THE the Applied Business Research and Analysis Course at

THE ROLE
OF CORPORATE SOCIAL RESPONSIBILITY STRATEGIES OF APPLE INC. ON CONSUMER BUYING
BEHAVIOUR AND THEIR BRAND LOYALTY

 

 

 

Prepared
by: Jodie-Lea Whitehurst (@00430319)

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Preparation
for Applied Business Research and Analysis Course

University
of Salford

 

13th
November 2017

 

 

 

 

EXECUTIVE
SUMMARY

This report examines the role of corporate social responsibility
(CSR) strategies of Apple Inc. (Apple) on the buying behaviour of the consumer
and their brand loyalty. Through a detailed literature review and analysis of primary
data collected from a questionnaire and focus group discussion, it becomes
clear that Apples CSR have a important role in consumer buying behaver –
especially the modern consumer. However, it is highlighted that Apples CSR
polices aren’t being communicated to consumers as effectively as they could be.
The report concludes with some proposals on how marketers might try to
communicate their CSR programme to help consumers develop a detailed understand
of their values.

The information presented in this report has been collected from
primary sources including surveys and interviews, in addition to an extensive
literature review. Both sources provide quantitative and qualitative data for
analysis.

The report has been prepared for the Applied Business Research and
Analysis Course at the University of Salford.

 

Keywords

Corporate Social Responsibility, Apple Inc., Technology, Buying
Behaviour, Consumer Loyalty

 

TABLE OF
CONTENTS

 INTRODUCTION

In the highly competitive technology industry and marketplace that
exists today, companies are under pressure to produce innovative and effective strategies
to attract and retain new and existing consumers. In order to attain this goal,
companies must understand consumer buying behaviour and the factors that
influence these decisions. In the past, such
competitive advantage was attained through factors such as quality, cost and
customer experience, however with the ‘modern consumer’ other factors must
be considered including corporate social responsibility (CSR). This report aims
to examine the role that Apple Inc’s. (Apple) CSR strategies have on the buying
behaviour of the consumer and their brand loyalty, when shopping for
technology.

CSR has increasingly become an important tool in business and is
strategically being used by companies in a bid to gain a competitive advantage
(Husted, B.W. & Allen, B.B) by appealing to the growing number of socially
conscious consumers – but is it important to Apple technology consumers? There
are various understandings of what is meant by CSR, but broadly defined it
refers to a company’s commitment to be accountable to its stakeholders by
responsibly managing the economic, social and environmental impacts of their
operations to maximise the benefits and minimise damage (Beal,B.B 2014).
Important CSR matters include environmental management, employee and community
relations, responsible sourcing and labour standards. The main consensus of CSR
is to provide ethical services and sustainable products.

 

Why Apple?

Apple Inc. (Apple) is an American multinational technology
company that is currently the largest tech company in the world (Forbes, 2017)
and one of the leading companies in the Smartphone industry. This raises the
question as to how they have attained this position in the market and if it is
linked to their reputation of CSR. They have numerous CSR programmes and
initiatives that focus on sustainability and social responsibility, led by Lisa
Jackson (Vice President of Environmental Initiatives) (Apple, 2017). Apples CSR
programmes include; Supporting Local Communities; Educating and Empowering
Workers; Gender Equality and Minorities; Waste Reduction and Recycling;
Sustainable Sourcing and many more. Though in the past under Steve Jobs’ control
CSR was not a priority (Dudovskiy, J. 2017), since Tim Cooks’ appointment in
2011 it is suggested that they have become an important part of Apple’s journey
– but how important are they to new and existing consumers?

 

Research
Objectives

The aim of this report is to examine the role that CSR strategies
of Apple have on the buying behaviour of the consumer and their brand loyalty,
when shopping for technology in the UK. This can be valuable in understanding
and determining how to retain new and existing consumers. The report aims to
develop a comprehensive understanding of the factors influencing consumer
buying behaviour when shopping for technology and highlight whether Apples CSR
matters to consumers during this process and whether it affects their brand
loyalty.

