In the context of this research proposal, the focus is on corporate social responsibility (CSR) and its impact on improving organization’s brand equity in the restaurant industry and the moderating role of ethical consumerism, exploring the case of Starbucks Company in UK. Even though CSR is not a new theory in the corporate world, it has progressively been in the limelight in the modern business environment. There is an increasing emphasis for companies to be “good citizens,” and not just focus on maximizing profits, as customers are becoming more aware of the “ethical consumerism” through social campaigns (Huh and Kim, 2012, p 123). CSR at times is considered an unnecessary burden because it is costly to the organization but does not generate a significant financial outcome immediately. However, its relevance in the modern corporate environment cannot be underestimated.
Background of the Study
Study shows that CSR has a long-term positive impact to the business, including enhancing brand equity, which is defined as the company’s value preposition as a result of products or services with a perceptible brand name when equated to a generic equivalent. In today’s competitive and globalized business environment, CSR is among the most vital and dynamic tools that play a significant role in companies brand management, and is used widely to create and maintain brand equity (Huh & Kim, 2012, p 106).
Starbucks is a classic example of a company that has widely embraced CSR as a tool for building its brand equity. CSR is a critical facet in Starbucks’ business management strategy. Starbucks takes all stakeholders such as customers, partners and communities into consideration (Harnrungchalotorn and Phayonlerd, 2015, p 17). This management approach enables the company to create a long-term relationship with customers, becoming more competitive compared to other brands. Because of its value, marketers consider CSR practices an instrument of competitive advantage and enhancing the company performance (Huh & Kim, 2012, p 108).
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In an increasingly competitive business environment, developing a strong brand is a critical factor for the success of any company. Brand equity helps build brand value and enhance the business’ competitiveness in the market. CSR is an approach to enhance brand equity and boost the business’ positive image, attracting both present and potential clients, particularly in the restaurant industry (Hyun, 2009, p 539). Restaurants brands such as Starbucks have significant can wave on CSR practice due to cross-nations operations with products that touch many aspects of the global from the environment, human health, animal welfare, and fair trade and labour-related issues (Harnrungchalotorn and Phayonlerd, 2015, p 23). Highlighting these fundamental issues can generate trust between the customers and the company. However, the efficacy of CSR in boosting brand image for multinational restaurants such as Starbucks is not completely empirically documented as most researchers tend to focus on the general impact of CSR instead of specific dimensions; the need of this proposed study.
Research Project’s Aim and Objectives
- To examine the effects of consumer views of CSR activities (legal, ethical, philanthropic, and economic CSR) on the dimensions of brand equity, brand image, perceived quality, brand awareness, and brand loyalty.
- To identify the influence of ethical consumerism on the relationship between CSR and brand equity.
- What are the effects of consumer perceptions of CSR activities on the dimensions of brand equity?
- What is the influence of ethical consumerism on the relationship between CSR and brand equity?
Scope and Limitation of the Proposed Research
The present study aims to explore the CSR activities, which include legal, ethical, philanthropic, and economic CRS to understand the role of each activity in influencing dimensions brand equity (brand equity, brand image, perceived quality, brand awareness, and brand loyalty) creation in the restaurant industry. Ethical consumerism as the moderating factor help to understand customers’ decision-making process to explain the relationships. Understanding the unique influence of each dimension is important because CSR comprises of multiple dimensions. The primary limitation of this study is that most recent research has approached CSR from an employee perspective with less attention to customer perspective, which might result in limited information on the research area.
Corporate Social Responsibility
Several companies acknowledge the importance of balancing profitability-related goals and establishing a positive public image by accepting social responsibilities. Corporate social responsibility (CSR) is the business activities and status relative to its perceived social duties (Ketprapakorn, and Kantabutra, 2019, p 3772). CSR is a vital strategic management concept based on the notion a business should contribute indirectly or directly to the society through “socially responsible behaviors” that promote social welfare (Yang, and Basile, 2019, p 79).
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Yang and Basile provide a practical perspective of the present studies that conceives of corporate social responsibility as a multidimensional concept comprising of ethical, philanthropic, economic and legal responsibilities of a business. According to the researchers, philanthropic activities are business activities contributing to human welfare by giving back to societies through financial and nonfinancial resources (Yang, and Basile, 2019, p 115). Ethical responsibilities of a business extend beyond regulations and legal obligations and reflect the company’s take on social values and norms. Legal responsibility obliges a company to obey rules and laws, running the business with the legal frameworks. The economic responsibility, on the one hand, posits that a business should create profitable and competitive products, meeting the society’s and customers’ needs (Yang, and Basile, 2019, p 117).
