Csr_and_Social_Marketing

MARKETING PLAN FOR ABC DIARY PRODUCTS A Report By Course : PMBKT 51014 – Managerial Aspects Marketing Course Instructor : Mr. D M Ravi Dissanayake Semester I : 2013 POSTGRADUATE DIPLOMA IN MARKETING Department of Marketing Management Faculty of Commerce and Management Studies University of Kelaniya Table of Contents Introduction 3 1. CSR in Social Marketing 4 2. Theoretical framework of CSR and Social Marketing 6 3. How organizational gain its reputation by CSR and Social Marketing involvement 7 4. Corporate Philanthropy 7 5. How organization maintain Business ethics by involvement of social marketing and CSR 9 6. Latest trend of CSR and Social Marketing involvement in Businesses 10 Conclusion 11 References 12 Introduction The concepts of Corporate Social Responsibility (CSR) and social marketing trend are works as in terms of corporate philanthropy or contributing for the charities and involving to social activities and gaining goodwill while making contributing to the communities have been practiced by many of organizations since late 1800s especially in the Europe and US. It had been legitimate in so far and it is directly benefited the shareholders while corporate donation being one of priority task on their agenda which could afford accordingly. Presently, the concept of corporate social responsibility has been developed primarily during sixties in US. This concept has developed with the idea of organizations responsibilities which go beyond their usual legal obligations. There are various schools of thought on CSR and Social Marketing which fluctuate in between two extremes like Firedman (1970) with the classical economic theory and Freeman (1984), Wood (1991) and Smith (1994) with socially oriented approach. The purpose of this study is explaining how CSR and Social Marketing activities support to gain organizational reputation while helping communities. 1. CSR in Social Marketing According to marketing point of view there are much of fragmentations can be monitor in terms of unit of analysis and the social responsibility dimensions. According to the Kotler and Levy (1969) they have expressed the importance of corporate social responsibilities during nineteen sixties and seventies. They have further focused on the social duties which attached with the process of marketing as social marketing and not on entire social role of the company. As per Anderasen (1994) due to this reason, the area of social marketing has comes to play key role and it was specialized by contributing marketing activities to socially desirable performance and goals. Same way marketing literature has developed with much understand and involvement on ethical point of view, reasoning and decision making process of marketing experts. According to further explanation of Blodgett et al (2001) there is a requirement of paying little attention to the ethical responsibilities for the company as overall. Past studies have only paid little attention regarding how marketing thinking and practices can contribute to the socially responsible practices by the organization. Furthermore, when marketing scholars investigating on CSR, they have focus on this area with very narrow dimensions. According to Barone et al. (2000) marketing has developed cause-related marketing and environmental marketing. However, it has established little link in between these two research areas. When these scholars examined the consumers’ responses to Corporate Social Responsibility they have relied on simple indicators of CSR and then considered only limited dimensions in this construct. According to this fragmented perception, it is directly linked to the scarcity for comprehensive conceptual outlines which created by the marketing discipline. According to Menon and Menon (1997) there are number of theoretical investigations done on how CSR effect on marketing and with concentrate on limited dimensions of CSR like attached with the environmental marketing activities. Even past studies has not yielded on this CSR issue and it also enables to tile coordination of initiate different social responsibilities. Also it is required to notable that later on marketing scholars have focus on importance of focusing corporate responsibility towards the both main groups in stakeholders such as customers and channel members. According to the Griffin (2000) and McWilliams and Siegel (2001) this knowledge has emerged certainly and supports to understanding the corporate behaviors nature in the direction of other stakeholders. By properly investigating on this suggestion can be understand that the conceptualization of these marketing scholars have highlighted Marketing involvement on CSR gradually on marketing literature. According to Maignan and Ralston (2002) these conceptualization has considers that importance of involving various types of social responsibility initiatives such as practicing of good environmental practices, supporting to the charitable tasks and maintaining ethics managements. 2. Theoretical framework of CSR and Social Marketing According to Enderle and Tavis (1998) definitions, corporate social responsibility and its social marketing involvements works as the policy and practices of certain organizations social involvement beyond its usual legal commitment for benefitting the society at large. In addition, Angelidis and Ibrahim (1993) explained that CSR is a kind of corporate social action which go towards the expectation of satisfying social needs though the social marketing. According to Lerner and Fryxell (1998) suggestions CSR can be describes as extent of organizational consistent outcomes with the social values and expectations. The grass root of social responsibility should be concern with this events and it is highly related to the rationale which businesses are likes to perform well in a prosperous society than falling separately. During past two decades, these two concepts and practices have emerge as an indication of challenges which created by existing ever changing society by social marketing activities. At present competitive business environment, only unselfish intentions cannot be justify certain organization’s charitable task and bearing expenditure to philanthropic and social marketing activities. At present, modern customers and stakeholders of the organization are looking at the organizations act on CSR involvements by social marketing as how they are carry out their contributions with the expectation of gaining goodwill or are they truly concern with particular society issues. Therefore, presently business organizations are very concern about their contributions because it is not just give away as donations but as investments with intention of benefiting the firm as well as beneficiaries. 3. How organizational gain its reputation by CSR and Social Marketing involvement The most significant and obvious link of the CSR and Social marketing activities overall corporate performance is generally go through the aspect of reputation. According to Freeman (1984) reputation of certain organization indicates its own success in fulfilling expectations of different types of stakeholders. According research base on the reputation building and corporate strategy, Fombrun and Shanley (1990) have argues that sometimes favorable reputation may empowered certain organization to charge premium prices for their product or services while ensuring their access to capital market and get attraction by better employees as well as investors. Therefore, according experimental evidence provides by their study they have suggested that once certain company contributing to social welfare by social marketing activites means it will get better reputation as a result. It means organizational reputation directly related to brand awareness and it supports in brand differentiation and finally helps to firm to gain itself by good reputation otherwise lose itself due to damaged reputation. 