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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.15 No.3 pp.251-258
DOI : https://doi.org/10.7232/iems.2016.15.3.251

Analysis of the Relationship between CSR Activity and Purchase Motivation

Yoshiki Nakamura*
Department of Business Administration, Aoyama Gakuin University, Tokyo, Japan
Corresponding Author, nakamura@busi.aoyama.ac.jp
June 22, 2016 September 2, 2016 September 5, 2016

ABSTRACT

Companies have developed a keen interest in bolstering their CSR activities. Especially in Japan, CSR is strongly associated with social contribution and mécénat activities. On the other hand, the primary purpose of companies is to provide their products and services to consumers and thereby return value to their shareholders through sales and profits. It is, however, difficult to estimate directly the relationship between CSR and sales/profits. This study focuses particularly on CSR activities related to environmental and consumer issues and community involvement and development. It is also analyzed the relationship between the degree of CSR empathy and product purchase motivation. For accomplishment the purpose, a questionnaire is designed that elicits the respondent’s degree of purchase intention and empathy toward CSR activities supported through sales. The object industry for questionnaires is TV maker. For results of the questionnaire, a covariance structure analysis is conducted to understand potential relationships among CSR activities, sales, and disposable budget. Through this study, it is able to clear the relationship between CSR activities and sales/profits. It is one of the advice to future prospect, strategy and CSR concept for the companies.


초록


    1.INTRODUCTION

    In recent years, companies have developed a keen interest in bolstering their corporate social responsibility (CSR) activities (Maignan et al., 1999; Sen and Bhattacharya, 2001). The specific elements of CSR according to ISO26000 standards are organizational governance, human rights, labor practices, environmental practices, fair operating practices, consumer issues, and community involvement and development (Bernhart and Maher, 2011). These elements comprise the main theme for advancing CSR in an organization. In Japan, CSR is strongly associated with social contribution and mécénat activities. CSR activities might include, for example, organizing community cleanups, a business person’s school visit, ownership of a football team, museum management, and so on. After the Great East Japan Earthquake in 2011, CSR activities were expanded to dispatch employees for disaster relief, raise donations, etc (Keidanren, 2014).

    On the other hand, the primary purpose of companies is to provide their products and services to consumers and thereby return value to their shareholders through sales and profits. CSR activities, however, do not contribute to these outputs. With respect to ISO26000, organizational governance, human rights, and labor practices are internal activities of the company, whereas fair operating practices provide a guideline for business-to-business (B2B) practices. Consequently, it is difficult to estimate directly the relationship between CSR and sales/ profits. The other items-such as environmental practices, consumer issues, and community involvement and development- have some points of contact with consumers. Nevertheless, it is difficult to grasp their relationship with sales and profits as well.

    Many previous studies focused on CSR and purchase motivation. For example, questionnaire and interview approaches conducted to derive buying behavior through CSR activity (Lee and Shin, 2010; Mohr, et al., 2001; Ross, et al., 1990; Tibbett, 1997). Mohr et al. (2001) reports the findings from in-depth interviews of consumers to determine their views concerning CSR of companies. Through discussing implications, academicians, for example, make a contribution toward understanding the underlying dynamics of the role of CSR in consumer purchase decisions. They also pointed out marketing practitioners’ and public policy maker’s stance of the activity. Graafland and Ven (2006) research 1,518 firms send the questionnaires and analyze the relationship between management’s view on CSR and firms’ actual CSR efforts. From the outputs, the strategic and moral motives are equally important. These researches are useful to grasp general people’s and companies’ CSR conscious. It is, however, difficult to grasp a quantitative assessment between the CSR and purchase motivation.

    On the other hand, a quantitative analysis between CSR and purchase motivation realize many researches, especially using a mathematical model (Dodds et al., 1991; Wu and Wang, 2014; Pivato et al., 2008; Becker- Olsen et al., 2006). Wu and Wang (2014) takes Starbucks as an example in the exploration of the impact of different generations’ perceptions of CSR on future buying willingness and collected 624 validated questionnaires. They calculate a correlation coefficient and shows that different generations have significantly different attitudes in two influential ways. Pivato et al. (2008) is conducted a covariance structure analysis and provides empirical support for an assertion that trust is a central variable in many relationships between a company and its stakeholders, and socially oriented companies can use trust to improve their competitive performance. These previous studies focused on the relationship between CSR and products/services.