In the context of the restaurant industry, Rhou, Singal and Koh (2016) argue that even though the initial costs of CSR practices surpass the benefits from the economic perspective, CSR in the long-run attracts clients and encourages restaurant workers to job responsibilities (Rhou, Singal and Koh 2016, p 30). The researchers further argued that corporate restaurant managers should take CSR as an investment in product and service quality, employment, safety and corporate governance as it creates competitive advantage and corporate value to the business, particularly during recessions (Rhou, Singal and Koh 2016, p 37).
Research indicates that the firm’s participation in CSR initiative such as environmental conservation translates into greater customer perceived value of its products and services (Gao, and Mattila, 2014, p 22). CSR boost the firm’s identification and establishes long-term relationships with customers (Gao, and Mattila, 2014, p 27). Customers’ consciousness of CSR programs has proven to significantly drive company–customer identification and generate trust in quick-service hotels and restaurants (Swimberghe and Wooldridge, 2014, p 354). The customers’ perception of the organization’s reputation according to its CSR initiatives boost customer identification, and to an extent develops a halo effect around the business (Gao, and Mattila, 2014, p 31), which in turn results into a positive image of the restaurant.
The firm’s brand equity encompasses customers’ understanding of the brand and what the information contributes to marketing strategies. Farjam and Hongyi (2015) fined brand equity as “the set of brand assets and liabilities linked to a brand, brand name and brand symbols,” which can positively or negatively impact the value provided by the firm’s products and services to the customers (Farjam and Hongyi 2015, p 16). The researchers proposed a multidimensional view of brand equity to comprise of brand image, brand awareness, brand loyalty and perceived quality. Brand awareness strength of the brands in the minds of clients. The brand image, on the one hand, is the unique aspect of the brand that sets the business at a distance from the competitors. A positive brand image promotes consistency in the customers’ minds and discourages discrepancies (Farjam and Hongyi 2015, p 21). Perceived quality is the customers’ assessment of superiority or excellence of the business products and service, from a subjective perspective. The brand loyalty, considered as the core component of brand equity refers to customer’s attachment and identification to the brand (Farjam and Hongyi 2015, p 24).
Developing strong brand equity is essential for restaurant chains as it generates positive attachment between clients and the brand. Strong brand equity is associated with an increase in restaurant chains’ revenues. Lack of or poorly developed brand equity can hurt potential cash flows. Study shows that organizations that emphasize on environmental conservation promote customer perception of “green brand image” and consequently behavioural intention towards the brand. Farjam and Hongyi (2015) while studying the interrelations of the core components of brand equity (brand image and awareness, perceived quality, and loyalty), noted that customer’s awareness is a fundamental antecedent, helping to reinforce brand equity by creating a positive brand image and perception of high products and service quality (Farjam and Hongyi 2015, p 28).
Brand Equity and Ethical Consumerism
Ethical consumerism is defined as the practices of buying products and services that promote the well-being of the environment by minimizing environment and social damage, and products or services that seem to produce negative social and environmental impacts (Attfield, 2014, p 16). As the trend in ethical consumerism continues to influence the product and service markets, customers are not only considering products and services quality features but also the social aspects, which include ethical treatment of customers, employees and the environment (Attfield, 2014, p 23). Researchers continue to stress on the significance of understanding consumer’s environmental consciousness levels. Gao & Mattila (2014), for instance, argued that companies should focus on pursuing strategies specific to specific green consumer segments as an operational tool to attract and retain more customers (p 27).
Conceptual and Theoretical Framework
Figure 1: CSR Activities, Brand Equity and Ethical Consumerism
|perceived philanthropic CSR
|perceived ethical CSR
|perceived legal CSR
|perceived economic CSR
Corporate Social Responsibility (CSR) Activities and Brand Equity
A company’s reputation for CSR is a fundamental component in forming brand equity. Brand equity is a result of the interactions between the consumers and a brand that fulfil their expectations. Study shows that socially responsible business behaviours are the most desired expectations. In the restaurant industry, researchers argue that customers’ perception and assessment of quality are impacted by ethical, philanthropic, economic and legal activities, which are the fundamental components of a business CSR activities (Dibley and Clark 2008). CSR translates to positive brand image and awareness and brands preference or loyalty. A study by Butt (2011) asserted that organizations must be transparent about the company’s performance and philanthropic activities. Philanthropic activities such as engaging in charity works can positively influence the company’s image (Butt, 2011, p 12) In summary, CSR activities (ethical, philanthropic, economic and legal) contribute to creating brand equity (brand awareness and image, perceived quality, and brand loyalty/preference) as indicated in figure 1. Therefore, it should be at the core of the corporate strategies, as explained in this research proposal.
