The importance of corporate social responsability in the brand image : the "Nespresso" case study

Abstract

The purpose of this paper is to investigate the relationship of the consumer perceptions about the branding of organizations that invest in social responsibility and the consumer behaviour regarding loyalty and willingness in paying a premium price. Reviewing the literature about Corporate Social Responsibility (CSR), Corporate Social Performance and Corporate Financial Performance, some questions a rise: do consumers understand the efforts made by businesses regarding their social and ethical campaigns? And if so, are consumers willing to pay a higher price for the products and services resulting from these social and ethical campaigns? Are consumers loyal to these businesses? In order to analyse the links between CSR and consumer behaviour, the authors use a structural equations model and a Focus Group. The "Nespresso" Case is analysed and included in the survey questions, since it is a very well known brand amongst Portuguese consumers. The main conclusions of the paper are that although some of the indicators do not present excellent results, the hypotheses tested, in the structural equation model, were verified. As such, we can conclude that social responsibility policies are important in building a strong brand image and in turn lead to consumer loyalty and consequent availability to pay a higher price for the products or services provided. Within the focus group some interesting findings arise regarding the links between CSR, brand image, loyalty and willingness in paying a premium price. There are indicators that although, CSR is considered important for building loyalty, the links regarding the willingness in paying a premium price are thin. Another finding is that communication policies don't address the consumer concerns regarding CSR.