 

Significance
of Study

Granting CSR is widely understood by many organisations, the role
it plays in the consumers buying behaviour is much less studied. Findings of
this research are specific to understanding consumer loyalty and the value of CSR.
The research methods will provide detailed feedback from consumer engagement
that will be important for Apple to understand what is important to technology
consumers, and to encourage confidence in the brand. In addition, it will
highlight how well Apple are communicating their CSR programmes and initiatives
to help consumers understand their values. Subsequently, this will be helpful
in understanding competition, developing new strategies and result in better
outcomes for Apple.

 

Hypothesis

It is predicted that the results of this research will highlight:

‘Apple’s CSR strategies have an important role in the consumers
buying behaviour and their loyalty to the brand, when shopping for technology.’

This prediction was established from background research on the
topic and from briefly reviewing literature in preparation for this report.

 

LITERATURE
REVIEW

This section of the report aims to provide a synthesis of
literature linked to consumer buying behaviour and CSR. CSR is a broad concept
with vast definitions associated with it. Beal (2014) defined CSR as a
‘company’s commitment to be accountable to its stakeholders by responsibly
managing the economic, social and environmental impacts of their operations to
maximise the benefits and minimise damage’.

Consumer buying behaviour refers to ‘the activities people
undertake when obtaining, consuming and disposing of products and services’
(Sethna, Z. & Blythe, J. 2016). 
There are many theories as to what influences the consumer behaviour,
the most commonly known theory being the Marketing Mix 7P Model by Booms and
Bitner (1981) which includes; price, product, place, people, promotion, process
and physical evidence. However, though this theory provides an accepted
understanding, as Sethna and Blythe (2016) suggest, it isn’t appropriate from
the consumers perspective but rather the marketers. It doesn’t consider the
‘modern consumer’ who have a more ‘socially conscious’ perspective.  Alternatively, Webster (2011) defines the
socially conscious consumer as a ‘consumer who takes into account the public
consequences of his or her private consumption’ who is influenced by ‘using his
or her purchasing power to bring about social change’. As this definition
closely links with the purpose of CSR, it can be argued that a socially
responsible consumer would be prone to buying from reliable companies.

McDonald et al. (2006) argues that each consumer purchase
has ‘ethical, resource, waste, and community implications’ and while
increasingly clear ethical considerations are entering consumer buying choices,
a ‘disconnect between the issues consumers claim to care about’ and ‘their
purchasing behaviour’ is apparent (Belk et al., 2005, p. 276). He states that
though consumers are aware and have an opinion on CSR, this may not always
reflect in their buying behaviour due to other conflicting factors like brand,
price and social influence. Evidence from Defra (2006) advocate this statement
through the ‘attitude–behaviour gap’. For example, ‘30% of UK consumers report
that they are concerned about environmental issues but they struggle to
translate this concern into green purchases’. This suggests the role of CSR
strategies by Apple maybe limited it’s the consumer buying behaviour when
shopping for technology.

McEwen’s (2010) research has shown that companies who ‘generate
“fully engaged,” emotionally connected consumers sell more, make more
money, and are better able to withstand the stress of economic downturns’,
suggesting that emotional connections formed through Apple’s CSR initiatives
like philanthropy, could be the reason for Apples continuous progression in the
market. For example, Apple sold 1.39 million iPhones worldwide in 2007 compared
to 211.88 million in 2016 (Statista). Similarly, Fallon (2017) advocates this
theory by suggesting that the modern consumer is looking ‘beyond material products and
quality services’ by holding companies to a higher standard. These
‘higher standards’ that Fallon (2017) mentions are be categorised as environmental
efforts, philanthropy, volunteering and ethical labour practices – also known
as CSR. These theories imply that consumers are making ‘conscious consumer
choices’ and are prone to selecting products and services from the more
responsible companies like Apple, that convey ‘positive emotional overtones’
(McEwen, W. 2010). These studies however, do not give statistical evidence or
provide case studies on the importance of CRS in consumer buying choices.

According to a recent Nielsen Global Survey (2011), which
researched consumer willingness to spend more on goods and services from
organisations who have implemented CSR programmes and are socially responsible,
the ‘percentage of global consumers willing to reward companies … grew by 5%
from the previous year – increasing to 50%’. This study had 29,000 participants
which is a significant sample size and therefore represents a substantial
number of consumers concerned with CSR. This supports the hypothesis that CSR
has an important role in consumer buying choices, however with such surveys it
cannot be ignored that there is a considerable risk of collecting unreliable
and invalid results due participants giving ‘desirable answers’, as realistically
participants wouldn’t want to imply that they don’t support socially
responsible companies and wouldn’t pay more for socially responsible products
and services.