Moderating Effect of Ethical Consumerism
Previous literature shows that understanding consumers’ values provide great insight into their behaviours. Study shows that customers with high degree of ethical consumerism tend to have strong brand commitment and brand loyalty toward fair trade and environmentally friendly products (Esmaeilpour and Barjoei 2016, p 55). Lin and Chung (2019) in their study found that restaurant consumer with strong ethical consumerism are more likely to prefer socially responsible brands since an individual’s moral perceptions influences behaviour. The researchers also established a strong correlation between consumers’ social and environmental ethics and increased customer preference for green restaurants (Lin and Chung 2019, p 643). Such study findings support the significance of ethical consumerism as a moderating factor in the relationship between CSR and brand equity, as indicated in figure 1.
The study will adopt both qualitative and quantitative research methods. The qualitative method will entail the collection of data through interviews and surveys, while quantitative method will involve collecting and analysing statistical data to generate answers to research questions. Methodical, pragmatic exploration of social aspects of CSR through statistical techniques will form part of this research methodology. The research will rely mostly on descriptive survey design as it has proven effective in providing important information from a large sample size. The research approach is deductive, where the researcher relies on literature and theories to develop research question or hypothesis (Bendassolli, 2013, p 18). Because this study adopts a deductive research approach, a research question was developed to examine the effects of CSR on brand equity in the restaurant industry, and the moderating role of ethical consumerism.
The research will collect both primary and secondary data source to assess the impact of CSR on CSR on brand equity in the restaurant industry, and the moderating role of ethical consumerism. Primary data is data collected for the first time and is novel in nature. Primary data can be collected through observation, questionnaires, and focus interview. Because this research aims to examine and analyse the different components of Starbucks’ customer experiences of CSR activities and its impact on brand equity, a survey questionnaire with the most appropriate data collection instrument. Consent will be obtained from the branch managers before the commencement of the study. The questionnaire will include the dimensions of CSR and brand equity, which will be narrowed down to relevant statements to measure the components. A combination of both self-administered delivery and electronic questionnaires to collect the primary data. Online questionnaires will be administered randomly through a research firm to customers across the selected UK jurisdictions to customers visiting Starbucks for two months. A screening question will be used to identify customers who have visited Starbucks for the past two months. The frame of the question will be “which coffee store has visited in the past two months? Self-administered questionnaires will be issued directly to a guest saying at Starbucks hotel branches in London, Reigate, Glasgow and Axminister and collected back once the customer has filled them. Closed Likert –Type scales as shown in appendix one Appendix 1 will be applied to collect primary data concerning the research variables. The respondents shall be selected randomly to minimize bias in responses. Secondary data will be obtained from literature, and Starbucks published reports.
Validity and Reliability of the Research
Its validity and reliability measure the credibility and quality of the research. It is essential to take study quality seriously to make it credible and also to ensure that consistency is maintained. Validity is concerned with truthfulness and accuracy of the research findings wile reliability is the measure of the consistency of the results assuming they are replicated by other researchers (Bendassolli, 2013, p 6).
Before constructing and issuing of the questionnaires, a representative from Starbucks and an academic expert in the restaurant industry will analyse the questionnaire to verify the validity of the contents. Minor adjustment to the questionnaire will be based on their expert advice. Because of the nature of the research, it will be possible to request a representative from the Starbucks to assist in cross-examination of the questionnaire. The research will not only be applicable for academic purpose. Still, it can as well help the company to understand the value of CSR on the company and make adjustment where possible. Two academic experts in the hotel and restaurants industry will be lecturers from tourism and hospitality department. To ensure the reliability of the research findings, a pilot test will be with conducted on 20 students drawn from both the faculties of business and tourism and hospitality departments.
Research Population and Sampling
Since this research is about Starbucks restaurants chains, the sample will be in the selected branches in London, Reigate, Glasgow and Axminister. A screening question, will be used to sample Starbucks clients for online surveys: “which coffee store has visited in the past two months? A total of 700 questionnaires will be issued out to collect primary data.
