Consumers’ Perceptions in the United States of Corporate Environmental and Social Responsibility in their Purchasing Decisions

Introduction

The growing globalisation outside the marketplace creates external adverse impacts on economic activity, causing significant generational, national, and international social and ecological damage. All economic entities, including companies and consumers, are encouraged to act in a socially responsible manner (Schleer, 2014). The CSR movement has garnered strong political support and is conceptually promoted by politicians. There have been questions on how CSR affects the short and long-term profit prospects of companies and the factors that play a role in the situation. One of the significant influencing factors is the purchasing behaviour of consumers. The buying behaviour of CSR can significantly influence the profit situation. In addition, the duty of responsible consumption can limit the previous economic goal of unlimited freedom of consumption.

Emotions and feelings can influence the decision-making process of consumers – they can impair logical thinking and make it difficult for consumers to choose a product or service. One’s moral obligations to care for other people play a central role in CSR-oriented purchasing decisions (Schleer, 2014). It should be noted that CSR provides emotional, social, and functional value to consumers and each of these values can either enhance or diminishe the overall value proposition for consumers. Apart from that, the added value created by one form of CSR can either reinforce or reduce the attributes of other products (Green & Peloza, 2011). The purchasing behaviour of some consumers is influenced by the perceived “CSR quality” of the companies that produce the products, but some studies stated that good CSR quality might not necessarily mean good product quality as CSR communication may be misleading, which cannot be verified by consumers (Schoenheit, 2014). Apart from that, some surveys note that there is an increasing demand for socially and environmentally responsible companies; therefore, companies should meet the ethical standards in their product manufacturing and take better responsibility for social concerns, such as fair working conditions. The CSR requires the core business to be reoriented towards sustainability that goes beyond the legal requirements, both at home and abroad, as in its core business CSR includes environmental protection, fair working conditions, and consumer protection (Zimmermann, 2016).

This study evaluates the factors that determine the influence of CSR activities on consumers’ purchasing decisions, following the increasing interest in the dimensions of CSR and sustainability and their role in consumers’ purchasing decisions. Today, both consumers and companies are striving to minimise their negative impact on the environment. Currently, there is a lack of literature on the practical implementation of CSR activities in companies (Bhattacharya, Korschun & Sen, 2009; Castelnovo, 2020; Peloza & Shang, 2011). There are also some research gaps about consumers’ awareness for the product and non-product-related CSR activities, consumers’ response to CSR activities involving products and services, and how the awareness and response influence consumers’ purchasing decisions (Chen et al., 2018; Peloza & Shang, 2011). Following these ideas, the main research question is drawn – what is the influence of companies’ environmental and social responsibility on the purchasing decisions of consumers? This study hypothesises that the more visible corporate environmental and social responsibility initiatives are, the greater their influence on consumers’ purchasing decisions.

In all, this study aims to gain insights into the influence of CSR activities involving products and services on consumers’ purchasing decisions in the United States, which were gauged through a structured online survey. As a Western country with the highest Gross Domestic Product (GDP), the United States is deemed to be a highly developed economy and is a role model for many other nations, allowing for generalisation of the results.

Literature Review

Corporate social responsibility is a model implemented in businesses to ensure the social accountability of companies to the environment, stakeholders, societies, and communities. One of its essential components is to assess the impact of the business on the environment. The implementation of the model should mitigate the impact and ensure that the environment is not severely impacted by the operation of the business. Furthermore, businesses should also benefit society and communities. Therefore, companies should strive to understand the needs of customers instead of focusing solely on profitability (Loureiro & Lopes, 2018).

Apart from being a guideline for businesses, CSR can also provide a competitive edge and be an element of competitive strategy by being beneficial to consumers (Oldenburg & Miethlich, 2020) and by becoming assets in terms of product differentiation (Anselmsson & Johansson, 2007; Boehe & Cruz, 2010; Chen et al., 2018; Duarte, 2020), especially in saturated markets. In marketing, product differentiation is the distinction of a product from other products to catch consumers’ attention. Product differentiation is an essential marketing strategy that pertains to the quality of the product or its price. A brand must create a new distinct product or lower the price of the products to create a valuable impact on the customers (Suki, Suki & Azman, 2016). Additionally, product differentiation also includes the relatively lower price of the products, which shall be another factor of creating an impact on the customers (Suki, Suki & Azman, 2016). The CSR activities can generate a real competitive advantage if they manage to increase or create added value for consumers (Chen et al., 2018; Peloza & Shang, 2011).

