How international firms conduct societal marketing in emerging markets: an empirical test in China.
| Verfasser | Zeng, Fue |
| Posten | RESEARCH ARTICLE |
Abstract:
* This study tests the relationship between activities of societal marketing and firms' CSR legitimacy in terms of corporate social responsibility (CSR). It also examines the effects of the CSR legitimacy on firm performances in marketing. In addition, the study considers the relative importance of different activities of societal marketing.
* Based on data from a large sample of firms operating in both southern and northern China, this study compares the relative importance of three dimensions of societal marketing activities which influence a firm's CSR legitimacy.
* Different from research findings from developed economies, our data show that the social dimension of societal marketing activities is the most effective when it comes to influencing a firm's CSR image in an emerging economy. This image, in turn, has a positive effect on its marketing performances.
* This study suggests that, in an emerging economy such as China, firms that pay more attention to the social dimension of societal marketing are likely to be more effective in terms of building CSR legitimacy and achieving good performances.
Keywords: Institutional environments * Environmental * Social and economic societal marketing * Firm performance * Chinese market
Introduction
Since the 1960s (e.g., Kotler and Levy 1969), a wealth of evidence has emerged highlighting the significance of societal marketing in marketing performance (Banerjee et al. 2003; Kolter 2000; Leonidou and Leonidou 2011; Sen and Bhattacharya 2001; Tallon 2008). Societal marketing can be defined as a set of ethical marketing approaches, which can embrace public concerns and public interests and help plan social changes (Kotler and Zaltman 1971 ; Abratt and Sacks 1988, 1989). The positive effects of societal marketing have been demonstrated in a number of studies (Brown and Dacin 1997; Creyer and Ross 1997; Carrigan et al. 2011), but the relationship between societal marketing and firm's image of corporate social responsibility (CSR) has not been sufficiently studied. Moreover, the relative importance of the various practices that make up societal marketing remains unclear. Finally, the influence of institutional environments in different international markets has not been sufficiently considered.
Our current study addresses these research gaps by developing a theoretical model integrating existing research into societal marketing with research from institutional theory and that of corporate sustainable development. This model categorizes all activities in societal marketing into three sets or dimensions--environmental, social, and economic--all of which are tested consequently for their effects on firms' CSR legitimacy in a major emerging market. In addition, the relative importance of the three sets of societal marketing activities is also considered. Finally, the effects of CSR legitimacy on firms' marketing performances are also examined.
This study should be of significance both academically and practically. From an academic perspective, the results of this study may contribute to our understanding of the relationships among societal marketing, institutional environments in international markets, the effects of firms' CSR legitimacy and marketing performances. Although previous authors have discussed the various activities that make up societal marketing (e.g., Tortes et al. 2012), their effects on firms' CSR image have not been sufficiently studied. Moreover, little empirical evidence has been available in regard to their relative importance for building firms' CSR legitimacy. Finally, it remains unclear about the appropriate role of regulations and laws versus voluntary societal marketing activities in inducing firms' behaviors/performances.
All these are especially true for international marketing research in emerging markets. It is understood that these markets have different institutional environments than those in developed countries. Yet little research has been conducted on the relationships among institutional factors, societal marketing, the legitimacy of firms' image and firms' marketing performance. Testing these relationships should help international marketers to perform better in these fast-growing markets.
Empirical studies so far have yielded contradictory findings regarding this relative importance. For example, some studies suggest that the public will value firms that only satisfy the minimum requirements in the area of environmental protection if they are more proactive in the area of employee relations (Bird et al. 2007). In other words, the economic dimension of societal marketing, including the provision of a good income and other economic benefits to employees, is more important than the environmental or other dimensions in creating public value and in building a good legitimacy. Other studies, on the other hand, show that the environmental dimension of societal marketing is more important than the economic dimension for building firm legitimacy (e.g., Li et al. 2012). The current study sets out to test these different opinions regarding the relative importance of the three sets of activities in societal marketing.
Moreover, our current study should improve understanding of institutional environment in China. In spite of the research (e.g., Sheng et al. 2011), our knowledge about China's institutional environment is still insufficient, especially about the effects of China's institutional environment on the consequences of societal marketing. By testing the relationship between societal marketing and firm performances in an emerging market, this study should contribute to the research of international marketing. Specifically, insufficient research has been conducted on how international firms conducting societal marketing in emerging economies, in which the institutional environmental factors, including societal culture, should have some characteristics different from those in Western developed economies. By studying the relationship between societal marketing and firm performances in an emerging economy such as China, our current study should help understand the effect of institutional environment in emerging markets.
From a practical perspective, the results of this study could help boost firms' CSR legitimacy as well as their international marketing performance. In the institutional environment today, more and more consumers will consider firms' CSR image when making their purchasing decisions (Wagner et al. 2009). As a result, improving firms' CSR has become a very important task for firms managements, including those operate in international markets. Specifically, a firm's CSR image can influence its relationships with customers, retailers, and other business partners, can affect the perception of its brand, and can consequently have significant effects on its market value and financial performances (e.g., Luo and Bhattacharya 2006; Wagner et al. 2009). Therefore, for firms competing in international markets, it has become more and more important for their managers to understand how to improve their CSR image and legitimacy.
The empirical findings from this study should help international firms to understand how they should develop societal marketing programs and improve their firms' CSR legitimacy and performance in emerging markets. Consumers and societies in international markets today are paying more and more attention to such issues as corporate social responsibility (CSR) and sustainable development. Firms being able to meet the demands of institutional environments in international markets will find it easier to foster goodwill and obtain support from their customers, which in turn should enable them to do a good job in international marketing.
The rest of this paper is structured as follows. We first provide a brief review of the existing research on institutional environments, societal marketing and marketing performance, following which we propose a theoretical model that integrates the findings from the research. After that, we report an empirical study testing our hypotheses in the model, addressing along the way issues of data collection and data analysis. Finally, we report the findings and discuss their implications.
Literature Review and Hypotheses
Societal Marketing and Firms' CSR Image
According to research (e.g., Kotler and Zaltman 1971), societal marketing refers a set of ethical strategies or activities that incorporate societal-based considerations in their design and implementation and that are developed to influence the acceptability of products, services, social ideas, or an organization's attempts to relate to all of its publics (Kotler and Zaltman 1971). The aims of societal marketing include (1) striking a balance between consumer orientation, consumer needs, national and international resources, and the quality of the environment; (2) designing environmentally and morally compatible products; and (3) developing communication programs aiming at consumer education and information and avoiding deceptive advertizing claims and demeaning advertizing appeals (El-Ansary 1974, p. 318). Research has suggested that firms can differentiate themselves from their competitors by implementing societal marketing programs that enable them to create an emotional bond with customers and improve performance (see Kotler and Zaltman 1971 for some evidence of the effects).
Decades of research have produced numerous academic articles dealing with societal marketing, but the criticism has been made that so far societal marketing research has failed to present a holistic picture of trends and dynamics in the field. In other words, the studies so far have been too fragmented, diverse, and non-programmatic (Banerjee et al. 2003; Leonidou and Leonidou 2011). Moreover, since 1970s, there has been little advance in the theory of societal marketing (Crane and Desmond 2002). There has been no agreement either on the...
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