Corporate social responsibility boosts young brands

At the institute for psychology at the Johannes Gutenberg-University in Mainz one student in his diploma thesis dealt with the question of how a brand is perceived by consumers if a company operates socially responsibly. The finding: the more unknown or younger a brand, the more the corporate social responsibility of a company influences the reputation of its brands.

“Several scandals such as child labour in the case of Nike raised the awareness of consumers for this subject matter” says Prof. Dr. Axel Mattenklott from the institute for psychology. In return responsible and sustainable activities of a company have positive effects on how its brands are perceived, says Mr. Mattenklott. This, however, only holds true as long as the would-be brand is still unknown.

Therefore, companies could particularly benefit from socially responsible behaviour when they plan to launch a new brand onto the market.

Benjamin Diehl in his diploma thesis called „CSR in der Markenwertdiskussion“ scrutinised the question how the Corporate Social Responsibility (CSR) of a company affects its business success. It turned out that approximately two thirds of interviewees said that their buying decisions are influenced by what they know about the CSR of a company. It was also revealed that even though consumers boycott unethical companies, they do not necessarily buy more from a company with a good CSR record. Thus, it is particularly important not to infringe on CSR, is the conclusion drawn by Mr. Benjamin Diehl.

Therefore, CSR is not a strategic panacea. Nevertheless, in particular for the market positioning of new brands information conveying reliability and trustworthiness may be beneficial because these are aspects which usually take a lot of time to be perceived in the minds of people. Therefore, brands launched by companies with a good CSR record benefit from faith given in advance, says Mr. Diehl. GERMAN