    These studies, however, mainly analyzed and examined data to extract answers to questions such as “Do you want to buy products from companies engaged in CSR (i.e., sympathize with a cause)?” and “Do you think CSR is beneficial for companies?” In practical application, however, it must be preceded by an independence analysis of “known products, services, and CSR activities” and “their willingness to purchase.” In addition, the purchasing will must have evidence that is the money to be able to pay.

    Through above background and previous studies, this study focuses particularly on CSR activities related to environmental and consumer issues and community involvement and development in the ISO26000 framework (Figure 1). We also analyze the relationship between the degree of CSR empathy and product purchase motivation. This analysis also includes the companies’ product information, comparisons with competitors’ products, and the quantum of money available to the respondents to spend. Taking these into account, it is possible to measure more accurately information regarding “buying a product associated with CSR activities.”

    This study proceeds as follows:

    • 1) A sample of companies is selected and their CSR and sales activities are understood.

    • 2) Considering a company’s information, a questionnaire is designed that elicits the respondent’s degree of purchase intention and empathy toward CSR activities supported through sales.

    • 3) From the results of the questionnaire, the covariance structure analysis is conducted to understand potential relationships among CSR activities, sales, and disposable budget (i.e., the ability to pay for the product). The companies’ positioning, raison d’etre, and ideal way of CSR are discussed.

    The results of this study clarify the relationship between CSR activities and sales/profits. It is also noted that CSR activities must be a strong point for the company.

    2.SAMPLE SELECTION, CSR ACTIVITIES, AND QUESTIONNAIRE

    2.1.Companies, Products, and CSR Activities

    The industry of interest is TV manufacturing. The reason for this choice is that it is easy for respondents to conjure up mental images required for the purchase and use of TVs. It is also difficult to buy a TV set because it is far from inexpensive. As a result, consumers gather information about a TV. The environmental information includes energy conservation features, power savings, etc. This means a strong relationship has to be created between the product and the environment.

    The four companies in this sample are Sharp, Toshiba, Panasonic, and Sony. The products are 32-inch TVs. CSR activities for these companies are mentioned in Table 1 and are grouped as follows: community involvement; education and academic support; culture, arts, and sports activities; and social contribution in foreign countries. These align to the ISO16000 framework for environmental and consumer issues and community involvement and development.

    Considering these four companies, their characteristic CSR activities are cleaning up and conserving the environment. Being aware of global trade, they also indulge in specific activities overseas.

    2.2.Questionnaire Design

    The questionnaire comprised five sections:

    • 1) Demographic information (gender, age, and monthly disposable budget). The monthly disposable budget indicates the level of seriousness with respect to purchasing a TV.

    • 2) Rate the level of empathy for each CSR activity according to a Likert scale: 1. no empathy at all; 2. no empathy; 3. neutral empathy; 4. empathy; and 5. significant empathy. This measures the CSR understanding and level of empathy for each company.

    • 3) Information regarding the TVs is presented. Respondents are asked to rank (1 to 4) their response to the question: “Do you want to buy a TV?” It takes a paired comparison, which is a process of comparing entities in pairs to judge which of each entity is preferred. For taking the paired comparison, many pieces of information are given, such as a figure, a large piece of text, basic efficiency, difference with the other companies, price, and ranking popularity (Table 2).

    • 4) Respondents are asked: “Do you want to buy a product from a company engaged in CSR activities?” Responses are grouped according to a five-point Likert scale (anchors: 1. Don’t want to buy; 5. Want to buy.” This question clarifies the relationship between corporate CSR activities and purchase motivation.

    An open-response question asks: “Please tell us about your impressions or comments of the relationship between CSR and the product.”

    3.DATA COLLECTION

    3.1.Questionnaire Analysis

    The web-based questionnaire collected responses from 150 people between November 8 and December 3, 2014. There were 81 male and 69 female respondents; the average age was 20.7 years. After removing incomplete questionnaires, a total of 135 surveys (73 males and 62 females) were selected for analysis.

    The results for “monthly disposable budget” are displayed in Figure 2 (average 61,900 yen; standard deviation, 32,200 yen). Table 3 tabulates the average and the standard deviation of the degree of CSR empathy, using the question, “Please tell us about your impressions or comments regarding the relationship between CSR and the product.”

    The company that attracted the highest degree of CSR empathy was Sharp, which initiates environmental cleanup activities. The lowest degree of empathy for CSR activities was for Panasonic, which owns a sports team. Generally, activities that are easy to imagine and familiar, e.g., environmental improvement, animal protection, and education, garner higher levels of empathy. In contrast, owning a sports team and mécénat activities, such as managing a museum, attract a low score. The CSR empathy scores for these companies are: Sony, 3.54; Sharp, 3.536; Toshiba, 3.442; and Panasonic, 3.435.

