Antecedents and Consequences of Socially Responsible Brands: A Focus on
Firms Offering Controversial Products by
Suraksha Gupta
Suraksha Gupta is a Senior Lecturer of Marketing and Strategy at Kent Business
School, University of Kent, UK. Email: Suraksha.gupta@gmail.com
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Abstract
Researchers on social responsibility and brand reputation of firms offering controversial products that are harmful in nature have, till now, yielded inconsistent results. Although literature recommends social behaviour as one of the determinants of reputation, it fails to satisfactorily identify the factors that would particularly enable a brand offering controversial products to be recognized as a socially responsible brand. Authors use the inductive approach to examine existing research and review anecdotes to build a conceptual model, which identifies factors to be considered for facilitating recognition of a brand offering controversial products such as tobacco or gambling as a socially responsible brand. In addition, the role of business customers of the brand is also reviewed to understand if they can moderate the causal relationship between the socially responsible image of the brand and brand reputation. Guidelines for future research on the propositions made are provided in this paper.
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Introduction
A business can be considered controversial due to various reasons (Cai et al. 2011).
Some of these reasons are the type of raw material used to manufacture the products, illegitimate practices adopted by managers, waste produced as a result of production or risk involved in activities of a business. For e.g., mining, production of medicines, use of animals for research etc. (Gardner 1996; Lantos, 2001) However, vulnerability of humans to the after effects of the usage of products plays a role in the assessment and evaluation of the firm offering those products. Products, which are evaluated negatively by the society because they make users vulnerable in any way, are considered to be controversial in nature (Smith and Cooper –Martin, 1997). Such products have been studied by various disciplines such as business, health and law
(Bradford et al., 2005; Kilberth, 2010; Becchetti and Trovato, 2011). Anecdotes and empirical business research indicates that multi-million dollar industries offering controversial products give better returns to shareholders in comparison to traditional industrial activities (LBO Report, 2004; Pinguelo et al., 2010). Although firms operating in such sectors are not allowed to use ‘pull’ based marketing strategies, they have successfully demonstrated that this sector can create higher value for shareholders based on the demand of their products in the consumer segment (Rein
1996; Kesselheim and Outterson, 2011). While products of such industries are quite regulated and legal, factors such as low level of acceptance of their products by certain sections of the society, i.e., not favourably consented by the society, and the overall effect of products on consumers’ life, i.e., long-term effects on health of users, does not allow these companies to use their products as a value based marketing tool
(Chaudhry and Walsh, 1995; Milne and Patten, 2002).
Individuals and external firms also try to distance themselves and do not
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express much interest in associating themselves with businesses offering controversial products due to the negative reputation of products offered by them (Tsalikis and
Fritzsche, 1989; Hanson and Logue, 1998). It has been noticed that shareholders of supplier companies who earn high returns from supplies they make to firms offering controversial products also try to push their managers to stop being a part of the delivery process of harmful products. For e.g., shareholders of Kimberly Clark are reported to push the company to stop supplying paper and sheets made from the processed tobacco to cigarette manufacturers (Davidson, 2003). The long-term effect of products from controversial sectors also leads to the development of self-related concerns in the unconscious minds of consumers (Deshpande and Webster, 1989;
Conchar, 2004). Their concerns push companies to deemphasize on the product during promotions and instead focus more on development of a corporate brand that is socially responsible (Mohr et al., 2005).
While the notion of corporate social responsibility highlights the need for businesses to develop a reputation of being socially responsible, it is highly challenging for managers to overcome the social taboos associated with the products from controversial industry sectors (Palazo and Ritcher, 2005). The challenge in marketing such products is to demonstrate value through activities and initiatives while dealing with unethical and unsolicited practices associated with the reputation of products as the product cannot be used by managers for marketing purposes
(McWilliams and Siegel, 2001). Literature indicates that such companies drive the perceptions of stakeholders towards legitimate practices followed by them and manage their reputation by involving themselves in socially responsible activities
(Lantos, 2001). Authors have reviewed existing knowledge about firms offering controversial products, brand development, reputation management and corporate
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social responsibility to understand how brand managers use different viewpoints to ethically legitimize their business activities and manage an image of being a socially responsible brand. Since the context is brand and not corporation, this research contributes to the understanding of brand management by firms offering controversial products based on a nexus that philosophically integrates moral, emotional, and rational requirements of businesses aiming to be recognized as socially responsible.
