Corporate social responsibility : a double edged sword?

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Master Thesis MSc.

Business Administration

Corporate Social Responsibility - A Double Edged

Sword?

Ákos Ádám Konkoly Student number: 11264047

Submission date: 23rd_{June 2017 – Final version}

Track: MSc. in Business Administration – Marketing Track University of Amsterdam

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Statement of Originality

This document is written by Student Ákos Ádám Konkoly who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Index of tables

Table 1 Summary of physical attributes and psychological values of luxury ... 16

Table 2 Summary of the different CSR engagement types, their categorisation and examples thereof 20 Table 3 Luxury/mass-market scenarios per the final questionnaire ... 37

Table 4 Peripheral (cause-related marketing)/Embedded (recycling) CSR scenarios in the final questionnaire.………...….…..40

Table 5 Comparison of means and standard deviations of the product-type attention check………....48

Table 6 Comparison of means and standard deviations of the CSR-type attention check………….…49

Table 7 The mean, standard deviation, correlation and reliability values for items of the mass-market item condition (N = 98)………..52

Table 8 The mean, standard deviation, correlation and reliability values for items of the luxury condition (N = 113)………....……53

Test 9 Test of between-subject effects in relation to purchase intentions………..54

Table 10 Comparison of means and standard deviation of purchase intention scores for product types and CSR type combinations………....…55

Table 11 Coding of the contrast coefficient for both one-way ANOVA calculation……….56

Table 12 Contrast test results of means per the mass-market condition……….…....57

Table 13 Contrast test results of means per luxury condition………...58

Table 14 Consequent table of the mediation results per the mass-market condition……….63

Table 15 Results of the direct, total and indirect effects of the mediation results of the mass-market condition……….63

Table 16 Consequent table of the mediation results per the luxury condition………...……65

Table 17 Results of the direct, total and indirect effects of the mediation results of the luxury condition……….……65

Index of figures

Figure 1 Theoretical model……….……55

Figure 2 Theoretical model……….……55

Figure 3 Profile plot of the relationship between product-type and CSR-type relative to purchase intentions..……….…….….59

Figure 4 Profile plot of the relationship between CSR-type and product-type relative to purchase intentions………...59

Figure 5 Mediation model of CSR-CA on the type of CSR and purchase intentions relationship in the mass-market condition………61

Figure 6 Mediation model of CSR-CA on the type of CSR and purchase intentions relationship in the luxury condition………..63

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Abstract

Present research aimes to provide insight regarding how consumers’ purchase intentions change when different brand-types are associated with different types of CSR. Specifically, it examines how purchase intentions change and differ between mass-market and luxury products when peripheral and embedded CSR are associated with them. Additionally, the question whether CSR-CA beliefs (the perceived extent to which a company’s ability to produce goods is hindered by associations with CSR) mediates this relationship was raised. Results indicated that consumers have higher purchase intentions for luxury goods when it is associated with peripheral (philanthropy), and mass-market goods when associated with embedded (recycling) CSR. Regarding the mediation effects of CSR-CA on the brand/CSR-type and purchase intentions relationship, results displayed that a partial mediation in both cases was present and therefore can partially explain the outcome of the different types of associations on purchase intentions. The Thesis contributes to existing research in that no prior study has considered to compare both mass-market and luxury to different types of CSR engagement. Thus, nor have there been underlying mechanisms or mediators identified than can reliably explain the differing preferences regarding the various brand- & CSR-type associations and their outcomes on purchase intentions.

Keywords: CSR, Luxury, Mass-market, Recycling, Philanthropy, Embedded CSR, Peripheral CSR, Purchase intentions, CSR-CA beliefs

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1. INTRODUCTION

The world we live in today is constantly moving towards greener, more sustainable solutions (Bains 2012, Belz & Schmidt-Riediger, 2010), from inventing new methods of producing sustainable fuel (Machado et al., 2013) to reducing the environmental damage of production (De Brito et al., 2008). This implies that the luxury industry must also consider incorporating sustainability into products and production processes (Carrigan et al., 2013). Or should it?

With regards to the general global trend of preferring sustainably produced goods, consumers of luxury demand more than just superior quality from products and producers (Bains 2012, Belz & Schmidt-Riediger, 2010). Greater environmental and social accountability are now becoming sought after attributes as consumers formulate preferences accordingly (Lochard & Murat, 2011). Sustainable products and production processes are thus now part of the new imperative for luxury consumers, especially as the price asked for such goods allows them to be far more demanding than in other sectors (Rucker et al., 2009). In this regard, Kim & Ko (2012) argue that luxury product manufacturers can no longer exclusively rely on the intrinsic value of their products, but they must also incorporate humane and environmental values in order to establish a lasting relationship with consumers.

Janssen et al., (2014) finds however, that in spite of the sustainability efforts observable in communication across various industries, luxury brands take risks in disclosing their CSR (Corporate Social Responsibility) engagements, suggesting that consumers do not regard luxury compatible with sustainability. Torelli et al., (2012) further add that when a luxury brand communicates its CSR activities, consumers may perceive it as contradicting – responding with lower brand evaluations and therefore overall lower consumer preferences than when the brand discloses no such information at all.

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Difference in approaches of incorporating sustainability for luxury brands can be observed with ease – luxury companies devote large sections of their websites to and issue press releases about CSR to showcase their commitment. However, engagement–types in sustainability are heterogeneous across the luxury industry. Some companies make sustainability a core aspect of their image by incorporating recycled materials, reducing waste during production and other production related processes indicate an “all–in” approach. Others choose a more reserved form of engagement, where the product and production processes themselves are not affected, but some form of contribution towards sustainability is still made, such as corporate philanthropy.

An example for the prior approach can be found in The Guardian in the case Elvis & Kresse, whose products are stocked in Harrods: “[Elvis & Kresse] make a stylish rage of high-end bags, wallets, belts and cases from decommissioned fire-brigade hoses that would normally end up in landfill.” (Elvis, J., 2011)

However, in the case of the Vivienne Westwood brand The Guardian adds, that “we read 'luxury' as placing an importance on durability, pride in buying less and better (…) Westwood recently launched a collection of bags and iPad cases in partnership with the UN and the World Trade Organisation. The project helps to create jobs amongst Africa's most impoverished women – single mothers, widows and HIV/Aids victims.”

