Effects of Corporate Social Responsibility on Customer Brand Choice in Baltic Region: Mediating Role of Product Involvement Level

Abstract

The purpose of this study is to investigate how CSR initiatives of company influence customer brand choice. This research primarily deals with how CSR initiatives of the firm effects consumer buying behavior and purchase criteria in different product categories. The study provides a solution to effectively link CSR with elements of brand equity. Specific research objectives include: (1) evaluating consumer understanding of CSR concept; (2) CSR influence on consumer brand choice in low involvement and high involvement product categories; (3) CSR effects on different elements of brand equity. This study establishes theoretical framework, research design, interpretation of results and finally proposes a model for effective CSR initiatives in line with customer involvement level with a product. Quantitative research method-a survey is used to collect data. The questionnaire was derived based on Christopher A. Noe, using 5-point Likert scale.The sample size is 57 students of business studies from two main universities in Latvia. Descriptive and inferential statistics are used to analyse the data. Results indicate that CSR initiatives have significant influence on customer brand choice in case of high involvement products and little influence on customer decision in case of low involvement products. Results also indicate that CSR has positive effects on some elements of brand equity, while little or no effects on others. Consumer perception and evaluation of four different types of CSR initiatives-legal compliance, environmental protection, transparency and participation in voluntary projects vary significantly in their purchase decision. Finally, it is also revealed that some industries in Baltic region have poor corporate image in terms of CSR initiatives. KEYWORDS: CSR and brand equity, CSR effects on consumer buying behavior, CSR and product involvement level; Customer perception of CSR; CSR in Baltic region.