    The highest standard deviation is Sony’s (1.11) for an ongoing CSR activity that establishes museums all over the world. All averages are more than 3 points. As a result, it is thinkable that there is a case for CSR empathy.

    Table 4 lists responses to “the average in order to compare the TVs.” Yet, a calculation of the averages is counted backwards to the points. For example, rank 1 is 1 point, which is the same as rank 2 is 1/2 point and rank 3 is 1/3, etc. The rank order is Sharp, Toshiba, Sony, and Panasonic. Comparing with Table 2, there is no correlation between price and the outputs in Table 4. Consequently, these responses not only examined the price but also examined a basic property with a competitor’s information.

    Table 5 lists responses to the question: “Do you want to buy a product from a company engaged in CSR activities?” All averages of Table 5 are lower than Table 3 for all companies. Since an independent t-test is conducted for each company, the significance is accepted at 1%. Therefore, CSR is empathized regardless of purchase motivation. Considering the purchase, however, is an influence to lower the buying will. Until now, the outputs of an analysis of variance among the companies have not displayed any significant difference.

    The open-ended responses are also analyzed. The favorable comments are as follow:

    • It is a great effort.

    • By performing CSR activities, it is possible to make a clean impression for the company’s products. In a synergy effect, I thought not only sales but also the company’s trust and familiarity are growing.

    • I want to them to perform more aggressively in CSR in the future.

    • It is easy for consumers to recognize CSR activities through the product.

    The following answers indicate the relationship with the product:

    • I think they have a relationship. However, it is a case of consumers knowing about CSR by themselves.

    • Recently, the company has been appealing to the consumer with CSR on purpose. Thus, the relationship between CSR and its products must be a strong one.

    • It does not change the product itself. However I want to buy in a situation where I realize extraordinary CSR contribution.

    • I want to buy the product positivity for the CSR activity.

    Other comments are as follow:

    • I don’t care to buy the product.

    • They have no relationship between them.

    • To buy a product, I do not consider CSR activities. I select the product only based on whether the product is good or useful for me.

    • Even though I know about the CSR activity, I finally choose the product based on its merits.

    These comments suggest no relationship between CSR activity and purchase motivation.

    3.2.Covariance Structure Analysis

    Moving on to “Do you want to buy a product from a company that conducts social responsibility activities?” in Table 5, first, listen to the empathy for the company’s CSR. After that, listen to “Do you want to buy a product?” Now, it is possible to get many expected answers just as in previous studies (Alexander et al., 2014; Boonpattarakan, 2012; Brown and Dacin, 1997), “I would like to buy because of CSR empathy.” In this study, however, two potential relationships are made to analyze two independent questions: first, “do you sympathize companies’ CSR activity?” Second, “do you want to buy the product thinking with respect to your finances?” This way, it is possible to analyze the real relationship between CSR empathy and purchase without relying on the questionnaire flow. Therefore, this research is examined using the covariance structure analysis (Gatignon, 2014). A basic model is established to compare the companies in this research (Figure 3).

    A square is an observable variable in the questionnaire. An ellipse is a latent variable. The latent variable is a constitution concept and not observed directly. On the left-hand side of the ellipse, there is a “social activity factor” from CSR; on the right-hand side, there is a “purchase motivation factor” derived from the product ranking and financial power (Figure 3). AMOS 17 was used to conduct this analysis (Blunch, 2013). In the case of Sharp, the output is illustrated in Figure 4.

    The unidirectional arrow “→” is a standardized coefficient with a strong influence on the observable variable near 1. The bidirectional arrow “↔” is the correlation coefficient among observable variables. Its value indicates a strong relationship in cases near a value of 1.

    The goodness of fit model is shown in Table 6 and generally shows a high value. Unfortunately, Sharp’s value of RMESA is a little bit high at 0.104, whereas the model rejects values greater than 0.10. Nevertheless, this result is accepted for the purpose of comparison.