From the presented cases it can be deducted that different forms of engagement of CSR are chosen; while Elvis & Kresse decided to incorporate recycling into their products and production processes through re-using waste and landfill materials, Vivienne Westwood created a distinctively separate product line of which’s contributions were donated towards a cause on a percentage of sales basis. In the case of Vivienne Westwood, new product lines are created apart from the original, as if to imply that sustainability does not affect the existing portfolio. The quote also allows to assume that both the original attributes of luxury and sustainability

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need to be balanced. Specifically in the case of Vivienne Westwood, durability is considered as a core attribute of luxury and is emphasised, implying that this feat remains unaffected.

The question is therefore raised: why is there a difference in how luxury brands engage in sustainability? Could this imply that the luxury brand’s company ability (CA) - a company's professional capability in producing and delivering its outputs (e.g., quality service or product (Bhattacharya & Sen, 2001)) – is in conflict with it being associated with CSR? If this is the case, does a lesser engagement in CSR, such as philanthropy in Vivienne Westwood’s CRM (cause-related marketing) initiative, which does not directly affect the product and the production process have less of an impact on core perceived luxury attributes? Would association with deeper levels of engagement, such as recycling be hurtful for luxury, but not mass-market products (Dubois et al. 1994)? Answers to these questions are still gaps in available scholarly articles at the time of the thesis, therefore are what the current research focuses on.

1.1 Research question and the gap in existing literature

As aforementioned research (Bains 2012, Belz & Schmidt-Riediger 2010, Lochard & Murat 2011) finds support for associating CSR initiatives with products and services, arguing that consumers, when possible, turn to and favour sustainable products instead of those that bear no such associations. This preference for recycled goods and/or use of sustainable production methods is so strong, that literature finds it translates into higher purchase intentions (Tien et al. 2011), furthermore willingness to pay more for such goods than a generic equivalent (Guaguano 2001, Laroche et al., 2001). Therefore, as can be expected, corporations follow this trend and shift towards a deeper integration of CSR by incorporating it not only into their products but also their production processes, essentially integrating sustainability into the core of the company (Austin, 2000). However, all of the abovementioned research is conducted

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solely on mass-market (i.e. generic, everyday) goods, and does not consider comparisons with the luxury context, therefore forgoing to examine whether findings hold under different circumstances. Recent research has begun to explore and find that even within mass-market products preferences may fluctuate not just by type of brand, but possibly be product specific as well (Hamzaoui-Essoussi & Linton, 2010).

Recent research therefore has started to question the notion that CSR has a homogeneous positive effect among different brand- and product types. Research regarding the association of CSR and luxury has found that consumers of such goods are strongly against the inclusion of product affecting CSR, such as recycling (Achabou et al., 2013) and tend to choose the non-organic option when presented with a choice, for fear of functionality loss (Janssen et al., 2014). Research has also divulged into assessing the impact of CSR on the core attributes of luxury products and has found that CSR is not preferred for products with strength (Luchs et al. 2010) or durability (Achabou et al. 2013) as their core attributes. However, none of the abovementioned research considers comparing findings against different types of CSR engagement, which is especially true for the luxury context.

What therefore drives purchase intentions and is the underlying motive in that certain types of CSR are better received by consumers in case of different goods? Is there perhaps a trade-off in consumers’ minds that allows for certain types of CSR to be more accepted for luxury, but not for mass-market? Bhattacharya & Sen (2001)’s study on the effect of CSR on consumers' company evaluations and product purchase intentions and how this relationship is influenced by CSR-CA beliefs is considered by the current thesis to be a possible solution to explain the outcome of this relationship. The study finds that consumers' beliefs about the trade-offs that a company makes between its CSR and CA (company ability) efforts (i.e., CSR-CA beliefs) can play a key role in their acceptance in product associations with CSR. Specifically, the research suggests that if a company's potential customers believe that CSR initiatives are

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typically realized at the expense of CA, then the company's CSR efforts may be counter-productive in terms of purchase intentions. The study however only considers broad sustainability efforts (e.g., domestic manufacturing instead of foreign import, workforce diversity, community involvement), and as such does not consider the luxury context, specifically how CA would be affected when associated with different levels of CSR.

Overall, at the time of the thesis, there is no knowledge of literature which compares luxury and mass-market products and studies which responds better to either peripheral (non-product affecting) or embedded ((non-product- and (non-production process affecting) engagements in CSR. Additionally, research attempting to identify potential drivers (such as CSR-CA) behind these preferences is scarce (Brown & Dacin 1997, Bhattacharya & Sen 2001). This Thesis therefore attempts to fill this gap in relevant literature and expand existing knowledge on the abovementioned.

Managerial implications through the results of the study would be the better allocation of financial resources and efforts regarding corporate social responsibility. Marketing managers of both luxury and mass-market products may have a better understanding of what sustainability strategies to pursue be able to combine the global preference of sustainable production while also ensuring CSR practices are utilised in a way that the core attributes of the products are not harmed, therefore realising no or little trade-off in pursuing CSR.

Research questions

Therefore the study’s main research question is:

“Whether and how different types of CSR engagement (embedded/peripheral) moderate the relationship between brand-types (luxury/mass-market) and consumers’ purchase intentions?”

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As a second contribution to existing knowledge, the study sought to explore the following: “In the case of luxury goods, whether and why do consumers have high purchase

intentions after associations with peripheral, but not embedded CSR?” Similarly: “In case of mass-market goods, whether and why do consumers have high purchase intentions after associations with embedded, but not peripheral CSR?”

Lastly, the current research explored whether the differing outcomes regarding purchase intentions in abovementioned associations can be explained by the level of perceived trade-off in CSR-CA. Specifically: “Can CSR-CA beliefs mediate the brand-/CSR-type & purchase

intentions relationship and explain why consumers prefer certain CSR- and brand-type associations over others?”

The thesis reads as follows: in the first section (Chapter 2), relevant literature is compared and reviewed. In the same chapter, core concepts, such as luxury, CSR and CSR-types are defined. Further, the confliction of consumer preferences for different product- & CSR-type combinations with potential drivers of these outcomes (Chapter 2.4) is discussed and relevant hypotheses are formulated. In the following section (Chapter 3), the research design and method are discussed. This is followed by the description of the variables of the study (Chapter 3.1), the pre-test (Chapter 3.2) and the description of the data collection procedure employed (Chapter 3.3). The results section (Chapter 4) discussed the reliability and testing of the data, which is followed by conclusion & discussion of the findings (Chapter 5). At the end of the thesis, references (Chapter 6) and the appendices (Chapter 7) of the relevant calculations of the study can be found.

