Impact of corporate social responsibility on brand loyalty – A literature review

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Journal ISSN
Volume Title
School of Business | Bachelor's thesis
Date
2021
Major/Subject
Mcode
Degree programme
Markkinointi
Language
en
Pages
27
Series
Abstract
Corporate social responsibility (CSR) is becoming more and more important for companies. Customers are becoming increasingly aware and requiring socially responsible actions from firms. CSR actions happen in multiple fields and can be a way for brands to differentiate from competitors, and it can lead to heightened brand loyalty. In this thesis I have defined CSR and studied the connection between firm performance and CSR. This provides a base for how CSR in general can be beneficial for firms. It also shows that engaging in CSR provides positive evaluation from customers. CSR definitions vary, and for this thesis, CSR actions are limited to sustainability, equal and human rights. This limitation is done so that it is beneficial for the link between CSR and brand loyalty. Next brand and brand loyalty are defined. Brand loyalty is found to be generated through satisfaction, and loyalty towards a brand is found to resemble feelings of affection. Different levels of brand loyalty are also studied, to understand that customers do not behave the same way, and what works for one customer does not work for another. Literature review of brand loyalty exhibits that the definitions vary. CSR is then found to affect brand loyalty through increased customer satisfaction. This increased satisfaction can enhance brand loyalty. A loyal customer base protects the brand from the consequences of service or product failure, as positive CSR helps to ease customer evaluations. Brand examples of companies engaging in CSR with a loyal customer base are presented. Lastly, a model describing CSR actions, satisfaction, and CSR is presented. According to the model, besides CSR actions affecting satisfaction that affects brand loyalty, the latter can be used to initiate innovative CSR actions. These actions, if consistent with the brand can then help to improve satisfaction even more.
Description
Thesis advisor
Kajalo, Sami
Keywords
corporate social responsibility, brand loyalty, customer satisfaction, brand
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