Considering that brand managers are not the sole authors of brand image and management of a business is a very dynamic process, a conceptual framework that identifies antecedents and consequences of building socially responsible brands is presented (Figure 1) and areas for future research are discussed here.
Research Motivation
Research indicates that both individuals and firms prefer to be associated with corporations that operate in reputable industrial sectors such as finance, technology or environment instead of a company from a controversial industry like alcohol
(Charlton, 1999; Jacobs, 1999). The literature on human resources supports this school of thought for individuals as employees with an argument that the kind of firm an individual associates with in the initial phase of its career development, influences the type of companies that can become his or her future employer (Taormina, 1997;
Martin et al., 1998; Billett, 2000). Business-to-business literature also indicates that the reputation of the manufacturer firm influences the image and performance of its business customer firms (Doney and Cannon, 1997; Gounaris, 2005). Our concept of brand reputation goes beyond brand image as it considers reputation to be a concept that keeps changing based on the actions of the firm (DeChernatony, 1999). This
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makes it important for researchers to understand the reason for individuals or companies not wanting to associate with brands offering controversial products.
Primary reason as per secondary information is the nature of products. Academic research justifies the aversion of individuals and firms to be associated with a firm offering controversial products, but fails to provide a solution to the problem faced by managers using a brand for offering products that are controversial in nature.
What do we mean by Nature of Products
Nature of products has been discussed in academic literature from different perspectives. Lee et al. (2011) referred to the characteristics of a product while discussing its inherent qualities as nature of products. Smith (1956) adopted an economic view of demand and supply of a product to discuss nature of products as an important criteria used by managers while selecting the channel for its distribution.
The nature of products as per Waller (1999) means inborn features of a product. Fahy et al. (1995) explained these products as not only unacceptable to the society but also harmful to the users. Products considered controversial in nature are such that when used they either cause harm or reflect on the indecency of the user (Rehman and
Brooks, 1987). Aversion of consumers to controversial products is based on factors such as a risk to the health or reputation that discourage them with a fear that usage will make them vulnerable to crime, death, family dysfunction, social exclusion or diseases (Waller, 1999). Products considered controversial have also been termed as socially sensitive products by authors such as Shao and Hill (1994). Study by Shao and Hill (1994) reflected on the reputation of the agency that was managing marketing activities of controversial products as products not accepted well by its other customers.
Stakeholder viewpoint recommends that firms offering products controversial
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in nature should build a reputation of being a responsible business through actions that influence the credibility of both individuals and firms that are associated with it as shareholders, employees, consultants, vendors, suppliers or business customers, i.e., (Rao et al., 1999; Rust et al., 2004). Waller (2005) studied controversial products from marketing perspective and found that customers find marketing of these products very offensive and socially irresponsible. Ethical dimension was studied as product harm and consumer vulnerability by Jones and Middleton (2007).
Their findings reflected how actions and activities adopted by companies facilitated assessments and evaluations of product harm and self vulnerability by the users. The central problem addressed by this research is how can companies offering products that are controversial in nature can integrate the focus of their different activities and actions to develop a brand that is considered socially responsible. A socially responsible brand provides confidence to the customers about the intentions, integrity and conduct of the firm. The premise of this article is about products considered controversial by nature, e.g., addictive drugs, alcohol, weapons or from the gambling industry etc. While consumption of controversial products mentioned previously destroys developmental prospects of humans, they defend business interests of producers (Mathieu and Dearden, 2006). In this context, our focus while discussing the nature of products will be upon the features that make the product unacceptable due to the harm they cause when utilized or negatively affect the reputation of the user (Waller, 1999).
Reputation and Controversial Products
Reputation plays an important role in the positive acceptance of products by customers and constructive acknowledgement of activities of the firm by those
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associated with it for business (Parkhe, 1998; McDaniel and Malone, 2009). Firms offering controversial products struggle to manage their reputation due to the negativity involved in the usage of their products (Carrigan, 1995). To alter this negativity, they incorporate the philosophy of social accountability into their emotional and commercial agenda so that they can develop the reputation of being a socially responsible firm (Simon, 1991; Kapelus, 2002). Commercial activities, for e.g., the production setup of controversial products when analysed in this light, highlights that the manufacturing setup of products from this industry sectors are generally located in underdeveloped regions or countries (Bello and Rosenfeld, 1990).
While firms use the resources available in the backward areas for commercial reasons, they focus on promoting and developing these under developed areas through their social initiatives (Shrivastava, 1995). Social initiatives guard business interests of these firms and also act as shields for managing the negativity that influences its reputation in a community at the emotional level (Karkkainen, 2001).