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2. LITERATURE REVIEW & HYPOTHESIS DEVELOPMENT

Peloza & Green (2011) study the types of value CSR creates for consumers. The study finds the value created relates to the actual benefit the consumer receives from the product or service. The study identifies three values, namely emotional, social and functional as highly predictive of consumer behaviour, specifically product category usage, brand preferences and interest in specific product features (Sheth et al., 1991). While the study has an important contribution in identifying motivators of engagement in CSR for generic products in the form of the abovementioned values, it does not consider the luxury context and the potential difference in preferences for consumers this might entail.

Achabou & Dekhili (2013) test the extent to which sustainable development can be associated with luxury products and in particular study the degree to which consumers accept recycled materials in luxury products. The study finds that for luxury goods consumer preference decreases when the product is made from recycled materials, but does not if only the packaging is recycled. The study however does not consider different levels of CSR to be presented to consumers other than recycling, in order to assess whether the findings hold across a wider spectrum of CSR-engagement.

Luchs et al., (2010) also adds to the notion that luxury might be negatively affected by CSR. The article examines and compares consumer preferences towards products with strength as their preferred attribute (e.g., washing liquid, soap) and how these preferences change when the product is associated with product ethicality (sustainable ingredients). The article demonstrates that consumers prefer when higher product ethicality is associated with gentleness-related attributes and lower product ethicality with strength-related attributes. The findings state that the positive effect of product sustainability on consumer preferences is reduced when strength-related attributes are valued, sometimes even resulting in preferences for less sustainable product alternatives, ultimately coining the term "sustainability liability”.

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The study however does not consider testing findings against the luxury context, and therefore does not conclude whether the findings hold for other than mass-market products.

Janssen et al., (2014) study the effects of scarcity and ephemerality as product attributes on consumers’ perception of fit between luxury and corporate social responsibility. The study finds that when products are enduring (e.g., jewellery), a scarcely produced luxury good is perceived as more socially responsible than an ephemeral one (e.g., clothing). The findings are important they show how luxury products are judged heavily by their perceived attributes, which may also have an effect on each other. The study however does not consider any type of CSR engagement, but focuses primarily on attributes of luxury products.

Hamzaoui et al., (2010) study the price premium that consumers are willing to pay for products comprising of reused or recycled materials. They find that conventional products and recycled products do not have the same value for consumers, and find that purchase intentions are higher for product not associated with CSR. Different levels of CSR engagement and the luxury/mass-market context are not considered in the study, neither are other types of CSR engagement.

Torelli et al., (2012) study how brand concepts influence consumer responses when associated with corporate social responsibility (CSR). The study finds that conflicts among concepts (such as self-enhancement, i.e. as dominance over people & resources and openness, i.e. following emotional pursuits in uncertain directions) strongly affect brand perception, especially in the case of luxury goods, where this leads to a decline in attitudes towards the luxury brand. The study however does not cover disfluency or confliction of values on a product level and therefore does not show how changes in product attributes or association affect consumer preferences, such as attitudes towards the brand or purchase intentions.

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2.1 Luxury defined

Available scholarly literature is scarce regarding a clear distinction between mass-market and non-luxury goods, but does discuss various attempts of operationalising luxury. Based on such literature, it is implied that attributes that are associated with mass-market goods are the exact opposite of those associated with luxury products (Dubois & Laurent 1994, Kapferer, 2009, Nia & Zaichkowsky, 2000, Godey et al., 2012).

Aforementioned literature does not make a distinction between luxury and mass market goods. In attempting to define the non-luxury/mass market concept, Vigneron et al. (2004) use literature from Kapferer (1998), Dubois, Laurent & Czellar (2001) and Vigneron & Johnson (1999) to establish a high-low scale of uniqueness, perceived conspicuousness, hedonism and the perception of the product being part of the extended self. The higher a product was ranked by respondents the more luxurious, the lower the more it was deemed non-luxurious or ordinary. Generic, mass-market i.e. non-luxury goods according to relevant literature therefore are not unique or conspicuous and essentially bear the polar opposite attributes than luxury. This operationalisation therefore is done in such a way where mass-market attributes are assumed as the opposites from that of luxury ones and thus are also used to differentiate such products in the current research setting, where the impact on purchase intentions on polar opposite product/brand types is studied.

The heterogeneity across the academic interpretation of what luxury is can be explained by literature which believes that this is a result of the term’s idiosyncratic nature (Janssen et al., 2014, Kapferer, 1998), in that “what is luxury to one may just be ordinary to another” (Phau & Prendergast, 2000, pp. 123). The meaning of luxury notably depends on consumers’ own appreciation and experiences and it may even differ according to their mood (Nia &

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Zaichkowsky, 2000). Gardyn (2002) further argues that consumers’ perception of luxury varies with their socio-demographic profiles, including age, gender and level of education.

Silverstein & Fiske (2003, pp. 56) make a distinction between two types of luxury: “new luxury has been defined as products and services that possess higher levels of quality, taste and aspiration than other goods in the category but are not so expensive as to be out of reach (…)”, in contrast to “old luxury”, which is characterised exactly by the mentioned criteria. This allows room for speculation that the perception of luxury for consumers is changing. Recent studies which identify the core attributes may therefore provide insight into how luxury is currently best described and interpreted by the contemporary general public.

Examining the word itself and subsequent associations allows research to explore the roots of what "luxury" truly means for the end user and therefore potentially reveal underlying desired attributes which weigh heavily into the formation of the preferences regarding the product (Eckman et al., 1990). Two lines of literature are dominant; some emphasise tangible (Dubois, 1994, Kapferer, 2009), others psychological, intangible attributes (Nia & Zaichkowsky 2000, Godey et al., 2012) in what makes – in the eyes of the consumer – a luxury product luxurious. Identification of both of these types of attributes is essential to grasp the understanding of the concept. This is because purchase decisions are more likely to be made by weighing these attributes against each other (Eckman et al., 1990).

The following table summarises physical attributes and psychological values of luxury across literature cited in the present thesis and relevant articles, in order to identify its core characteristics.