It has also been observed that consumers are more likely to respond to product-related CSR activities (Anselmsson & Johansson, 2007; Du, Bhattacharya & Sen, 2007; Chen et al., 2018; Peloza & Shang, 2011), which pertain to the attributes of the products such as the labelling of content and origin, policy implementation, and product liability. Other approaches by the manufacturer are rarely taken seriously as such information is not readily available during the purchase; the consumers will have to go through a tedious process with the manufacturer for such information.

Benefits from CSR activities can be achieved by increasing consumer awareness (Du et al., 2007; Sen, Bhattacharya & Korschun, 2006). The CSR activities will prompt corporate evaluation that will impact product evaluation. When a consumer attempts to evaluate a business, he/she shall consider the CSR of the company even if he has no buying experience with the company in the past. This person will use the information stored in his memory developed from the company’s implementation of CSR. This notion demonstrated that the CSR activities of a company play a significant role in the consumers’ corporate evaluation through the knowledge and information made available to them (Butt, 2016).

Without proper implementation of CSR activities, there will be limited information and knowledge available to the consumers which will negatively impact their decision-making process as they are not fully aware of the activities and functions of the business (Mayorova & Lapitskaya, 2016). Based on Fishbein’s Theory of Reasoned Action (TRA), purchase intentions can influence consumers’ purchase behaviour. One of the consumers’ purchase intentions is satisfaction. Nevertheless, consumers who are new to a company will not have any previous experience; hence they cannot decide if they will gain satisfaction from the company, producing no impact on their repeat purchase behaviour. In this regard, CSR plays a vital role in satisfying consumers for them to opt for buying the products of the company (Park, Kim & Kwon, 2017), in addition to sponsorship.

Consumers need adequate knowledge of the business and business-related aspects to make wise purchase decisions wisely. The CSR is an essential element of marketing that helps to relay information and cultivate awareness among the consumers. The crux of CSR lies in the payment of heed to the environment, societies, communities, and stakeholders. Through CSR, they will develop the company’s sense of responsibility and ethical values, and they should be able to identify themselves as essential parts of the company. Nevertheless, the impact on the customers must be positive, which can be achieved by ensuring the overlap between the needs and objectives of the consumers and the needs and objectives of the company. The companies should also address the needs of the consumers for the company to work towards the fulfilment of those needs (Alafi, 2018). Apart from that, one of the important factors associated with marketing is the knowledge sharing process for the customers, as knowledge is one of the central aspects that drives the decision-making process of customers – if they shall opt for the products and services of the concerned brand. Through CSR, the consumers will also develop an idea of the company’s responsibilities and ethical sense, creating the impression that if the brand is paying heed to the environment, it will also manufacture products and design the services as per the needs of the consumers.

Lowering the price as a part of CSR activities has been observed to have a significant impact on the intent of the consumers to purchase the products of that brand. Apart from products, customers are aware of the non-product aspect of the brand that demonstrates the needs of the customers are well-addressed, particularly the customers who are price sensitive. Considering the environmental aspect of CSR, lowering the price also impacts the buying intent of the customers as the consumers will perceive that the company has associated itself with activities that improve the well-being of the wider communities (Albus & Ro, 2017).

On the subject of well-being, social and work-related issues strongly influence a brand’s CSR image, but they are more difficult to communicate to the public (Anselmsson & Johansson, 2007). From the consumer’s perspective, the treatment of employees is vital, especially those who are in contact with consumers (Anselmsson et al., 2016; Rosenbaum et al., 2017). Communication for CSR activities in connection with services is challenging; hence consumers’ perception of that aspect is comparatively low (Miethlich, 2019; Miethlich & Oldenburg, 2019). An example of CSR activities in services is the employment of disadvantaged groups, such as disabled people (Castelnovo, 2020; Duarte, 2020; Miethlich, 2019; Miethlich & Oldenburg, 2019). Promoting the employment of disadvantaged groups will create added value through CSR in addition to securing employment of those in the disadvantaged groups. Companies with such an employment approach will produce a real “shared value” and increase their social prosperity, which will benefit the companies (Miethlich & Slahor, 2018; Papula, Papulová & Papula, 2014).

Method

An online survey was conducted to assess the aspects that were essential for the customers when making a purchase decision for a product or service. The survey was conducted in Spring 2020 using the SurveyMonkey (2020) panel, which includes over two million people worldwide, and attracted a sample with 148 participants residing in the United States. The invitations to participate in the survey were dynamic and adjusted to attract the most representative sample possible. The research question was operationalised, and the respondents were asked questions on whether they consider the environmental and social responsibilities of the companies during their decision-making process on the purchase of products or services, their opinion on CSR, the issues that the companies should prioritise, and several others (Table 1).