Creating an emotional bonding with customers by firms offering products with a negative reputation requires managers to repeatedly remind their customers about the social initiatives a firm takes to fulfill its responsibility towards the community
(Humphries, 2000; Luo and Bhattacharya, 2006). Managing socially responsible reputation requires a conduct of accountability to be reflected in the actions of both the manufacturing firm and those who are associated with it for the benefit from the nature of its business (Lantos, 2001). Social orientation in the actions of the firm leads to development of the community, which further strengthens its reputation as a responsible business and benefits the manufacturer and the associate firms (Leger and
Nutbeam, 2000). Research on corporate social responsibility recommends a
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demonstration of concern towards the overall environment and employees as important elements of responsible business practices (Schutter, 2008).
The concern of the firm towards the social issues faced by the local community and its behaviour of integrity and accountability through self-regulation are also considered to be highly important for creation of emotional bonding based reputation by firms from controversial industry sectors (Crane and Kazmi, 2010).
Though emotional aspects based on social initiatives do not have a direct impact on financial performance, i.e., on the purchase intention of customers, they create a differentiation by building a reputation that influences customers at the emotional level while they make purchases (Gupta and Pirsch 2006). However, managing favourable reputation based on the reputation of being socially responsible becomes a problem for firms whose core business functions like production and supply chain are managed by external associations or its business customers at remote locations
(Holbrook, 1999). It becomes even more important for such manufacturers whose products are sold through a business-to-business network of business customer firms
(Kumar, 2004). For firms offering controversial products through the business-tobusiness market and seeking to develop a favourable reputation, involving business customers through the use of a brand becomes very important (Laufer, 2003). While business customers play an important role in the achievements of commercial objectives of the firms, brands enable manufacturers to efficiently communicate their social initiatives to their target segment and create stronger linkages at the emotional level (Ostrom et al., 2010).
The corporate brand management practices provide assurances to consumers and business customers about intentions and commitment of the firm to add value to their requirements (Lumsden and Fridman, 2007; Ringold, 2008). Brand orientation
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enables manufacturers to use ‘push’ based marketing strategies and address issues linked with the promotion of products offered by the manufacturer (Ringold, 2008;
Wilkie and Moore, 2003). In the case of controversial sector companies, a corporate brand enables managers to attract small and medium enterprises to be associated with them in a business relationship as its business customers (Bennett, 1997; Bloom,
2001). For promoting controversial products through ‘push’ based promotions, relationship based marketing strategies have also been reported to be successful strategies for managing business-to-business markets by manufacturer firms (Wilkie and Moore, 2003). Bloom (2001) reported effect of push based relationship marketing strategy on the efficiency of the brands owned by manufacturers operating in controversial industry sectors.
Marketing literature acknowledges the role of business customers in building a reputation, which is an important facet of the overall value contributed by a company to its associations who are either individuals or firms and are associated with the business for psychological or financial gains (Yoon et al., 1993; Ulaga and Eggert,
2006; Siltaoja, 2006). However, existing literature has not been critiqued to explain the contribution of business customers in nullifying the effect of the harmful nature of controversial products offered by a corporate brand. According to current research, in order to nullify the effect of harmful nature of their products, manufacturers of controversial products should take up socially responsible activities (Schuck, 1994).
Such actions demonstrate the concerns of the manufacturer towards the society
(Carrigan and Attalla, 2001) and reflect on the efficiency of business standards adopted by the manufacturer (Weaver et al., 1999). As per Du et al. (2007) integrating socially responsible activities into core business activities builds a reputation that can drive the responses of consumers and business customers towards
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products not highly desirable.
While literature recommends actions that demonstrate corporate social responsible behaviour of the firm for building a favourable reputation (Becker-Olsen et al., 2006; Maignan and Raltson, 2002), there is a lack of understanding about the kind of actions that the manufacturer of controversial products and its business customers should jointly undertake to build their brand’s reputation of being a
‘socially responsible brand’. Academic literature does not report how manufacturer firms offering controversial products can develop a socially responsible brand. To fill this gap in the current literature, authors have reviewed current academic knowledge about socially responsible brands and the role of business customers in building brand reputation from the context of firms offering controversial products for creating a research agenda and identifying avenues for future research. The agenda thus created is based on a synthesis of arguments from various disciplines such as management, business ethics, corporate governance and corporate social responsibility in the form of a conceptual model and reflects on their relevance to marketing (Figure 1).