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Table 1 Summary of physical attributes and psychological values of luxury

Attributes & values associated with luxury

Reference

Durability Achabou et al., (2013); Berthon et al., (2009);

Kapferer, (1998); Nia & Zaichkowsky, (2000); Dubois, (1994)

Good taste, class, upscale, Dubois, (1994)

High price/expensiveness Achabou et al., (2013) High quality, craftsmanship, timelessness,

long-lasting

Janssen, Vanhamme et al. (2014), Vigneron & Johnson, (2004)

Perfection, high status Park et al. (1986, 1991)

Scarcity/limited availability/exclusivity Catry, (2003); Kapferer, (2004); Kemp, (1998); Janssen et al. (2014)

Luxuriousness, opulence, quality, heritage, sumptuousness,

Dubois, Czellar, and Laurent (2005)

Symbols of consumer tastes (i.e., social salience)

Godey et al. (2012)

Tradition, power, ambition Torelli et al. (2012)

As aforementioned, a definition for luxury is not present or is not equivocally settled on in available literature. Therefore, based on the findings of cited research and considering the most frequently mentioned luxury traits within them, the current Thesis defines luxury as a concept which bears durability, high-price, high-quality, exclusivity, luxuriousness and tradition among its core attributes thus scores highly on them. Consequently, mass-market goods are considered in the current study in line with relevant literature to score low on the same attributes, essentially being the polar opposite of luxury (Kapferer et al. 1997, Dubouis 1994).

Aside from preferring the physical aspect of a product, research finds that buying luxury aids consumers in meeting psychological needs by (1) symbolizing a certain consumption

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pattern (2) portraying a specific social class or (3) by communicating meaning about their self-image and enhancing self-concept (Nia & Zaichkowsky, 2000).

However, in assessing the impact that different CSR practices have on attitudes of consumers towards luxury products, recent studies such as Luchs et al., (2010) and Janssen et al., (2014) compare only physical characteristics of products to determine consumer preference.

Luchs et al., (2010) demonstrate that product preferences depend on the type of benefit that consumers value most in that product category. The article studies the perceived product strength for sanitary products and finds that CSR is perceived as a cause for weak perceived performance. The study emphasises that products which are not associated with CSR are seen as stronger and of better quality. CSR in the study was presented to respondents in the form of implying that a product is made of organic materials. Attribution theory is identified by Luchs et al., (2010) to explain the phenomena where organic materials because of their bio-degradability were seen as inferior to “virgin” raw materials. The definition of the attribution theory according to Kelley, (1967, pp. 913) is when an individual is motivated "to attain a cognitive mastery of the causal structure of his environment (…) the individual attempts to make sense out of his environment by the attribution of causal relationships”. Luchs et al., (2010) find that as a consequence of these associations, the positive effect of product sustainability on consumer preferences is reduced when strength-related attributes are valued, sometimes even resulting in preferences for less sustainable product alternatives, coining the term “sustainability liability”. The study does not consider the luxury/mass market differentiation of products, nor does it consider different types of CSR engagement. It does however highlight the fact that product attributes play a strong role in the perception of a product.

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Janssen et al., (2014) study the effects of scarcity and ephemerality as core luxury product attributes on consumers’ perception of the fit between luxury and corporate social responsibility. The study finds that when products are perceived to be enduring (e.g., jewellery), associations with scarcity are perceived as more socially responsible than if the same association is made with ephemeral products (e.g., clothing). The findings are important, as they show how luxury products are judged heavily by their attributes and associations. An additional implication that can be drawn from the study is that CSR affects consumer preferences differently for products with different perceived attributes. The theory of efficient markets is used to explain the findings, which states that consumers value a luxury product which is presented as scarcely available, as this would infer that only the best quality materials have been used in its production (Chernev et al., 2001). This would be expected to impact the durability attribute of the product, since if it is made in limited quantities, according to the theory, the perception of the quality of the raw materials is also positive. The study however does not consider to compare different types of CSR and assess whether core attributes are affected differently by varied levels of engagement, but further highlighted the fact that luxury can be operationalised by identifying its attributes and that these attributes when associated with CSR impact consumer preferences in various ways. The following section discusses CSR, in order to better understand its different levels, types and general definition.

2.2 Corporate Social Responsibility (CSR) - A general overview

From the earlier definitions available in relevant literature, Wood (1991) gives different names for the same phenomena, such as corporate conscience, corporate citizenship or responsible business. According to Baron & Spranca (1997) and Ehrich & Irwin (2005) ethical attributes of organisations are those that reflect moral principles and that these attributes are related to a variety of social issues (e.g. fair labour, treatment of animals) and environmental issues (e.g., recycling, avoiding pollution). Frederick (1994, pp. 34) gives a similar definition,

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defining Corporate Social Responsibility as a concept which states “that business corporations have an obligation to work for social betterment.”

More recent terms literature uses to describe CSR engagement as a phenomena a corporation pursues with regards to its stakeholders which includes business ethics (BE), stakeholder management (SM), corporate citizenship (CC) and sustainability (SUS) (Schwartz et al., 2007). The increase in the terms and academia’s attempt to differentiate approaches in conducting CSR suggest that over the years sustainability has become increasingly popular in practice and as a research topic alike.

This study’s CSR focus considers research which examines consumer goods and how their product preferences changes once core attributes are associated with sustainable practices. Research in the abovementioned such as Achabou et al., (2013) and Hamzaoui-Essoussi & Linton, (2010) define CSR as an group of initiatives involving the responsibility of the corporations to reduce their environmental impact, implying this is the case both in terms of product and non-product/brand related types of engagement in sustainability. Since the current research examines the impact on consumer preferences of CSR when associated with different types of brand and their products, the current research also adopts this definition.

2.3 Classification of the types of CSR engagements

Among scholarly articles on types of CSR engagement Aguinis & Glavas (2013), Szykman (2004) and Seitanidi & Ryan (2007) are most relevant in the current research setting. The articles are among the few in attempting to coin umbrella terms and hence provide extensive listings of the different forms of engagement.

