other categories – household appliances, banking, and electronic devices. For electronic devices, the most often mentioned brands are clearly Samsung and Apple. Word clouds of brands are very similar for all countries examined, as other large electronic firms such as LG, Sony, Panasonic, Siemens, and Philips (more often mentioned in the Netherlands) dominate the markets. As for household appliances, very similar brands pop up in all countries, like Philips, Bosch, Miele, Samsung, Dyson, Electrolux (which is mentioned more often in Sweden), AEG, and some other smaller brands.

Figure 4: Which companies are doing best in doing good? Electronics and household appliances

However, different banks are mentioned in different countries in the banking industry (see Figure 4), which makes sense because different banks are operating in each country. For the Netherlands, it is ING, Rabobank, ABN Amro, Triodos, or ASN Bank, from which the latter two also communicate that they do a lot for sustainability. In Germany, those were Sparkasse, Volksbank, Commerzbank, and Deutsche Bank. Finally, in Sweden, Swedbank, Handelsbanken, Nordea, Länsförsäkringar Bank, SEB Bank, and Sparbanken are regarded as the top CSR banks.

Figure 5: Which companies are doing best in doing good? Banking industry

Following that, respondents rated the brands they filled out as outperforming the competition in each category on the CSR elements listed in Table 1. And some intriguing trends emerge when we look at particular CSR elements that corporations in some industries score substantially higher on than others (see Table 2). The banking industry stands out, which is related to services rather than actual products compared to the other three industries. The firms that are doing the best in CSR in banking outperform the competition in terms of investing in society, caring for employees’ work-life balance, and minimising the global footprint. For the other three categories, the top CSR firms perform better than the competition in producing environmentally friendly, recycling and stimulating sustainable consumption.

Table 2: CSR activities best firms per category score better than the competition (Top 3)

conclusion

In this article, we discussed the findings from our online study among 3,200 consumers from the Netherlands, Germany, the UK, and Sweden on this year´s Brand Growth topic – CSR. Many consumers believe that an important part of CSR is taking good care of employees by paying them fair wages and also by taking care of their work-life balance. However, elements related to the environment such as producing environmentally friendly, reducing waste and plastic, recycling, and building a sustainable business are also often mentioned. We also discovered which brands are seen as performing well in CSR in four distinct industries. Interestingly, for electronics and household appliances, we see similar brands in all four countries, whereas, for banking and food, we do observe differences in brands that consumers mention.

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References

Brown, T.J. & Dacin, P.A. (1997). The Company and the Product: Corporate Associations and Consumer Product Responses, Journal of Marketing, 61(1), 68–84.

Kotler, P. (2011). Reinventing Marketing to Manage the Environmental Imperative, Journal of Marketing, 75(4), 132-135.

Lavidge, R.J. (1970). The Growing Responsibilities of Marketing, Journal of Marketing, 34(1), 25-28.

Li, S. & Kallas, Z. (2021). Meta-Analysis of Consumers’ Willingness to Pay for Sustainable Food Products, Appetite, 163, 1-11.

Luo, X. & Bhattacharya, C.B. (2006). Corporate Social Responsibility, Customer Satisfaction, and Market Value, Journal of Marketing, 70(4), 1-18.

Luo, X. & Bhattacharya, C.B. (2009). The Debate over Doing Good: Corporate Social Performance, Strategic Marketing Levers, and Firm-Idiosyncratic Risk, Journal of Marketing, 73(6), 198-213.

Sen, S. & Bhattacharya, C.B. (2001).  Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility, Journal of Marketing Research, 38(2), 225-243.

Tully, S.M., & Winer, R.S. (2014). The Role of the Beneficiary in Willingness to Pay for Socially Responsible Products: A Meta-analysis, Journal of Retailing, 90(2), 255-274.