 

METHODOLOGY

This research was conducted in the UK. The data for this
multi-method study was sourced from primary data collecting techniques and both
quantitate and qualitative data analysis was used. Whilst existing literature
explores the role of CSR on business performance, it fails to explore the role
of CSR in relation to the consumer buying behaviour and their loyalty to the
brand. Given this limited knowledge the chosen research methods for this inductive
research were, a questionnaire and a focus group interview which provided
detailed quantitative and qualitative data, from consumer engagement. The
methodology for this research was determined using the ‘Research Onion Theory’
by Saunders et al. (2007). Consumers initially need to be aware of
Apples standard of CSR before it can impact their purchasing which is why it
was ensured before this research was conducted, participants were required to
have a basic understanding of Apple’s CSR.

 

 

Questionnaire

An online questionnaire was constructed and distributed to 50
participants that have purchased Apple technology in the last year. There were
equal number of male and female participants between the ages of 18 and 65
years old. Participants were asked to answer ten questions based on their
understanding of CSR, what influences their buying behaviour and if CSR has any
impact on the companies they buy from, when shopping for technology. As
suggested by Smith et al (2009), the questions were kept ‘easy’ and the questionnaire
‘short’ to increase the chance of response rate, in addition to assuring
participants that the questionnaire was ‘confidential and anonymous’. This
ensured respondents didn’t give ‘socially desirable answers’ and enhanced the
validity of the data. At the end of the questionnaire, on the last question, respondents
were given the opportunity to state additional thoughts on Apples CSR and the
effect it would have on their future buying choices when shopping for
technology. The questionnaire was valuable in providing both quantitative data
(statics) for the objectives of the study as well as some qualitative data that
assisted the focus group discussion.

 

Focus
Group

The focus group consisted of eight participants (four male and
four female), each of which had completed the questionnaire. The session was an
open discussion about what influences the participants buying behaviour when
shopping for technology and was valuable in providing the qualitative data for
the study.  An issue with focus groups as
suggested by Smith et al (2008), is that ‘people may well not be willing to air
their views publicly’ which is why before conducting this focus group each
potential participant was asked if they were comfortable to engage in a small
group conversation, about the questionnaire they had completed. This ensured
all participants were comfortable to discuss their views. In the case of this
research, a focus group was used to good effect in the same way Curran and
Downing (1989) did ‘as a means of validating the questionnaire responses’ that
had been collected. The focus group lasted one hour, was recorded and factual
notes were taken by the research conductor throughout. The data collected was
then analysed and highlighted the role that CSR has on consumer buying choices
and their loyalty.

 

PRESENTATION
OF RESULTS

Importance
of CSR

As show in Figure 1, 84% of respondents stated that it was either important
(60%) or very important (24%) to them that the Apple Inc. operates on a
socially responsible level.

Figure 1: Statistics to represent how important is was to respondents that the technology companies they
use operate on a socially responsible level.

The finding indicates that Apples CSR does have an important role
in the selection and usage of technology companies by the majority of the
participants. This perspective was then revisited in the focus group interview
in which, participants who had answered ‘very important’, ‘important’ and
‘indifferent’, had an agreement that they ‘wouldn’t purchase technology that
has been produced unethically in sweat shops or that was negatively impacting
the environment’. Data from the questionnaire also showed that all respondents
had purchased 2-3 Apple product in the last 2 years. This data is consistent with
the research carried out by ‘The Nielsen Global Survey of Corporate Social
Responsibility’ (2014) that found, ‘52% of 30,000 consumers in the UK made at
least one purchase in the past six months from one or more socially responsible
companies’.

As part of the questionnaire participants were asked to rate on a
scale of 1 to 5 (1 – being not very important at all and 5 – being very
important) what influence did Apples CSR reputation have on their purchasing
behaviour. Over half of the respondents (62%) answered 4 (Important) and 5
(Very Important), in contrast to 4% who answered 1 (Not important at all). The
focus group highlighted no obvious answers as to why, as all the participants
were in general agreement that Apples CSR reputation was an important factor of
their purchasing behaviour. After evaluation, this gap in the results could be
completed had the size of the focus group been larger as it was clear that
those who had answered differently were unintentionally not a part of the focal
group.