The summary of the different engagement types in CSR, their categorisation from articles mentioned in this chapter and subsequent examples thereof are presented in the following table:

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Table 2 Summary of the different CSR engagement types, their categorisation and examples thereof

Article Categorisation of types of CSR engagement

Examples of respective CSR engagements

Seitanidi & Ryan (2007) - Corporate philanthropy - Sponsorship - Cause-related marketing - Partnership

- Cash/in-kind donations (products, material, labour)

- Advertising space/time in exchange for money

- A percentage of profits made from sales are donated to a cause

- Mutual exchange of knowledge & resources or supporting a cause unrelated to the firms core operations

Szykman (2004)

- Positively tied to product sales

- Negatively tied to product sales

- Not directly tied to sales but aimed at sustaining the company’s business - Completely unrelated to

the firm’s financial operations and success

- Donations based on a percentage of profits (e.g., a credit card company donates after every usage)

- Sponsoring campaigns unrelated to operations (beer manufacturer sponsoring anti-underage drinking campaign)

- Donations not obviously tied to sales (lumber company investing in restoration) - Not associated with core business (in-kind donations of products that a firm does not produce) Green & Peloza (2011) - Philanthropy - Business Practices - Product related

- Donations of cash, promotion of a social issue, donations of products, event sponsorship, customer donations

- Environmental protection practices by companies

- Product quality, organic products, and biodegradability Aguinis & Glavas (2013) - Embedded - Peripheral

- Any engagement that uses an organization’s core competencies and integrates CSR within a firm’s strategy, routines, and operations (such as partnerships, recycling)

- Any engagement that focuses on activities that are not integrated into an organization’s routines, strategy and operations and mentions (such as CRM, philanthropy, eco-efficiency)

Seitanidi & Ryan (2007) define corporate community involvement (CCI) as the umbrella term within which corporate philanthropy, sponsorship, cause-related marketing and partnership are mentioned as engagement types between non-profit and for-profit organisations.

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The distinction between the involvements can be best illustrated along the dimensions of company motivation in- and expectation from the engagement (Seitanidi & Ryan 2007). The order of the different types of involvement in this case is significant, as the article defines philanthropy to be the most altruistic in terms of motivation and expects limited public recognition, albeit is asymmetric in kind, meaning only a one way interaction exists between the sponsor and the sponsored. At the other end of the scale partnership is viewed as the type of engagement where rewards are both tangible and intangible and may benefit both parties. The categories however lack the analysis of consumer attitudes towards these engagements.

Szykman (2004) studies specifically how cause-related marketing programs have both potential dangers and rewards for firms by investigating how consumers evaluate different types of CRM efforts when presented in the context of five different industries. Szykman (2004) identifies different CSR campaigns based on how easily consumers could infer profit-driven motives through them. Therefore four classifications are created in the article; positively tied to product sales, negatively tied to product sales, not directly tied to sales but aimed at sustaining the company’s business and CSR which is completely unrelated to the firm’s financial operations and success. Szykman (2004) shows similarity to Seitanidi & Ryan (2007) in terms of CSR categorisation (e.g., “negatively tied to product sales” can be perceived as philanthropy) but the definitions and categorisations measure the outcome of the CSR in the consumers’ perceived altruism of the firm’s motives. Therefore product sales and financial outcomes are not studied. Furthermore, the research does not consider the luxury/mass-market context, nor different types of CSR engagements in assessing consumer preferences other than cause-related marketing. The classifications of CSR are broader than that of Seitanidi & Ryan (2007), but still have a similar understanding of the different types of CSR engagement. Szykman (2004) therefore takes a step further in creating umbrella terms which differentiate between engagement types and asses their outcomes regarding consumer preferences.

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Peloza & Shang (2010) study and group CSR types after conducting a meta-analysis comprising of over two hundred articles of different engagement types. The study finds and groups CSR activities into three broad categories: philanthropic, business-practice related, and product-related. The study identifies philanthropy as the most frequently studied CSR engagement, with cause-related marketing being the most frequent type of philanthropy and defines it as an engagement type where a charity donation is linked to commercial exchange. The second category comprises CSR activities that include those related to the business practices of the firm, such as pursuing fair trade practices, promoting employee diversity and environmental protection. Peloza & Shang (2010) state that environmental protection can be pursued both as a business practice unrelated to and as a part of the production process and strategies of the firm. This is the distinct difference between the second and the third category, product-related CSR, where practices are directly incorporated into the product by means of recycling, residue free manufacturing or by producing sustainable packaging (Peloza & Shang, 2010).

Lastly, perhaps the most encompassing definition of CSR engagement types is given by Aguinis & Glavas (2013), who define two group expressions of the types of engagement, namely embedded and peripheral. Literature on other definitions and comparisons thereof regarding peripheral and embedded CSR are scarce and tend to cite the former article and as such academia believes that the said article provides a milestone in attempting to do so (Smith & Bartunek, 2013, Pavlos et al., 2013).

Aguinis & Glavas (2013) define embedded CSR as an engagement type which relies on an organization’s core competencies and integrates CSR within a firm’s strategy, routines, and operations. The same article states that in order for CSR to be considered embedded, it needs to be part of the organization’s strategy, more broadly in forming of its daily routines and operations. Embeddedness by its nature is context-specific, because the organization needs to

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build on its unique core competencies to successfully implement this type of CSR (Aguinis & Glavas, 2013). In contrast, peripheral CSR is one that focuses on activities that are not integrated into an organization’s routines, strategy and operations and mentions philanthropy and cause-related marketing as defined by Seitanidi & Ryan (2007), Szykman, (2004) as examples.

Contrary to this grouping of CSR engagement types, Mishra et al., (2013) argue that CSR cannot always be considered exclusively embedded or peripheral. The study criticizes Aguinis et al., (2013)’s classification of embedded and peripheral to be inconsiderate of other factors, arguing that even an embedded CSR process may have multiple levels that should be considered. For example, Nike’s attempt to use recycled materials in its shoes and clothing would be considered embedded CSR as it integrates a social responsible action (recycling) directly into the production process. Nike also takes old shoes and recycles them into a material they call ‘‘Nike Grind’’ that can be used to make sports surfaces such as basketball courts. Yet, at the same time, Nike is considered by many to be a socially irresponsible company because of its heavy use of sweatshop labour in its production process (Banerjee, 2007, Shaw, 1999). This argument shows that although recycling is incorporated into the production process and could therefore be considered embedded, the fact that sweatshop labour is used undermines the fact that sustainability is truly incorporated into the company’s strategy and as such rendering it to be peripheral.

Overall, embedded and peripheral CSR can be used to give the most holistic view on the impact CSR has on consumers’ product perception for luxury goods, as embeddedness stands for the highest level of engagement in CSR in terms of integration into the firms’ product and production processes, while peripheral encompasses more detached levels of engagement, such as philanthropy, cause-related marketing and different types of sponsorship. Therefore, these two terms are used in the thesis to differentiate product- and process related (embedded)

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CSR and CSR which is unrelated to these (peripheral) and perhaps even to the core profile of the company.

