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Recent studies show that consumers like the products of firms that they consider socially responsible more.
What should companies do that want their products to be valued higher than their competitors’ counterparts? The answer is found: they need to regularly allocate amounts from the corporate budget to charity. Scientists Alexander Chernev and Sean Blair from Northwestern University (USA) came to this conclusion: “We found that the social responsibility of business benefits not only society, but also companies themselves, improving consumer opinion their products.”
Read more:
- Why do I do charity
Chernev and Blair conducted four experiments demonstrating the “shine effect,” in which a company’s overall reputation influences opinions about the quality of its products. “Consumers consider the products of socially responsible companies to be of higher quality,” they write.
Engaged tasting
As part of the experiment, 52 participants of the seminar were offered to taste wine. Each was given a glass of red wine and a card from the winery where it was allegedly produced. At the same time, some participants were told that this company donates 10% of its income to the heart association. The participants were then asked to rate the taste of the wine on a nine-point scale.
Those who knew about charity rated the wine higher than the rest. (It was noted that the high scores were mostly given by those participants who said they were not good at wine.) But in other experiments, participants rated baldness products and teeth whitening products with the same result. “The effect is most pronounced when evaluating those products whose quality cannot be immediately unambiguously assessed, and in cases where consumers do not have their own expressed preferences,” the authors of the study report.
The experiment also found that consumers’ opinion of a product’s quality rises even more if they learn about a manufacturer’s philanthropic activities not from its own promotional materials, but from independent sources. That’s why scientists are advising companies to more actively convey information about their charitable activities to consumers through social networks and PR services. And we hope that research like this will help charities get more donations.
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