A 5-level Likert-scale was used to measure the respondents’ level of agreement to the suggested statements based on the following categories: not true, rather not true, neutral, rather true, and true. Statistical analysis was performed by transferring the gradations to a scale from 1 to 5, in which 1 represents “not true” and 5 represents “true”. Then, the quantitative analysis was executed through descriptive statistics and statistical tests using IBM SPSS statistical software. The statistically significant correlations of the main variables were also assessed based on different demographic characteristics, including gender, age, and household income.

Table 1. Questionnaire of the online survey

Results

The respondents were comprised of 54.1 per cent female and 45.9 per cent male, in which the biggest group was those between 45 and 60 years old (35.1 per cent), followed by the respondents from 30 to 44 years old (31.8 per cent in total). Meanwhile, respondents aged between 18 and 29 years old represented 18.9 per cent of the total population, while 14.2 per cent were aged 61 and over. Apart from that, the respondents’ income level was grouped into four levels – 24.1 per cent of the respondents had a household income of less than USD 24,999, 27.8 per cent was between USD 25,000 and USD 49,999, 36.8 per cent was between USD 50,000 and USD 99,999, and 11.3 per cent made over USD 100,000 in household income (Table 2). Among the respondents, 15 respondents refused to answer this question.

Table 2. Demographic Data of the Respondents

Regarding the region of living, 18.2 per cent of the respondents were from the Middle Atlantic, and 16.9 per cent were from the South Atlantic region. Furthermore, respondents residing in the East North Central, and the Pacific regions made 14.2 per cent and 12.8 per cent of the total population, respectively. Apart from that, 11.5 per cent was from the West South Central region. The rest of the respondents were from the West North Central, East South Central, New England, and Mountain regions (Table 3).

Table 3. Respondents’ Region of Living

In the questionnaire, respondents were asked if they pay more attention to the sustainability of the product or services, and 80.4 per cent claimed that they pay more attention to sustainability practices in products, while 19.6 per cent paid more attention to services. The Chi-square test did not reveal any differences for this indicator according to gender, age, and income groups (χ² (3, N = 148) = 0.74, p = .995).

Meanwhile, 58.8 per cent of the respondents stated that they were aware of a company that promoted the employment of people from disadvantaged groups, and 16.2 per cent mentioned that it was the reason they became the customers of such companies. From this, it can be observed that 27.6 per cent of the respondents who were aware of the companies that promote the employment of the disadvantaged groups became the customers of the companies with the intention to support their initiative. Some of the respondents – 41.3 per cent – were not aware of the companies that promote the employment of disadvantaged groups and 21.0 per cent admitted that they were aware of such companies, they would support the cause. In total, 37.2 per cent of the respondents were supporting or intended to support – if they were aware of – companies that promoted the employment of people from disadvantaged groups.

Apart from that, the respondents were asked to assess the importance of different aspects when making a purchase decision for a product or service. The following criteria that were suggested included: “primarily performance and price count”, “contribution to a socially acceptable development and not harming the environment”, “consideration of the environmental responsibility of the company”, and “consideration of the social responsibility of the company”. The results for each aspect are presented in the following paragraphs.

With regards to the “primarily performance and price count” aspect, 72.1 per cent of the respondents noted that the aspect was important to them while making a purchase decision, with 30.6 per cent claiming that the aspect was crucial. Meanwhile, 22.4 per cent of the respondents stated that this aspect was neither important nor important; they had a neutral stance on this aspect, and 5.5 per cent noted that the aspect was not important to them while making a purchase decision. The Chi-square tests did not reveal any statistically significant differences for assessment of the importance of primarily performance and price count when making a purchase decision for a product or service according to gender (χ² (4) = 0.947, p = .918), age (χ² (12) = 10.614, p = .562) and income groups (χ² (12) = 10.266, p = .593), p-value > .05.

In terms of the “contribution to a socially acceptable development and not harming the environment” aspect, 61.0 per cent of the respondents claimed that they wanted to contribute to a socially acceptable development and did not want to harm the environment with their consumption practice. Some took a neutral stance (32.2 per cent), while 6.9 per cent did not consider the aspect while making consumption decisions. There was no statistically significant differences found for this indicator according to gender (χ² (4) = 1.744, p = .783), age (χ² (12) = 5.931, p = .920) and income groups (χ² (12) = 12.745, p = .388), p-value > .05.