In terms of the current research, this raises interesting questions. Bains (2012), McWilliams et al., (2011) firmly agree that corporations are implementing more and more sustainability into their products and production, however the luxury industry’s core competences are not tailored around sustainability (Dubois, 1994, Kapferer, 2009) and often come into conflict with desired consumer preferences of a product when it is attempted (Achabou & Dekhili, 2013). The costs therefore of attempting to follow global trends and strive to embed CSR for a luxury brand, irrespective of the issue of internal or external value alignment can be so high that they may put the entire firm at risk (Aguinis & Glavas, 2013).

2.4 Conflicting consumer preferences of brands’ engagement in CSR

2.4.1 CSR-CA beliefs

Academic literature is in agreeance that contemporary companies make an effort to present themselves to be capable of meeting product quality expectations while doing good at the same time. With available research expanding in this field, close attention is being paid to what has been coined as Corporate Ability (CA) and Corporate Social Responsibility (CSR) beliefs (Brown & Dacin, 1997).

Lin et al., (2011) define CA (corporate ability) as a company's perceived expertise and competency, such as the ability to provide the expected quality of an existing product (or service). Literature has found that these two characteristics (i.e. CA & CSR) are critical factors during the communication between the customers and their product or service providers (Becker-Olsen et al., 2006, Berens et al., 2007, Sen & Bhattacharya, 2001).

According to Lin et al., (2011) companies apply different strategies to present their product or service in a favourable light, such as associating CSR in various ways with their image in order to boost purchase intentions during such communication with customers. This

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is thought to be because customers' different types of associations with a company have different influences on their product or service evaluation (Berens et al., 2005, Sen & Bhattacharya, 2001). Overall, previous literature finds that these associations with a company's CA and its CSR engagement dominate product or service evaluations (Brown & Dacin, 1997), ultimately affecting purchase intention and its mediators (Marin & Ruiz, 2007).

Bhattacharya & Sen (2001) study when, how, and why consumers react to CSR and the mechanisms governing the underlying responses of these reactions. The study examines how companies’ engagement in CSR, the consumers' personal position and their general beliefs about the trade-offs companies make in supporting CSR initiatives’ affect the evaluations of the company and its products. Findings show that CSR initiatives can, under certain conditions decrease consumers' intention to purchase. Specifically, it is stated that CSR initiatives in a CA-relevant domain will increase consumers' purchase intentions regardless of their general support for CSR or of product quality.

This phenomena is best explained by social identity theory, which is defined as individuals' positive feelings about a service firm that satisfies the need for identity similarity (Grégoire & Fisher, 2006; Johnson & Morgeson, 2005). Bhattacharya et al., (2001) explain that social identity theory can be used to suggest that people are more likely to identify with an organization when they perceive its identity to be enduring, distinctive and capable of enhancing their self-esteem. The study further explains that a company's character as revealed by its CSR actions is not only fundamental and relatively enduring but also makes it distinctive by virtue of its disparate and idiosyncratic bases (e.g. sponsorship of social causes, environmentalism). In the context of the current thesis this implies that consumer satisfaction is gained once a company is able to pursue a CSR engagement that fits with its identity, creating a win-win situation where both the environment and the consumers’ perception of identity

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similarity benefits. The opposite, where a type of CSR in perceived as incompatible with prior beliefs of the company would cause a trade-off in CSR-CA beliefs.

In summary, Bhattacharya & Sen (2001) find that if consumers believe that CSR initiatives are undertaken at the expense of CA (i.e. result in a trade-off), preferences regarding the produce and subsequent purchase intentions may decrease as a result. Such adverse effects are particularly likely to hurt sales when consumers do not believe that the company's CSR efforts enhance CA and that its ability to produce products are hindered as a result.

Bhattacharya & Sen (2001)’s research, although not explicitly mentioned is conducted in a mass-market good context, where only a high- vs. low quality distinction between the products is made. Based on the results of the research, it can be expected that associations with CSR for mass-market goods would not hinder perceptions of CA, as it is becoming more an obligation than an option for producers of such goods to have such associations with their products and processes, if higher purchase intentions are desired (Guaguano 2001, Tien et al. 2001). Incorporating CSR with products and production processes would therefore not only be in keeping with global trends (Austin 2000), but would also – based on social identity theory – cause people to better identify with the organisation. The research however does not consider the effects of when CSR is not heavily incorporated into the product, therefore causing the company not to be aligned with global trends and consumer expectations of the extent mass-market producers should embrace CSR. Specifically, the study does not consider whether a lesser (peripheral) engagement in CSR would results in a lower level of identification with the company as opposed to a more all in, embedded association, thus not considering to compare different levels of CSR engagement.

In addition, it is uncertain whether the findings would hold in the luxury context, therefore whether a luxury company can engage in CSR without it being perceived as making a trade-off for any of the luxury attributes (listed in chapter 2.2). Similarly, whether such a

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perceived trade-off in CA would result in decreasing purchase intentions remains unclear. However Bhattacharya & Sen (2001)’s research allows to assume that CSR-CA beliefs could mediate the brand-, CSR-type and purchase intention relationship in that a perceived trade-off of CSR-CA beliefs would in turn cause purchase intentions to also be lower, compared to a “win-win” situation, when purchase intentions would be higher.

According to Peloza et al., (2010), the broad array of CSR activities give indication to the fact that not all types of engagement would be viewed equally. Campbell et al., (2007, pp. 950) states that: “socially responsible corporate behaviour may mean different things in different places to different people and at different times, so we must be careful in how we use the concept”. Therefore it can be assumed that different forms and levels of engagement in CSR yield different results in terms of consumer preferences and consequently purchase intentions. Consumers may view one CSR activity positively and hold a negative opinion of another (Aguilera et al., 2007).

2.4.2 Mass-market goods associated with CSR

As a general trend in contemporary consumer preferences, sustainable production is valued by consumers (Bains, 2012). Additionally, Luchs et al., (2010) find evidence that consumers view sustainable products positively to the extent that it translates into increased purchasing behaviour, e.g. choosing environmentally friendly products over equivalent non-environmentally friendly counterparts. Literature (Tian et al., 2011, Laroche et al., 2001,

Christodoulides et al., 2010, Belz & Schmidt-Riediger, 2010) is adamant that generic products benefit from being associated with CSR, so much so this translates into increased purchasing

behaviour and higher willingness to pay. Guagnano (2001) finds that the vast majority of respondents of conducted surveys are willing to pay more for a household product made from recycled materials. Building on this finding, Smith et al., (2010) coin the term “positive ethical consumerism” when consumers express a preference for brands deemed to be more ethical.