Following sections discuss the arguments developed and make propositions based on a description of the constructs on which the conceptual model is based.
<Insert Figure 1 about here>
Literature Review and Research Propositions
The economic view of a business suggests that every activity taken up by a firm and its associates should be focused towards improving consumption and making profits
(Hofer, 1975; Vargo and Lusch, 2004) while the notion of branding takes up the stakeholder view and recommends that firms should behave responsibly and pay
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attention to their actions (Robin and Reidenbach, 1987; Mohr et al., 2001).
Managerial actions oriented towards efficient management of businesses can lead to outcomes that can make a brand develop perceptions of being irresponsible due to various reasons (Garriga and Mele, 2004). Some of the reasons can be flawed business practices, business viability, imperfect business processes or inadequate understanding of stakeholders (Gerhart, 2003; Laplume et al., 2008). Irresponsible business outcomes require brands to contradict the orientation of their core functions by demonstrating intentions of being socially responsible through accountability
(Ripken, 2009). From the overall industry perspective, accountability, commitment and community development has been discussed as some of the value contributing facets of socially responsible behaviour of a corporate in the academic literature
(Carrigan and Attalla, 2002; Maignan and Raltson, 2002). Cai et al. (2011) empirically examined correlation between firm value of companies from controversial industry sectors and their socially responsible engagements and found a positive effect of socially responsible behaviour on the value perceived.
Socially Responsible Behaviour
Socially responsible behaviour of a corporate has been reviewed by academic researchers from various perspectives. Campbell (2007) used institutional theory to explain how organisations can be acknowledged as socially responsible based on two reasons (1) knowingly they do not act in a manner that may harm any individual (2) incase harm is inevitable due to the nature of the business, the rectification should be voluntary. Reinhardt et. al. (2008) undertook the economic perspective to explain socially responsible behaviour of corporates by examining the concept of profit sacrificing for social and public interests. The need to maintain a sustainable social
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behaviour by firms was reinforced by Renhardt et al. (2008) to face competitive pressures. Freeman and Velamuri (2008) undertook stakeholder view to integrate business, ethics and social considerations made by firms for fulfilling social responsibilities and addressing competition. The social contact theory was used by
Dunfe (2006) to discuss the need for firms to behave in a socially responsible manner for successfully managing associations through communications involving dialogues and engagement.
Academic research discusses the demonstration of socially responsible behaviour by brands but has somehow ignored the complexity of controversial industry sectors that successfully use brand management theories to build associations for products that are unavoidably harmful in nature. This sector has been given some attention by organisations such as the European Union and World Health
Organisations. European Union directive (2000) recommended scientific and transparent partnerships between the manufacturer from this sector and its associate firms and recommends a socially responsible behaviour during the buying-selling processes. According to the report, responsible behaviour of a manufacturer and its associate firms when oriented towards social needs of the community leads to the development of confidence in stakeholders. This confidence is embedded in the conduct of the company in a regulated environment. A report by the British
American Tobacco Corporation (BAT) identified a few steps that can be adopted by businesses and governments following which companies can demonstrate a socially responsible and accountable behaviour.
Werther and Chandler (2005) reviewed social behaviour of firms from branding perspective and reflected on strategic benefits of business ethics demonstrated by corporates through their activities as a competitive advantage against
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management lapses that happen due to social expectations, affluency and globalisation. Prosenak et al. (2008) considered societal marketing practices from a holistic view to discuss how socially responsible behaviour demonstrated through social initiatives taken up ethically by the firm may lead to affluence based on the well-being of everyone in the community. Based on a synthesis of the arguments presented by various research studies from different streams we have identified three constructs, i.e., social initiatives, business ethics and brand associations as antecedents to make assumptions about their combined ability to drive socially responsible behaviour of brands that ultimately influences brand reputation. We have also considered guidelines from the EU Report to conceptualise the moderating role of business customers in driving brand reputation by demonstrating socially responsible behaviour. A theoretical underpinning of our assumptions is discussed and presented as research propositions.
Social Initiatives
Academic research recommends that firms offering controversial products should take up social initiatives to address the concerns of its stakeholders (Lantos, 2001; Menon and Menon, 1997; Srivastava et al., 1998; Kumar, 2005). The guidelines specified by
Janardhan (1997) discuss in accordance with this argument and suggest that companies should communicate regularly with their customers for creating awareness about the risk associated with the products they offer as their social initiative.
