Effects of Customer Participation in Corporate Social Responsibility

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CQXXXX10.1177/1938965515620679Cornell Hospitality QuarterlyLoyalty et al.

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Effects of Customer Participation in Corporate Social Responsibility (CSR) Programs on the CSR-Brand Fit and Brand Loyalty

Cornell Hospitality Quarterly 2016, Vol. 57(3) 235­–249 © The Author(s) 2015 Reprints and permissions: sagepub.com/journalsPermissions.nav DOI: 10.1177/1938965515620679 cqx.sagepub.com

Moon-Kyung Cha1, Youjae Yi1, and Richard P. Bagozzi2

Abstract This paper reports the findings of a study on the effects of corporate social responsibility–brand fit (CSR-brand fit) on service brand loyalty via brand identification in a brand coffee shop industry. The authors also examine how customer participation in a firm’s CSR activities strengthens the formation of service brand loyalty. Using structural equation analysis, the proposed model was tested with 237 actual customers of brand coffee shops. The results indicate that CSR-brand fit strengthens both personal and social brand identification, which in turn increase consumers’ service brand loyalty. The results also indicate that personal identification has a larger influence on service brand loyalty than social identification does. The greater effect for personal versus social identification occurs when customers participate in companies’ CSR activities. This study deepens our understanding of the link between CSR-brand fit and loyalty via personal and social identification. The research is also the first to examine how customers’ active participation in CSR activities influences the process of loyalty formation. Keywords CSR-brand fit; brand identification; brand loyalty; customer participation Coffee is extremely popular in Korea with an ongoing increase in popularity. The industry sector of name-brand coffee shops is in the maturity stage of its life cycle (Kang, Tang, and Lee 2015). Brand coffee shops in this study are defined as multiunit chain-brand coffee shops, including international (e.g., Starbucks and Coffee Bean & Tea Leaf) and Korean coffee brands (e.g., Angel-In-Us and Caffébene). The brand coffee shop industry is well developed and continues to be intensively competitive for business operators. Brand coffee shops face competition from other coffee franchises, independent coffeehouses, non-franchised chains, gas stations, fast food restaurants, convenience stores, and more. Moreover, the industry’s standardization makes it hard for coffee brands to capitalize on coffee quality, service quality, location, environment, or customer–company relationship. Thus, brand coffee shops must find another way to create stronger customer loyalty. One of these ways is corporate social responsibility (CSR) initiatives, which demonstrate a brand’s compliance with societal values (Maignan, Ferrell, and Ferrell 2005) and can differentiate a brand from its competitors, thus shaping customer perceptions (Swimberghe and Wooldridge 2014). CSR has received considerable attention in the hospitality industry (Bohdanowicz and Zientara 2009; Martínez and

Rodríguez del Bosque 2013, 2015; Raub and Blunschi 2014; Schröder and McEachern 2005; Schubert et al. 2010), and customers’ attention to CSR also continues to grow. Companies spend a large amount of money not only on CSR activities but also on publicizing their contributions to society. Several leading companies (e.g., Starbucks, McDonald’s, and Delta Airlines) have started to utilize social media as a CSR communication tool. In a similar vein, there is increasing evidence that hospitality organizations implement CSR activities and report these activities on their websites and in their annual reports (Holcomb, Upchurch, and Okumus 2007; P. Jones, Comfort, and Hillier 2006; Njite, Hancer, and Slevitch 2011). This trend toward seeking public recognition for contributions to society seems to rest on the belief that consumers will reward firms with a strong social agenda. Service research indicates that CSR can increase trust, customer satisfaction, financial 1

Seoul National University, South Korea University of Michigan, Ann Arbor, MI, USA

2

Corresponding Author: Richard P. Bagozzi, Stephen M. Ross School of Business, University of Michigan, 701 Tappan St., Ann Arbor, MI 48109-1234, USA. Email: [email protected]