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Furthermore consumers, who show a high level of awareness and trust towards CSR are more likely to transform a good CSR record into positive corporate evaluation, product association and higher purchase intention as shown in the findings of Tian et al., (2011). This trend has been confirmed in food production (Govindasamy & Italia, 1999) as well as for non-food products (Laroche et al., 2001), where it as was found that consumers were willing to pay more for sustainable sourcing.

Contrary to this notion, Hamzaoui-Essoussi & Linton (2010) state that although consumers might feel very positive about green products in general, it is believed that this preference is product-specific and varies across different product categories. The study concludes that based on consistency theory, consumers are willing to buy environmentally-friendly goods only if they are equivalent in defining characteristics to those of conventional products (Domina & Koch, 1998). Based on Hamzaoui-Essoussi & Linton (2010)’s findings, it can be assumed that if there is a change in associations regarding the product in terms of different types of CSR engagement, consumers will perceive change in the product itself, which leads to lower preferences and lower purchase intentions.

Austin (2000) finds that the usage of types of engagements in CSR are shifting from philanthropic relationships between the businesses and NPOs (e.g., philanthropy) to a transactional stage (e.g., sponsorship, CRM, licensing and paid service arrangements). This suggests that consumers are increasingly favouring deeper levels integration in CSR, therefore it is now increasingly becoming part of the corporate practices and production processes. Using the CSR-type categorisation terminology of Aguinis & Glavas (2013), recycling, an embedded CSR engagement-type that therefore has a direct effect on the product and production process (Aguinis & Glavas, 2013) would be expected to be welcomed by consumers when associated with mass-market goods. Recycling is also the most frequently associated embedded type of

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CSR in academia (Peloza & Shang, 2010), therefore it will also be used to operationalise embedded CSR in the study.

Since aforementioned research in the chapter considers exclusively the mass-market context in regards to brand- and product associations to CSR, expectations regarding such an interaction can be considered sufficiently accurate. Therefore, it can be expected based on reviewed literature that embedded engagement types in which CSR directly affects the product and production processes (e.g., recycling, residue-free production processes) are preferred by consumers over those that do not, i.e. peripheral types of engagement (e.g., cash donations, charity events). Contrarily, but building on the findings of reviewed literature, if consumers believe that a producer of mass-market goods does not commit to engage in embedded, but rather chooses to pursue peripheral CSR, purchase intentions should decrease. The reasons (and possible mediations) regarding the outcome of this relationship between a mass-market product and different types (embedded/peripheral) of CSR can be predicted based on social identity theory and ultimately the level of perceived trade-off in CSR-CA (discussed in Chapter 2.4.1) by consumers.

This is expected because under social identity theory (in the context of mass-market goods associated with peripheral CSR) consumers should feel that if a company is not keeping up with the global trends of aiming to integrate CSR into product and production processes (Austin 2000), it is an outlier thus this should in turn decrease the level of identification with it. Therefore, in terms of perceived CSR-CA trade-off, consumers are expected to perceive that if a company does not keep with global trends, it lacks expertise, technology or other components of the company’s ability (CA) to produce goods, ultimately resulting in a higher trade-off. Consequently, the higher trade-off in CSR-CA is expected to cause the decrease in purchase intentions which otherwise would not be present (i.e. a smaller trade-off is expected) if the same mass-market company pursued embedded CSR.

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Hypothesis 1a: Purchase intentions are higher for mass-market goods if associated with embedded- compared to peripheral CSR engagement.

Hypothesis 1b: This relationship mediated by CSR-CA beliefs.

2.4.3 The confliction of embedded CSR and luxury

Durability, high quality, high-price, exclusivity and luxuriousness are cited by relevant literature (see Chapter 2.1) as the core defining attributes and characteristics of luxury goods that set them aside from ephemeral (mass-market) products (Dubois et al., 1994). These are also the main attributes to come under scrutiny when luxury products are involved in sustainable production methods and in specific, recycling (Achabou et al., 2013). Wolny et al., (2011) add that recycling can be seen as a direct threat to the company if found by consumers to conflict with the existing company image, also mentioning additional costs as an issue if the products are not already ‘designed for environment’.

Torelli et al., (2012) study how luxury brand concepts may influence consumer responses to corporate social responsibility. The study considers two dimensions underlying four broad values, based ten of Schwartz (1992)’s theory of human values. In the first dimension, the study contrasts the brand concepts of openness (following emotional pursuits in uncertain directions) and conservation (protecting the status quo) with CSR, but finds no decline in brand evaluations. However, in the second dimension, the study finds that a luxury brand’s self-enhancement concept (dominance over people and resources) is in conflict with CSR’s self-transcendence concept (protecting the welfare of all), ultimately leading to a decrease in brand evaluations. Torelli et al., (2012) points out that abstract concepts are important in consumers’ evaluations of the luxury brand and should these come under conflict (e.g., in the instance of differentiation based on the promotion both of the luxury concept and the CSR

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agenda), disfluency occurs and results in lower evaluations. In terms of the current research, the study allows to assume that CSR may impact the luxury concept negatively, although it is not certain if in certain instances confliction does not occur. For example, a peripheral form of engagement may not impact core concepts negatively or to the extent that this causes disfluency, while embedded CSR (a higher, more integrated level of CSR) might.

Achabou et al., (2013) in their experiment test different levels of recycling (by definition “a collective term for recovery as well as the utilization of secondary material…”, Van Beukering et al., (2011, p. 345) in a luxury product to show changes in consumer preferences. Three levels are tested: 1) no recycling present, 2) 30% and 3) 70% of the product being recycled. In the study consumer preferences regarding a “Hermés” luxury clothing good were negatively affected when there were versus when there were no “green processes” involved. It is found that associations with recycling lessen the validity of the durability feature and undermine the previously positively perceived product. The same research studies the extent to which sustainable development can be associated with luxury products and in particular the propensity of consumers to consider recycled materials in luxury products. Overall, Achabou et al., (2013) cite Auger et al., (2008) in emphasizing that an underlying reason for consumers not wanting to purchase recycled luxury products is because they do not want to sacrifice desired attributes such as durability in favour of the ethical attribute. Achabou et al. (2013) find gender and age a significant control variable, specifically that younger women are more open to purchasing luxury products made from recycled materials. In terms of the current research, this finding allows to also consider a product level in terms of luxury being associated to CSR. Additionally, based on the article, since alternating levels of recycling in luxury score differently in terms of consumer preferences, a difference between different levels of CSR engagement in the same context may also be expected.