Researchers such as Paladino (2005) hold manufacturers responsible for educating customers about the management of the risk that is linked with their products while it is continuously involved in innovatively developing risk free products that benefit the community. Literature on brand management argues that a brand’s social initiatives
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oriented towards community development have positive consequences (Algeshiemer et al. 2005).
Martin et al. (2010) recommended to brands offering controversial products that they should ethically reflect on their level of commitment to take initiatives oriented towards fulfillment of its social responsibility through community development programmes. A recent study of firms offering controversial products was performed by Cai et al (2011). They found that the top management was sincerely involved in the social initiatives of the firm with an aim of enhancing the long-term value their firm contributes to its associations. Controversial products have been reviewed for discussing engagement of firm in social initiatives from the perspective of value offered by the firm but has not made recommendations that would help managers to strategically approach their social initiatives with the purpose of building a socially responsible brand. While different aspects of social initiatives taken by firms have been tested individually by previous researchers, the total effect of different dimensions of social initiatives is not known. To understand the cumulative effect of three types of social initiatives on a brand offering controversial products, we propose:
P1a: Brands that emphasise on building awareness about the nature of its products amongst its customers will have a higher probability of being recognised as socially responsible brands.
P1b: Brands that emphasise on educating its customers about the management of risk associated with its products will have a higher probability of being recognised as socially responsible brands.
P1c: Brands that emphasise on participating in community development programmes will have a higher probability of being recognised as socially responsible brands.
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Authors such as Crane and Kazmi (2010) studied social issues linked to products in the context of children and established the need for a brand to identify issues and manage its social initiatives to resolve those issues very strategically. If we look at industrial practices, Glaxo Smithkline has been socially very active in community development but its failure in educating customers about the side effects of its drugs has made it look socially irresponsible. Simultaneously, Merck has ensured that it provides access to everyone to better healthcare products but has not been very participative in community development (Lyon, 2007). As a result, Merck is not considered as a socially responsible company. Although both academics and managers are aware of the three types of social initiatives identified by us, they are unaware of their individual effects. As current literature does not explain the optimal level of engagement of firms in different dimensions of social initiatives required by them, we argue that:
P1d: Impact of community development will be stronger in comparison to educating customers about the management of risk associated with the product; which in turn, will be greater than creating an awareness of products that are controversial in nature by brand to be known as a socially responsible brand based on its social initiatives.
Business Ethics
The study by Lacznaik and Murphy (2006) recommended ethical practices to be followed by managers to achieve business aspirations. Implications of business pressures on ethical behaviour of firms and the outcome of these behaviours on expectations of those associated with businesses has been discussed by literature on corporate governance as an important challenge to be addressed by managers
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(McCarthy et al. 2003; Guay et al. 2004). A study of business ethics from corporate social responsibility perspective by Maignan and Ferrell (2004) revealed transparency in actions as an important requirement for a business to be considered ethical.
Jeurissen (2004) used the political lens to understand firms as socially responsible citizens in an institutional environment and highlighted strategic self-regulation as one of the criteria based on which a business can build a reputation of being ethical and can be held responsible for the actions taken and influence of their actions.
Commitment demonstrated by a firm towards providing solutions to the social problems being faced by the community through self-regulation can also help its brand to be recognized as a socially responsible brand (AmbaRao, 1993; Denis et al.,
2000).
While ethical practices have been acknowledged as the pillars of a socially responsible business by academic researchers such as Buhner et al., (1998), the cases of companies associated with controversial activities are continuously kept under surveillance by its stakeholders (Lyon, 2007). Companies such as Halliburton are highly motivated to behave responsibly, but, their involvement in the supplies they made to the military for the Iraq war has put them under the ethical lens of social responsibility investigators for the commitment they have demonstrated towards human rights. Union Carbide’s Bhopal tragedy highlighted the unethical practices being followed by companies at the global level and the need for self-regulation policies (Amba-Rao, 1993). Drawing upon these examples and research directions provided by Bartley (2003) who studied the ethical behaviour of corporates in terms of corporate conduct during certification procedures and monitoring mechanisms, a complete understanding of business ethics is necessary. Lack of managerial understanding and corporate pressure pushes managers to take short cuts and ignore
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ethical business practices (Campbell 2007). To get the holistic view of business ethics for brands vulnerable to being labeled unethical due to the nature of their products, we would like to know if:
P2a: Brands that emphasise on commitment for demonstrating business ethics will have a higher probability of being recognised as socially responsible brands.