In the matter of “consideration of the environmental responsibility of the company when making a purchase decision” aspect, the respondents were questioned to which extent they agreed with the following statement: “Only when I have products or services from different companies, but with identical characteristics to choose from, I consider the environmental responsibility of the company”. In all, 47.7 per cent of the respondents agreed with this statement, with 18.4 per cent completely agreed. Meanwhile, 35.4 per cent took a neutral position, while 17.0 per cent did not agree with the statement. The statistical tests did not reveal any statistically significant correlation between the respondents inclination to consider the environmental responsibility of the company and their demographic characteristics according to gender (χ² (4) = 0.695, p = .952), age (χ² (12) = 11.428, p = .493) and household income (χ² (12) = 16.417, p = .173), p-value > .05.

Moreover, on the subject of “consideration of the social responsibility of the company when making a purchase decision”, 42.5 per cent of the respondents considered the social responsibility of the company when they had products or services from different companies with identical characteristics to choose from. Among the respondents, 39.5 per cent were neutral, while 18.3 per cent did not consider the social responsibility of the company when making purchase decisions. Consideration of the social responsibility of the companies when making purchase decision did not differ according to gender (χ² (4) = 1.364, p = .850), age (χ² (12) = 15.642, p = .208) and income groups (χ² (12) = 11.219, p = .510).

As to the companies’ CSR, the respondents’ opinions on CSR were inquired, and 159 answers were received regarding this topic. Almost half of the respondents agreed that CSR was essential and necessary; 53.4 per cent of the respondents answered this question, which comprised 49.7 per cent of the total answers received. Meanwhile, 14.2 per cent of the respondents that answered the specific inquiry – 13.2 per cent of the total answers – claimed that CSR was not too important and necessary, while 10.1 per cent of the respondents – 9.4 per cent of the total answers – believed that CRS was dishonest and was a marketing technique for the company’s reputation. Apart from that, 29.7 per cent of the respondents – 27.7 per cent of the total answers – claimed that if they were planning to do something good, they would get involved themselves through activities such as volunteering and donations.

Regarding which issues the companies should address most urgently, 50.7 per cent of the respondents pointed to fair and safe working conditions while 31.8 per cent was concerned with environmental protection. Meanwhile, 12.2 per cent of the respondents claimed that promoting the employment of disadvantaged groups should be prioritised. Moreover, 5.4 per cent of the respondents mentioned other issues such as the production of high-quality goods at a reasonable price (2 respondents), remaining profitable (2 respondents), both environmental and social issues (2 respondents), and provision of high wages and benefits to the employees (2 respondents).

Conclusion

The study aimed to assess the essential aspects that can impact consumers’ purchase decisions for a product or service. The research was conducted through an online survey involving the United States citizens with a sample of 148 participants comprised of 54 per cent women and 46 per cent men. The results of the survey were statistically analysed.

Based on the literature review, CSR activities are crucial in businesses. Businesses must pay attention to the well-being of the stakeholders, customers, and the environment. The pollution rate is increasing in the current era; therefore, companies must check their pollution level and mitigate their impact on the environment. Furthermore, the needs of the customers should be accounted, and companies should identify their needs first as consumers tend to not opt for a business that pays heed to only profitability as consumers’ intent has changed. Therefore, the CSR activities will influence consumers’ level of information and knowledge that are used in making their purchase decisions.

Considering the results, the research question on the influence of companies’ environmental and social responsibility on the purchasing decisions of consumers can be answered. The environmental and social responsibility of companies plays a subordinate role in consumers’ purchasing decisions and is only considered when the actual customer need is satisfied. Product-related initiatives are observed to have the most significant influence on the purchasing decisions of consumers due to their visibility. Therefore, the earlier hypothesis – the more visible corporate environmental and social responsibility initiatives are, the greater their influence on consumers’ purchasing decisions – is supported.

For the majority of consumers, services, and the price of the product were important in their purchasing decisions. In addition, consumers seem to be more sensitive to product-related CSR activities compared to service-related CSR activities. Interestingly, the aspects do not vary significantly according to age, gender, or income. It can be observed that for consumers, factors such as environmental and CSR are important in consumers’ purchasing decisions, but the factors are not exclusion criteria in their absence. Apart from that, companies should also communicate their service-related CSR activities better to increase consumers’ awareness.

Despite the small sample of this study, the results are in line with the findings of the existing literature. Future research should conduct similar research in other cultures and with larger samples. The communication of CSR activities regarding services and its comparison to product-related CSR activities should also be further researched.

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