4. Corporate Philanthropy According to the Lerner and Fryxell (1998) the corporate Philanthropy is an activity which goes above and beyond according to requirement of certain organization and which can have an important impact on the communities due to operation of the company. By provisioning charities in the form of percentage of pre-tax earnings it can provides a tangible measure in social effort in corporate managers. Therefore, corporate philanthropy is enhancing the image of certain organization by gaining of high public visibility. Social disclosure generally refers certain organization’s performance by providing information on societal initiatives which undertaken by itself. Companies also tend to provide relevant data regarding their societal programs performs as their social marketing activities as well as CSR programs and how their responds to the societal requirement and expectation. In addition, company’s Pro-social positioning among other companies can be identified with their environmental record policies which affect air and water. Due to this emerging concern with environmental issues can be explained by; * As influence of consumers environmental concerns on product offerings * Act as multidimensional character of these issues In addition to this, financial stability and rates attempting to determine organization’s tendency of social responsibility to grow would be generally able recognized by the importance of the company’s financial strength. According to Stanwick and Stanwick (1998) they had given good evidence to supports the perception which enables company profitability to encourage managers to implementing relevant programs which leads to increases CSR and social marketing involvment level of their company. By other words, the organization level in response to social responsibility is directly affected to the company’s financial performance. According to financial angle, it is not enough to determine the level of CSR which company able to contributes. Sometimes, company may practices excellent employee benefits but it is go beyond the business profitability those benefits are not longer meaningful. According to Fombrunm (1998) therefore, growing companies are likes to act as more pro social as they able to offer employees more chances for their career advancement. Generally, community involvement business organizations can be score highest for their ability in community involvement and it is able to make more contributions on charities. It also can encourage more employee volunteer programs as well as having great local impact on economic involvement by providing tax revenues, Jobs, community development by educational activities and investments. According to Kay (1993), highly reputed companies have competitive advantage by social marketing activities within their businesses while poorly reputed companies are disadvantaging. In such cases Fombrun (1998) has recommended that there is a requirement of set of criteria to evaluating corporate reputations with considering of; 1. By involvement of multiple stakeholder assessments to aggregate into collective determinations. 2. Application of different but overlapping financial and social element on which stakeholder judged organizations. 5. How organization maintain Business ethics by involvement of social marketing and CSR According to perception of CSR as social or stakeholder obligations, it can be imply on CSR and social marketing practices by self interest. It means they are generally enabling businesses to increase legitimacy among their followers. In this sense, Swanson (1995) has pointed out that such types of approaches may fail to gain positive commitment to society and it leads to ignore self interest and consequences. Furthermore, the perception of CSR and social marketing activities as responsibility may fails to provide relevant normative measures to evaluate the extent to real business performs. It also can or cannot be consider as social responsibility. By application of employee friendly policies, organizations may just obey with the social norms. According to Swanson (1995) in such case, these initiatives may also act as a kind of paternalistic expression of corporate power. According to these criticisms, some of researchers have advocate the importance of ethics driven on CSR and Social marketing which are asserting the suitability or unsuitability of certain corporate activities independency in any social or stakeholder responsibility. There are number of examples exists regarding the ethical acts following by the organizations in order to adhere with its CSR and Social Marketing activities. British Petroleum is used to describing illustrating and measuring its involvement in activities and policies. Sbn bank following ethical accounting as social marketing, Application of proactive ethical auditing on The Body shop using social marketing by verifying its process for understanding, reporting and measuring on company’s social, environmental and its practices on animal testing. 6. Latest trend of CSR and Social Marketing involvement in Businesses According to Broberg (1996) some of aspect in CSR and Social marketing activities are regulated by the law in Europe. Within a background of legal there is an increasing awareness emerged on the pursuit of profit alone which works as purpose of company process sometimes may harms to other groups of society. It also creates more harm than good to society in overall. According perception of Germans, certain business organizations level of social responsibility is evaluated by the basis of the legal records. Furthermore, in Germany, business organizations are heavily regulated and must comply with the law. This is only requirement to obtain good corporate citizenship. As per Angelidis & Ibrahim (1993) therefore, within this regulatory frameworks business organizations are free, but not obliged to pursue nonprofit making goals. This means that, firm can made contribution with the philanthropic purpose. In USA, expecting companies to respect the sprit and adhere with the laws and regulation such as accepting legal standards like tax laws and other regulation. In addition, respecting of socio cultural values such as following of socio cultural standards like maintain gender relationship, minority relationship etc. These types of CSR involvement exists in modern business societies. Conclusion At present business environment, almost all business organization highly paying attention to fulfill their social responsibilities by CSR and Social marketing activities. These activities go beyond just charities. It means, present organizations have recognized that involving of CSR and following Social marketing activities will supports to gain good reputation for their organizations as a result. 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