Social Responsibility (CSR) is a companies attitude toward respecting the
effects that the company may have on things like, the environment, their
workers, and the political landscape. Companies may opt to be socially
responsible in order to remain positive in the eyes of their customers, this
can be difficult for businesses that are fundamentally bad for aspects of
society, such as oil or paper companies for the environment.
Corporate Social Responsibility
companies may take some strategic steps to ensure that they are to some effect,
marketable or otherwise… socially responsible.
- Some companies may simply take
the philanthropic approach, and sponsor a charity or fundraise a cause.
According to the Directory of Social Change‘s ‘The Guide to UK Company
Giving’, in 2013, £658 million was given to charity and £369 million was
given in 2014. However, the top 25 charitable companies donated 68% of
this figure, companies such as Lloyd’s Banking Group, Tesco, and Shell.
- Some companies use more
sustainable resources, such as changing packaging, Switching their
resource procurement to more sustainable or conflict free markets.
- Some companies have
co-operatives with their suppliers to ensure that their products’ profits
are spread evenly among each chain of the products manufacture,
distribution, and retail. Or may simply distribute shares of its company
to its employees.
Advantages of Corporate Social Responsibility
- Having a socially responsible
company is marketable and attractive to consumers and buyers.
- Positive Publicity for positive
- Companies are less likely to be
singled out or face action from pressure groups or disgruntled consumers.
- Products are seen as high
quality from consumers, even if the product may be inferior from other
- Retention of current employees
is more likely if the company treats them well.
- The brand of the company
appears stronger and more attractive to consumers.
- Regulation and Authoritative
Bodies are less likely to take interest in controversial practices.
Disadvantages of Corporate Social Responsibility
- There is a greater expense in
the manufacture of products if they need to be replaced.
- There is, therefore, an
increase in cost and a decrease in contribution from products.
- If there is a mistake or
products are made without renewable sources, for example, they may need to
recall some of their products to ensure consistent quality and credibility
in their own CSR program.
that are more socially responsible are most likely going to benefit from it,
however, if the cost of doing so takes a big hit on productivity, then it may
be difficult to convince shareholders.
Branding and Promotion allows a business to present itself in an identifiable way to the consumer that allows them to leave a slight lasting impression of their existence that should aide repeat purchase or identification of their qualities.
Types of Business Promotion
- Advertising – The most common way of increasing brand coverage is through advertising, because of the potential reach and scale of platforms advertising is available on it is very easy to meet the metric a business desires, this also has become more easy to segment further by having online advertising to deliver ads on a uniquely measurable and quantifiable scale, whereas before the amount of impressions and effectiveness of the adverts was not individually classifiable in the real world, using online advertising changes the game as advertisers are able to segment the market down to the age, location and interest.
- Promotions – Offering promotions allow a business to make itself more noticeable to the consumer as they will see the promotion as a deal, and then associate the product and brand. Promotion may also increase brand awareness by sponsoring a stadium or event, that allows them to receive some of the publicity that the stadium has with it.
- Direct Marketing – Marketing to the customer directly through more orthodox methods, such as telemarketing or shopping channels, typically requires a lot of sales cost and sometimes isn’t always effective expenditure, whereas advertising or promotion is more effective at reaching consumers as they are able to form their own opinions, rather than have one forced upon them.
Benefits of Strong Branding
Having a strong brand enables a business to sell to their consumers consistently as consumers will actively recognize and seek out their brand. A strong brand is identifiable, recognizable, aspirational and flexible.
Having a strong brand should enable a business to sell its added value effectively to customers, provide the brand with the ability to charge for the brand at a premium rate and have a reduced price elasticity of demand; enabling them to sell to customers even though there are competitors.
Building a Strong Brand
Building a strong brand can be hard to get right.
- Having a Unique Selling Point allows the customer to differentiate their brand from the others, having something other than a generic product allows the business to market on that principal and build their brand on its effectiveness to the consumer.
- Using Advertising should increase coverage of their brand and make it recognizable to potential customers.
- Sponsorship enables businesses to build a positive relationship with their customers, sponsoring a racing event, for example, presents a positive relationship for customers who watch the race, and need one of the sponsor’s products.
- Social Media and Online presence allow a business to be seen from the internet.
- Viral Marketing and Guerrilla Marketing allow a business to sell its products, often without the need for expensive advertising budgets. However, this tactic can often be hit and miss.
- Emotional Marketing can be used to target the emotions of a customer, by playing on the nostalgic or romantic side of individuals for example.
- Seasonal Marketing can be used to reach customers during festivities and events.