P2b: Brands that emphasise on transparency for demonstrating business ethics will have a higher probability of being recognised as socially responsible brands.
P2c: Brands that emphasise on self-regulation for demonstrating business ethics will have a higher probability of being recognised as socially responsible brands.
Practitioners of business ethics recommend committed behaviour of firms in its actions and processes in a way that firm adheres to regulations specified by the law.
Companies such as Reliance who offer controversial petroleum products in India have demonstrated a very strong commitment to its shareholders and customers, but have been unsuccessful in managing the ethical dimensions due to the translucent nature of its operations and failure to follow regulations. As per Crane and Kazmi (2010) it is important to understand the individuality of different dimensions of ethical behaviour of businesses wanting to become socially responsible. Following guidelines of Crane and Kazmi (2010), we would like to propose that the:
P2d: Impact of commitment demonstrated will be stronger in comparison to selfregulation; which in turn, will be greater than transparency maintained by the brand to be known as a socially responsible brands based on its ethical business practices.
Brand Associations
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Low and Lamb (2000) studied measurement and dimensions of brand associations and found that brand associations differ across brands and product categories. Robin and Reidenbach (1987) reviewed the concepts of brand associations from the point of view of social responsibility and found that brands that try to find solutions to the social issues being faced by the community are able to create associations stronger at the emotional level. Pomering and Johnson (2009) studied how brands manage expectations of their associations beyond economic benefits and proposed engagement in non-economic activities for becoming socially responsible. Caring for the society by demonstrating accountability and intentions to fulfill the expectations of those associated with it helps managers to develop a brand that is recognized as a socially responsible brand (Schutter, 2008; Kraisornsuthasinne and Swierczek, 2009).
However, these studies seem to be biased when considering anecdotes that highlight the case of Monstano being held responsible for tragic suicides committed by farmers (Malone, 2008) or use of corporate mercenaries offering private military and security services by brands such as Exxon Mobl or De Beers (Mathieu and
Dearden, 2006) or Nestle, Mars and Hershey using cocoa harvested by slaves and underage labour to manufacture their products (Orr, 2006). Although these two brands have been able to successfully build strong brand associations, their actions have damaged their reputation of being socially responsible despite of their focused approach and programmes oriented towards corporate social responsibility. The empirical (Becchetti and Ciciretti 2006) and anecdotal information on brands operating in controversial industry sectors reflect on the strength of associations created by a brand and indicate a debate between stakeholder theory and shareholder theory. Application of brand management theories for providing confidence to stakeholders has been discussed as socially responsible behaviour of a brand by the
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literature on corporate social responsibility (Siltaoja, 2006; Lacznaik and Murphy,
2006). We contribute further to this debate by investigating if associations built by a brand offering controversial products can help the brand to be recognized as a socially responsible brand by its stakeholders, we argue that:
P3a: Brands that reflect on emotions in their social initiatives for building associations will have a higher probability of being recognized as socially responsible brands.
P3b: Brands that reflect on accountability in their social initiatives for building associations will have a higher probability of being recognized as socially responsible brands.
P3c: Brands that reflect on fulfillment of responsibilities in their social initiatives for building associations will have a higher probability of being recognized as socially responsible brands.
Phau and Teah (2009) examined influence of attitude and personality characteristics of brands on consumers and found their impact on status of the brand, consumption of its products and its integrity perceived to be positive. They did not find a strong effect of attitude and personality on gratification and value consciousness of consumers. Industry reports also discuss these relationships in a similar fashion for brands such as Monsanto -- an agriculture giant. Monsanto has been held responsible for farmers committing suicide due to its failure to behave socially responsible because of its monopolistic practices. Such cases require researchers to provide a complete understanding of brand associations to be developed based on its socially responsible activities. Keeping a focused approach to our research, we would like to
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understand creation of brand associations for products that can be considered controversial based on following arguments:
P3d: For developing socially responsible brands based on brand associations by companies offering controversial products, the impact of emotional dimension of the brand will be stronger in comparison to accountability; which in turn, will be greater than the fulfillment.