    Table 7 summarizes results from the covariance structure analysis. It is the standardizing coefficient normalization factor, a square of the multiple correlation coefficient and the correlation coefficient among the observable variable factors. At first, Sharp is at more than 0.77 in regard to the standardizing coefficient. It is especially high at 0.840 when it comes to the question of “the business person’s lessons about environmental issues to elementary school students.” Sharp is ranked for purchase motivation (Table 4); however, the standardizing coefficient of the disposable budget is low. The correlation coefficient among the observable variable factors is also low at 0.082. The result is high at 3.11 for the question “Do you want to buy a Sharp product after you understand their CSR?” To summarize, there is no correlation when product ranking and disposable budget are taken into consideration.

    As for social activity, Toshiba’s standardizing coefficient normalization for “forest maintenance in Tokyo” is 0.797 and 0.769 for “technical assistance to developing countries.” Unlike Sharp, it is evaluated as a contribution to countries and regions. Purchase motivation is a negative coefficient. Toshiba’s TV, G9, is the cheapest of the four products. As a result, a person who has a large monthly disposable budget and is not interested in the TV may desire to buy a Toshiba TV. Toshiba’s correlation coefficient is higher than those of other companies. This result demonstrates the importance of consumers understanding the contributions made to countries and regions, as well as the availability of spending money, which transcends their perception of the product’s quality or price.

    In this analysis, Sony has a negative coefficient to purchase motivation and disposable budget, which is the opposite result to Toshiba’s. That is to say, performance, more than the available funds, has to be demonstrated to motivate the purchase of a Sony product.

    From this analysis, according to the ranks obtained, even with real purchase motivation and disposable budget, is the consumer would buy the product despite the company emphasizing CSR.

    3.3.Open-Ended Responses to Purchase Motivation Generated by CSR Activities

    Through covariance structure analysis, it is clear that there is no link to potential purchase activity even if consumers understand the CSR activity. Thus, to link CSR activities to purchase motivation, we refer to the open-ended responses.

    It has already been mentioned that consumer has to buy the product even if the CSR activity is known to them. Another respondent says there is no relation between CSR activities and purchase motivation. Other responses are as follows:

    • I want to buy a good quality product; I don’t want to buy a bad one.

    • Even if I know about the CSR activity, I do not care. The important thing is the product’s quality.

    • Depending on the activity, enjoyment has to be up. It, however, has no relationship with the product’s quality.

    The free comments said that producers must set their own quality at an appropriate price. If the producer ignores these opinions, then it is difficult to link the purchase understanding with CSR activities.

    However, there are a few more comments:

    • I think consumers come to know about CSR through buying the product they want.

    • I think the product itself does not change. However, I want to buy it if the product makes a high contribution to CSR.

    There is a possibility of linking CSR activities and product purchases (sales), i.e., CSR information can be contained in the product itself, which provides conscious knowledge about CSR when the product is purchased.

    In the case of TVs, CSR information could be communicated through performance, price, annual power consumption and energy consumption efficiency, a measure of electricity rates for one year, recycling, and an Eco-mark. In the case of drink products, for example, such information includes nutritional ingredients, calories, carbohydrates, a poem, and their activity goals and achievements.

    As a result, CSR activities are presented as a part of sales and consumption, which encourages brand loyalty and repeat sales. In this positive cycle, the meanings of a company’s CSR activities are clear.

    5.CONCLUSION

    This study is focus on not only pursuit the sales and profit but also CSR activity. As a result, the purpose of this study is cleared the relationship between the degree of CSR empathy and product purchase motivation. Concretely, 150 people are conducted the questionnaires. By using the outputs, data and free comments analyze general persons’ CSR trend and conscious. The covariance structure analysis is also made and clear no relationship between CSR activities and purchase motivation. Through these analysis, for connecting the CSR activity and purchase motivation, CSR activities show in the scene of the product sells and consumers use.

    However, there are many limitations to this study. For example, the range of industries, products, and services is very narrow as is the range of ages; therefore, both could be expanded besides including the companies’ business strategies and degrees of recognition. It is also cleared causes for non-relationships between CSR activities and purchase motivation.

    Figure

    IEMS-15-251_F1.gif

    Fundamental frame of this research.

    IEMS-15-251_F2.gif

    Monthly disposable budget.

    IEMS-15-251_F3.gif

    A basic model of the covariance structure analysis.

    IEMS-15-251_F4.gif

    The covariance structure analysis output in the case of sharp.

    Table

    Selected companies and their CSR activities

    Selected companies’ TV and their advertising slogan

    The average and the standard deviation of the degree of CSR empathy

    The average in order to compare the TVs

    TV maker’s CSR activities and purchase motivation

    The goodness of fit model

    Summarizes results from the covariance structure analysis

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