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In terms of peripheral CSR, (i.e. a non-product and process affecting engagement type), philanthropy is identified by relevant literature as the most frequently studied CSR engagement, with cause-related marketing being the most frequently used type of philanthropy (Peloza & Shang, 2010). This form of engagement type according to Aguinis & Glavas (2013)’s definition would be peripheral, as it does not concern the product and production process. In light of the abovementioned, CRM (cause-related marketing) is therefore used to operationalise peripheral CSR in the current research as well. Aguinis & Glavas (2013) define CRM as an engagement-type where the charity donation is linked to commercial exchange (i.e. after each product purchase a percentage of sales is donated to a cause).

As a result of aforementioned research in the chapter (Achabou et al., 2013 & Torelli et al., 2012) considering exclusively the luxury context in regards to brand- and product associations to CSR, further assumptions regarding such an interaction can be considered sufficiently accurate. Therefore, it can be expected based on reviewed literature that peripheral types of engagement in which CSR does not affect the product and production processes (instead supporting CSR initiatives with e.g., cash or in kind donations) of a luxury company are preferred by consumers over those that do affect it, i.e. embedded ones. Similarly, if a producer of luxury goods commits to incorporating CSR into the product and production processes purchase intentions should be lower. The reasons (and possible mediation) regarding the outcome of this relationship between luxury and the different types (embedded/peripheral) of CSR engagement should be able to be predicted by social identity theory and ultimately the level of perceived trade-off in CSR-CA (discussed in Chapter 2.4.1) by consumers.

Regarding social identity theory, consumers have been shown by luxury research literature to place a large emphasis on emotional and social values (Goldstein et al., 2008). Additionally, some emphasise tangible (Dubois, 1994, Kapferer, 2009), others psychological, intangible attributes (Nia & Zaichkowsky 2000, Godey et al., 2012) in purchasing motivations

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(discussed in Chapter 2.1). It is expected therefore that should core luxury attributes come under perceived scrutiny through association with embedded CSR engagement purchase intentions will be lower because of the hindered ability of consumers to identify with the organization as they should no longer find its identity to be enduring, distinctive and capable of enhancing their self-esteem. This is expected to happen to a lesser effect, or not at all for associations of luxury with peripheral CSR, as no changes in identity or capability to enhance self-esteem should results from the company conducting a charitable act that does not entail alterations to the product or production process. Therefore, in terms of the perceived CSR-CA trade-off, consumers are expected to perceive that the a luxury company makes a high trade-off of CA if it engages in embedded CSR as traditional, high-quality production processes and high-quality virgin materials in products will be replaced or changed to less wasteful production processes and more sustainably sources materials. Essentially, this would be expected to cause a dissonant image in the mind of consumers’ and be the cause of lower purchase intentions. Consequently, a lower trade-off in CSR-CA is expected if the product and production processes are perceived to remain intact, which is the case if the company pursues peripheral CSR, ultimately resulting in higher purchase intentions.

It is expected therefore, that:

Hypothesis 2a: Purchase intentions are lower for luxury products if associated with embedded- compared to peripheral CSR engagement.

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Figure 2 Theoretical model

Luxury/ mass-market Purchase Intentions Peripheral/Embedded CSR CSR-CA beliefs

Figure 1 Theoretical model

Peripheral CSR Embedded CSR

Luxury Mass Market

Purc has e Int ent ions

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3. RESEARCH DESIGN

The research attempts to determine how and why different types of CSR when associated with different product-types impact purchase intentions by employing a deductive approach. The data is obtained by presenting respondents with a questionnaire in the form of a survey-based experiment. The survey design is a frequently used technique concerning data collection (Field, 2009). The main advantage of the said design is that it allows for the collection of large amounts of responses and that it is relatively quick to administer. Additionally, experimental research is the most appropriate way for drawing causal conclusions, regarding interventions or treatments and in establishing whether one or more factors causes a change in the outcome (Campion et al., 1991).

Overall, a survey-based field experiment with different scenarios is done to test the presented hypotheses. The design of the experiment is a 2 (luxury/mass-market) x 3 (peripheral/embedded/no-CSR condition), between-subjects design.

3.1 Measures

3.1.1 Independent variables – Brand-type

The fictitious brand name of “Zsofi Fashion” is used in order to not skew responses to either mass-market or luxury based on prior cues of association. This was changed from “Lilienne Eastwood”, a fictitious name previously used in the pre-test, as the resemblance to Vivienne Westwood was deemed too apparent.

To operationalise luxury the thesis uses “clothes & accessories” as a product category, for the reasons that 1) being associated with sustainability, luxury clothing products may likely come under consumer scrutiny and 2) both men and women can easily imagine the scenarios presented, as they are likely to be real-life consumers of such goods. This is in accordance with

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the study conducted by Achabou et al., (2013) and Janssen et al. (2014) on assessing luxury perception.

In order to distinguish between mass-market and luxury a 7-point Likert-scale (1 = Strongly disagree, 7 = Strongly agree) was used. An attention check in both the pre-test and final questionnaire was administered with the question: “Based on the company description I read, I associate the following characteristics with Zsofi Fashion items”, of which’s items were 1) durability, 2) high-price, 3) exclusivity, 4) high-quality and 5) luxuriousness. Luxury items were expected to score higher, while mass-market to score lower on the scale. Items of Dubois et al., (1994) were used.

Luxury manipulation

The luxury texts were developed to incorporate attributes of luxury identified by relevant literature (see chapter 2.1). Therefore, specific items (in order of appearance) in the text were luxuriousness, tradition, high-quality, exclusivity, and high-price. The same items were also included in the attention checks of in both the pre-test and the final questionnaire, to ensure that texts were interpreted as intended (see Chapter 4.1. for detailed results).

Mass-market manipulation

According to the findings of relevant literature, mass-market goods – absent an encompassing definition – can be considered as the opposite of luxury (Vigneron et al., 2004, Kapferer (1998), Dubois, Laurent & Czellar 2001, Vigneron & Johnson 1999). Therefore, the mass-market scenario aimed at displaying the antonyms of the same attributes used for the luxury condition. Therefore, specific items (in order of appearance) in the text were commonness, non-tradition bearing, mediocrity, non-exclusive and low-price.

Below are the luxury and mass-market scenarios presented to respondents during the final questionnaire:

Corporate social responsibility : a double edged sword?

Master Thesis MSc.

Business Administration