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performance, and positive work outcomes of service employees (Marin, Ruiz, and Rubio 2009; Pivato, Misani, and Tencati 2008; Raub and Blunschi 2014). However, in the food service industry, little academic research has examined CSR effects on customer–brand relationship. Several studies in the restaurant industry have demonstrated that customer satisfaction and trust positively influence customer loyalty (Gracia, Bakker, and Grau 2011; Han and Ryu 2009; Hyun 2010). In a study focusing on the quick-service restaurant industry, Swimberghe and Wooldridge (2014) suggested that CSR associations affect customer loyalty via customer trust but not through consumer satisfaction. Moreover, the coffee sector’s active engagement with CSR issues appears to be a relatively new phenomenon (Hamann et al. 2015). This study investigates (1) the effect of CSR-brand-fit on service brand loyalty, (2) the mediating role of personal and social identification, and (3) the role of customers’ CSR participation in loyalty formation focusing on the brand coffee shop industry. These issues are important for several reasons. First, CSR-brand fit needs to be examined to give researchers a clear insight into how customers structure and enhance their loyalties toward brands within the context of brand-name coffee shops in Korea. Recent studies have also found evidence of consumer skepticism (Becker-Olsen, Cudmore, and Hill 2006; Forehand and Grier 2003). Schröder and McEachern (2005) found that young consumers in the United Kingdom were skeptical and lacked trust regarding promoted CSR activities, even though they held high expectations for the companies to be socially responsible. When the motive of CSR is perceived to be insincere (Barone, Norman, and Miyazaki 2007), and when consumers perceive a discrepancy between brand concepts and CSR activities, consumers do not reward firms (Torelli, Monga, and Kaikati 2012). Torelli, Monga, and Kaikati (2012) suggested that inconsistency between a brand concept and CSR information can cause disfluency of CSR information and a decline in evaluations. Therefore, the potential positive impact of a social initiative depends on the consumer’s evaluation of that initiative in relation to the firm, rather than on the CSR action in itself. In this paper, we focus on the perceived fit between CSR and coffee brands. We posit that CSR initiatives that are consistent with brand personality positively affect coffee brand loyalty. Second, previous studies have not understood the effect of two types of brand identification in the relationship between CSR and brand loyalty. As most consumption at the brand coffee shop is continuous or periodical, branding is critical. Strong brands gain consumers’ trust and make them feel safe in making intangible purchases. Thus, it is important to understand the effect of CSR on customers’ identification with and loyalty toward brands. Even satisfied customers easily abandon brands, though companies

try their best to ensure quality service. T. Jones and Taylor (2007) suggest that service brand loyalty is similar to loyalty in interpersonal relationships, supporting the notion that service provider–consumer relationships can approximate friendships in some senses. Accordingly, identification with a coffee shop brand can develop into strong and long-lasting service brand loyalty. Considering that the industry’s standardization makes it hard for coffee shop brands to make loyal customers and that CSR is relatively new for the coffee industry, as above mentioned, brand identification based on CSR information can be a critical success factor for coffee shop brands. To our knowledge, several hospitality studies have recently examined the potential effect of CSR on brand loyalty. C.-J. Wang (2014) shows that ethical and sustainable practices of Taiwan hotels have positive effects on employee affective organizational commitment, organizational innovation, and customer loyalty. Liu et al. (2014) indicate that perceived-CSR initiatives can enhance customer preference and loyalty in casinos. Focusing on Spanish hotel industry, prior studies suggested that CSR affects customer loyalty through trust, customer–company identification, and satisfaction (Martínez, Pérez, and Rodríguez del Bosque 2014; Martínez and Rodríguez del Bosque 2013). Ekinci, Sirakaya-Turk, and Preciado (2013) found that customers who identified with the tourism destination brand show higher levels of brand loyalty. Despite their unique attributes, it is hard to find the effects of these two types of brand identification among prior research. Nevertheless, understanding relative difference of personal and social identification with coffee brands can provide practical implications for marketers. Moreover, in the brand coffee shop context, it is a relatively new approach to examine the effects of CSR-based identification on brand loyalty. The present study attempts to uncover the mediating role of these two types of brand identification (personal and social) in the effect of CSR-brand fit on service brand loyalty with coffee shop customers. Third, in the hospitality industry, despite growing interest in fostering customer participation, empirical research is relatively limited, and little is known about its role in brand loyalty development (So, King, Sparks, and Wang 2014). Moreover, the present research is also the first to examine how customer participation in CSR activities influences the process of loyalty formation. We propose that the effect of CSR-brand fit on service brand loyalty can be strengthened through customer participation in CSR activities. Prior studies note that consumers are not very much aware of CSR initiatives (Pomering and Dolnicar 2009). This lack of awareness can create a discrepancy between consumer attitudes and behaviors (Bhattacharya and Sen 2004). Many argue that firms need to better contextualize CSR initiatives for consumers. To help firms do so, we need to find a mechanism to increase people’s awareness of, and positive

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Loyalty et al. reaction to, a firm’s pro-social activities. Considering that the increasing usage of new media (e.g., smartphones and online social media) enables customers to participate easily in brand-related activities, it is of significance to examine the role of customer participation.