The collected empirical data will be analysed using the software program, IBM SPSS Statistics 22. The tool helps translate analysed data into relevant information for the research, and is also recognized with fields of social sciences and statistics; hence increasing the validity for this study. A multi-group analysis will be completed using a chi-square difference test to examine the moderating effects of ethical consumerism.
Statement of Ethics
Before the study, a letter of authorization will be sought from Starbucks management to allow for data collection. Data collected will be treated with a high level of integrity and will be purely used for research purposes.
Attfield, R., 2014. Environmental ethics: An overview of the twenty-first century. John Wiley & Sons.
Bendassolli, P.F., 2013, January. Theory building in qualitative research: Reconsidering the problem of induction. In Forum Qualitative Sozialforschung/Forum: Qualitative Social Research (Vol. 14, No. 1).
Butt, N., 2011. In Pursuit of High-Quality Marketing Standards.
Dibley, A. and Clark, M., 2008. Corporate social responsibility: key issues and linkages with customer experience.
Esmaeilpour, M. and Barjoei, S., 2016. The impact of corporate social responsibility and image on brand equity. Global Business and Management Research, 8(3), p.55.
Farjam, S. and Hongyi, X., 2015. Reviewing the concept of brand equity and evaluating consumer-based brand equity (CBBE) models. International Journal of Management Science and Business Administration, 1(8), pp.14-29.
Gao, Y., & Mattila, A. S. (2014). Improving consumer satisfaction in green hotels: The roles of perceived warmth, perceived competence, and CSR motive. International Journal of Hospitality Management, 42, 20-31.
Harnrungchalotorn, S. and Phayonlerd, Y., 2015. Starbucks with corporate social responsibility: How Starbucks succeeds in a business world with CSR (Master’s thesis). Karlstads Universitet, Krlstads, Sweden.
Huh, E., and Kim, W. S., 2012. Consumers’ ethical consumption behaviour and related factors. Journal of Consumer Studies, 23(4), 105-127.
Hyun, S. S., 2009. Creating a model of customer equity for chain restaurant brand formation. International Journal of Hospitality Management, 28, 529-539
Ketprapakorn, N., and Kantabutra, S., 2019. Sustainable social enterprise model: Relationships and consequences. Sustainability, 11(14), 3772.
Lin, M.S. and Chung, Y.K., 2019. Understanding the impacts of corporate social responsibility and brand attributes on brand equity in the restaurant industry. Tourism Economics, 25(4), pp.639-658.
Rhou, Y., Singal, M. and Koh, Y., 2016. CSR and financial performance: The role of CSR awareness in the restaurant industry. International Journal of Hospitality Management, 57, pp.30-39.
Swimberghe, K.R. and Wooldridge, B.R., 2014. Drivers of customer relationships in quick-service restaurants: The role of corporate social responsibility. Cornell Hospitality Quarterly, 55(4), pp.354-364.
Yang, J., and Basile, K., 2019. The impact of corporate social responsibility on brand equity. Marketing Intelligence & Planning.
Appendix 1: Questionnaire
I am a student at the faculty of business at the University of XXX currently working on a research project. I request for your valued time to create knowledge. Data collected will be treated with the utmost confidentiality and integrity and will be purely used for research purposes. Any publication or report, only aggregate data will be used, and no one will be mentioned. Thank you for your time.
2. Gender: Female
4. How long have you known Starbucks?
5. How long have you been using Starbucks products and services?
Kindly use a scale; 1- strongly disagree to 5-strongly agree to rate the following statements.
|CSR is a management concept where the firm manages its social activities for the well-being of the community.
|I am aware of CSR activities by Starbucks.
|CSR done by Starbucks improves brand image
|CSR done by Starbucks improves brand awareness
|I would consider a restaurant whose brand that contributes to CSR activities.
|Starbucks supports non-profit organizations and societies where it does its business.
|I think Starbucks integrates charitable contribution to its business activities.
|I think Starbucks tries to maximize profits from CSR.
|I think Starbucks strives to improve economic performance through CSR.
|Starbucks behaves ethically
|Starbucks value and respect the natural environment
|Starbucks donates a position of its income to social works.
|Starbucks strives to improve general well-being.
|I consider myself loyal to Starbucks.
|Starbucks is my first restaurant of choice.
|I can recognize Starbucks brand from competitors.
|I am aware of Starbucks brands.
|The quality of Starbucks products and services is very high.