Brand Reputation
The concept of the reputation of a brand being socially responsible alludes to benefit or goodwill that a business accrues from the application of branding theories in its actions while fulfilling its social responsibilities (Knox et al., 2005). The theory of brand reputation, if reviewed from the perspective of socially responsible behaviour of a corporate explains the role a brand plays in the development of a community and also the place a community occupies in business management and brand management strategies (deChernatony, 1999; Smith 2010; Hillestad, 2010). The reputation thus built by a brand when studied through the lens of operations and management highlights the influence of transparency a brand maintains in its business activities and the notion of corporate social responsibility it reflects in its business practices and actions (Angus-Leppan et al., 2010; Davies and Ryals, 2010). Literature on corporate governance discusses how transparency and responsibility recognized by customers and business associates of the firm enables them to assess the integrity of its socially responsible intentions (Vo, 2008).
To be able to manage transparency in actions as a part of business activities requires the management to practice business ethics as an essential component of its corporate agenda (Zadek, 1998). Developing reputation of a brand also requires
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clarity in business ethics based marketing plans of brand to be implemented in such a way that they minimize the risk of damage that any unforeseen action or activity may make to the reputation of the brand (Lacznaik and Murphy, 2006). Particularly for companies from controversial industrial sectors ethical practices followed by a brand require efficient management of expectations of its stakeholders as they lead to the development of respect for the manufacturer brand amongst its associations (Young et al. 2010).
Apart from efficient management of expectations, the willingness of management to be held accountable for its activities contributes to the reputation of being socially responsible for a brand (Metzger, 1984). In the case of controversial products, the harmful nature of the product reflects on the unaccountability of the brand making it difficult for managers to implement strategies that are aimed at developing a reputation of being a socially responsible brand (Shaw, 2007).
According to Lacznaik and Murphy (2006), socially responsible brands should try to educate customers about how to use their products in a safe manner. To understand if the recognition of a brand offering harmful products to users as socially responsible can strengthen its reputation, this is what we propose.
P4: Recognition of a brand as being socially responsible will have a positive influence on the reputation of a brand offering controversial products.
Business Customers and Brand Reputation
Associating with external firms for managing social initiatives can strengthen the reputation of a firm owning a brand in a competitive market (Drumwright, 1994; Park and Dickson, 2008). Brands associate with external firms in many ways. For the purpose of offering products to consumers at distant locations, they associate
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themselves with external firms as business customers (Gupta et al. 2008).
Associating with firms operating independently as agents or business customers improves the capabilities of the brands in distant and competitive markets (Anderson and Gatignon, 1986; Achrol and Kotler, 1999). While brand managers prefer to associate with not-for-profit organisations instead of involving their business associations for managing social initiatives (Reed et al., 2010), business customers can add higher value to the initiatives taken up by brands (Ogrizek, 2002). Business customers are able to act as credible commentators who aid in the positioning of the firm in the consumer segment as a responsible corporate citizen (Karkkainen, 2001).
Business customers have also been reported as a useful resource for creating awareness of product characteristics amongst purchasers (Srinivasan and Lip, 2003;
Cretu and Brodie, 2007). Educating consumers located in remote markets requires the support of business customers due to their close interaction with the local community
(Lantos, 2001).
Social initiatives taken up jointly by the manufacturer brand and its business customers reflect on the ethical conduct of the business (Kennedy et al., 2001).
Involving business customers can enable a brand to successfully establish strategic alliances in the business-to-business markets with small and medium firms that share similar values. Sharing of similar values can enable the brand to carry the effect of its socially responsible actions till the end of its supply chain (Ciliberti et al., 2011).
Business customers can facilitate projecting the brand to be socially responsible brand by enabling managers to successfully perform their important business functions such as educating retailers of products about the nature of the products (Gupta et al., 2008).
Educating business customers about the laws to be complied with while selling controversial products can also enable the brand to adhere to the regulations under
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which the products are to be sold (Tsalikis and Fritzsche, 1989). Adhering to laws and regulating the sales of products as per the legal requirement contributes to the reputation of a brand (Laczniak and Murphy, 2008). Participation of business customers in initiatives of the brand aimed at educating consumers strengthens the emotions of belongingness between brand and its sellers (Henderson et al., 2011).
Such belongingness to the brand felt by business customers strengthens their association at the emotional level, which is based on rational objectives (Gounaris,
2005).
Identifying, educating and supervising business customers on (1) compliance with the law (2) management of risk involved with the product adds brand value to the product and builds a stronger reputation of the brand (Grisaffe and Jaramillo,
2007; Ogrizek, 2002). The level of involvement of business customers in managing social initiatives of a brand, brings opportunities centered around a set of beliefs and standards that reflect on the care that brand has for the quality of life of its users apart from reflecting on the standard of living of users (Ostrom, 2012). The opportunities thus received help brands to compete at the global level and allow business customers to compete at the local level (Smith, 2010). Therefore, we assume that while selling products that can be harmful to customers at a later date, business customers enable brands to efficiently communicate and educate customers about social initiatives it takes to responsibly contribute to the community strengthens the reputation of the brand. Hence, we argue that:
P5: The impact of a brand recognized as socially responsible will be higher on brand reputation in the context of a business to business customer.