 

Factors
Influencing Consumer Purchasing Decisions

Figure 2 shows the average ranking of nine factors that multiple
theories have suggested are important in the consumer buying decision.
Participants listed the factors from most important to least important when
shopping for technology. The most important factor is indicated by the highest
value and the least important by the lowest value.

 

 

Factors

Price

Quality

CSR

Brand

Features

Social Influences

Customer Service

Latest Software

Packaging

Average Rank

7.34

7.38

6.16

5.14

5.12

4.28

4.26

3.56

1.76

 

Figure 2: Average statistics to represent the importance that each
factor has on consumer purchasing decisions when shopping for technology.

The findings from this survey question state the main three
factors that are important for consumers when shopping for technology are
‘price’, ‘quality’ and ‘CSR reputation’, in dissimilarity to previously conducted
research by Osman et al. (2012) which found ‘35.6% of the respondents prefer to
purchase the smartphones according to the trend in the community’. This
variation in results could be subject to the difference in sample size and age
of participants between both studies. Osman et al.’s (2012) study had 1814
participants who were mainly young people, in contrast to this research study
which was 50 participants between the ages 18 and 65 Years old.

 

Ensuring CSR

When asked in the questionnaire how much extra participants would be
willing to pay for phone if it was ensured that the company had effective CSR
policies and acted in a socially responsible way, 38% of respondents said
£30-£50. As shown in Figure 3, 76% of respondents said they would pay between
£1 and £50, whilst 24% said they wouldn’t be willing to pay extra.

Figure 3: Statistics to show the percentage extra
participants would you willing to pay for a £100 phone, if
it did ensure that the brand acted in a manner that was considered socially
responsible

 Though this question was
not specific to Apple, during the focus group discussion Apples ‘luxury’
product price points were discussed in relation to this idea of paying for
socially responsible products. One participant stated:

‘It’s like the Fairtrade food market. You expect to pay more in
the supermarket for Fairtrade products and so I expect to pay more for high quality
socially responsible products that are ethically produced like Apples products,
instead of cheap china made items that were none the wiser of the materials
they’ve used’. Similarly, the study ‘he Nielsen Global Survey of Corporate
Social Responsibility’ (2014) found that ‘55% of consumers would pay extra for
products and services from companies committed to positive social and
environmental impact’.

This highlights an idea that Apples high price points can be
linked to the customers perceived quality of the products.  This represents consumer value for the CSR
brand reputation and image. Cretu and Brodie (2005) suggest that, ‘there is
considerable practical experience and empirical evidence to show that
perceptions of customer value have a positive influence on customer loyalty’.

 

Apple’s
CSR – Consumer Awareness

Both the questionnaire and focus group discussion highlighted that
the participants awareness of Apples CSR initiatives and programmes was
reasonably limited. The questionnaire showed that 36% of participants would say
they had detailed knowledge on Apples CSR initiatives and programmes, whilst
64% said they had basic knowledge. Upon discussing this question in the focus
group and providing some of Apples CSR information, 100% of participants
expressed the same view and said they would:

 ‘definitely consider them
more when shopping for more of their technology products’

‘Always shop with them as they’re a reliable responsible brand’

‘Feel even happy to buy its sustainable products’

‘Continue to shop with them as they are an organisation who shows
equality to everyone and provide many jobs’

This question was designed to allow participants to express their
views on the impact of Apples CSR with supported the hypothesis in the fact
that, CSR has a role in brand loyalty as the data shows consumers would rather
give their business to socially responsible companies. 

 

Discussion
of Results

The data produced from the research conducted addressed the
research question and concluded that

 

 

CONCLUSION

This research has provided valuable insights into the role of CSR
strategies of Apple on the buying behaviour of the consumer and their brand
loyalty. Although previous research has covered a larger scope of CSR, the
results and understandings generated from this research were to highlight what
is important to Apple consumers and the role of CSR, which hasn’t previously
been addressed. The study and review of literature has revealed that though CSR
doesn’t hold the main role in the consumer buying behaviour, due to other
factors such as price and products, the focus group discussion showed that it
does have an influential impact on brand loyalty.

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