Impact of Brand Crises on Brand Image in the age of Corporate Social Responsibility

Corporate social responsibility (CSR) has received the attention of researchers and practitioners in the field of brand management due to its significant impact on brand performance. A number of studies and practical cases suggested that integrating CSR with branding strategy creates a number of benefits to the brand and its stakeholders mutually. CSR has been found to be effective to increase brand value, develop brand equity, reflect a positive brand perception, and build strong brand identity. From a customer’s perspective, CSR has been found to be effective in maximising the perceived functional and emotional values emphasising the strategic importance of CSR as tool to enhance brand image and sustain a competitive advantage. Consequently, crisis managers and researchers -particularly in public relations, utilised CSR as an effective tool to respond to crisis situations and enhance a damaged brand image. This research aimed at investigating the impact of brand crises on brand image that had been accentuated with different CSR activities. The research examined the impact of two crisis types; performance-related and values related on brand benefits, and considered Carroll’s (1991; 2016) pyramid of CSR as a conceptual theory to compare the different role that each CSR category; economic, legal, ethical, and philanthropic CSR has in the context of each crisis. This was aimed to contribute to the understanding of the significance of CSR to brands through examining whether positive CSR records would attenuate, increase, or make no difference to the negative impact of performance-related crisis and values-related crisis. A research model with a set of hypotheses was developed in the literature. The hypotheses were tested through a 2 x 2 x 5 experimental research designed that consisted of 5 different questionnaires, legal CSR, ethical CSR, economic CSR, philanthropic CSR and no CSR. Specifically, the research tested 20 different situations: (values-related crisis, and performance-related crisis) X (functional/experiential benefits, and symbolic benefits) X (legal CSR, ethical CSR, economic CSR, philanthropic CSR and no CSR). The findings from this study indicated that both crises types damage the perception of functional/experiential and symbolic brand benefits. The perception of benefits perceived was negatively affected by the crises’ incidents. Positive records of CSR activities at a pre-crisis stage were found to vary in terms of anticipation to the negative impact of performance and values related crises based on the nature of the CSR activity. Ethical and Philanthropic CSR were found to be effective to protect brand image from the negative impact of performance-related crisis, however, they were found to expose the brand to more damage in the context of a values-related crisis. Finally, the research findings highlighted the importance of developing Carroll’s CSR pyramid to align with customer’s perspective of CSR with brand crisis in mind, in accordance to this a theoretical model was offered.