Managerial Implications and Future Research
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As businesses continue to strive towards making higher profits for economic reasons, stakeholders such as vendors, suppliers, employees and customers seek emotional benefits for social reasons apart from rational benefits from their association with the business (Sheth and Parvatiyar, 1995). These desires of stakeholders require businesses to develop a reputation that is difficult to be challenged. Customers of products, which can harm users, want to see such businesses behaving responsibly
Schuck, 1994). Businesses whose products may endanger human survival have used corporate brand management theories for addressing this requirement of stakeholders and building reputation of accountable companies (Jayawardena et al. 2008). The pressure from consumers to be accountable further pushes managers of firms offering controversial products to adhere to the philosophy of social responsibility (Ford,
2008). The notion of social responsibility requires companies offering controversial products to work for the benefit of the stakeholder with practices such as care for its employees, their work conditions, health and safety measures it adopts for production, care for the environment and compliance with the law (Lacznaik and Murphy, 2006).
These efforts make can make a company offering controversial products become a preferred employer by employees who take pride in the products they produce
(Lantos, 2002). Our conceptual model presents a structured framework that based on existing knowledge to enable such firms in developing a socially responsible brand for managing the favourable reputation of their brand. A positivistic approach for future research on this topic would be appropriate as it will help in empirically testing the propositions made.
The framework reinforces the concept that firms owning brands are considered to be a part of the social community in which they operate in many ways
One it highlights the responsibility of the management to ensure that profits are made
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following industry standards and are utilized and distributed in a way that every stakeholder benefits from the profits made within the periphery of societal norms and values (Bansal and Roth, 2000). Two, to fulfill its societal responsibilities it recommends that managers can take up special initiatives to improve the quality of experience its stakeholders have with the brand (Seuring and Muller, 2008). Three, it reflects on how a responsible brand can successfully build a favourable reputation based on its efficiency to ensure attractive returns on investments made for the investors. Four, by building strong associations at the emotional level with employees, suppliers, vendors and sellers it suggests that brands can reduce the cost of its products based on flawless and volumetric production (Smith, 2010). Finally, the fifth point can be to enable the manager to combine all these factors for improving the efficiency of the brand’s supply chain through the adoption of the just-in-time philosophy.
All these aspects of a brand individually effect the associations that are both internal and external to the brand. The combined effect of the individual effects on different associations can reflect on the values of the firm behind the brand and builds reputation of being socially responsible for the brand. For brands offering controversial products extra support is required by the brand from its associates to build a reputation of being a responsible brand. While being acknowledged as a socially responsible brand both internal and external associations help the brand offering unsafe products in building its reputation. We recommend future researchers to empirically test the framework as it will help them to understand the extent to which brands can utilize their business customers in managing the activities related to corporate social responsibility as they can effectively communicate about its social
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initiatives for better outcomes. However, researchers will have to also investigate the reasons why it is not happening in practice.
This research also suffers from its limitations. One of the limitations could be country specific, i.e,. in some countries firms get the benefit of tax exemption for social activities performed through not-for-profit organisations. This study has created a research agenda for researchers focusing particularly on 1) branding and 2) controversial industry sectors. It provides directions for exploring these two streams of research further from the perspective of social responsibility of firms. For the purpose of generalization, the topic taken up by this research is very broad.
Researchers should continue to conduct further research on this topic. However, we recommend that research objectives should be refined using expert views. Other limitations exist. As it integrates concepts and theories from both business-tobusiness and business-to-consumer research, we propose to future researchers of this topic that they can divide this research into two projects with individual focus on business-to-consumer or business-to-business theories. Conducting this research through two projects might give them better clarity on findings and their implications.
Summary
In this article we have drawn on previous research studies as well as relevant research that has not been reported in academic journals to synthesise key constructs pertaining to the reputation of brands from controversial industry sectors. Based on the synthesis we have drawn assumptions and built a conceptual model to propose a research agenda pertaining to products offered by firms offering controversial products using brand management theories. The agenda thus developed needs further empirical investigation to establish the causal relationships assumed.
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