Theoretical Background and Hypotheses Development Symbolic Consumption and Brand Identification Customers who perceive themselves as elegant or exotic are more likely to patronize Starbucks (Shih and Chang 2007). Brands are a particularly important medium for satisfying consumer’s consumption. This indicates that brand coffee shop customers feel that their selves are linked to their selfdefinitional needs (Bhattacharya and Sen 2003), because their symbolic nature allows consumers to recognize themselves in the brands and endow their personal identity with significance or differentiate themselves from their reference social groups (Escalas and Bettman 2005). Symbolic consumption describes the fundamental part in the creation, enhancement, maintenance, transformation, disposition, expression, association, and differentiation of the self (Bhat and Reddy 1998; Dittmar 2008). For instance, Belk (1988) explains how possessions have an important role in creating the self, expression of the individual’s personal achievement, representation of interpersonal ties, demonstration of cultural values, and exhibition of social status. By the same token, people’s notions of self can be linked to their possessions and the services they use, such as the tourism destinations they visit (Ekinci, Sirakaya-Turk, and Preciado 2013) or brand coffee shops they visit (Kang, Tang, and Lee 2015; Kim and Jang, 2014). Consumers can define themselves, at least in part, according to their role as consumers of companies and on the basis of the collective identity that they attribute to the corporate brand (Currás-Pérez,Bigné-Alcañiz,and Alvarado-Herrera 2009).Consumers form strong relationships with brands based on a sense of community, rather than on an actual belonging. Bhattacharya and Sen (2003) call this kind of deep, meaningful relationship “CompanyConsumer (C-C) identification.” They define C-C identification as an active, selective, and volitional act motivated by the satisfaction of one or more self-definitional (i.e., “Who am I?”) needs . . . they cannot be unilaterally imposed by companies; they must be sought out by consumers in their quest for selfdefinitional need fulfillment. (Bhattacharya and Sen, 2003, 77)

Consumers usually identify a service with a corporate brand (e.g., Starbucks for coffee; Wendy’s for fast food). In this sense, C-C identification and self-brand identification can

be used interchangeably (Sen, Du, and Bhattacharya 2014). Many service studies used both brand identification as C-C identification (Ekinci, Sirakaya-Turk, and Preciado 2013; He and Li 2011; Nam and Ekinci 2011; So et al. 2013). However, as mentioned above, the current study attempts to investigate two types of self-brand identification: personal identification and social identification. It is worthwhile to examine these two identification types, considering their own unique attributes (Del Río, Vázquez, and Iglesias 2001). The symbolic consumption occurs in “private” (or inward facing) and “socio-cultural world” (or outward facing) contexts (Elliott and Percy 2007; Richins 1994). The privateself-related consumption objectsaremedia for facilitatingthe creation and expression of the self. Consumption choices, objects, and practices create the individual self by saying something about the consumer or adding something to their self-concepts (Belk 1988). This private context includes personal and social cognitions, feelings, and behaviors of who the person is, or thinks he or she is. A consumer implies “I am what I wear, hear, see, and otherwise sense or experience; the times and places at which we do these things and the company in which we do them” (Shipman 2004, 278). This can be called “personal identification,” which stems from a perceived affinity between the private self and brand. The socio-level consumption objects represent something about the individual’s social self, including status, prestige, and association with or disassociation from a group (Sørensen and Thomsen 2006). Social identity involves one’s voluntary membership in specific groups or organizations. Consumers reinforce their social identity by confirming their membership in social groups and demonstrating this membership to other people. Consumers interested in this function will highly value those brands that enjoy a good reputation among the groups they belong to or aspire to be part of (Long and Schiffman 2000). This kind of self-brand identification is, thus, a form of social identification. In sum, personal identity deals with the private self, whereas social identity deals with the public self.

CSR-Brand Fit and Brand Identification In various research streams in marketing, such as brand extensions, co-marketing alliances, and sponsorships, many studies have emphasized the importance of perceived fit (Aaker and Keller 1990;Rifon et al. 2004). Research on mental processing of a sponsor’s association with a property indicates that individuals exhibit a bias toward those sponsoring brands that are related to the event (Rifon et al. 2004; Speed and Thompson 2000). That is, consumers are more likely to identify a brand as a sponsor of an event if there is some relationship between the product (or service) and the event than if there is no relationship (Pham and Johar 2001). In the context of a co-branded hotel-restaurant,

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Ashton and Scott (2011) revealed that perceived brand fit is positively related with purchase intention. Perceived fit in a CSR context is defined as the perceived link between a cause and the firm’s product line, brand image, position, and/or the target market (Becker-Olsen, Cudmore, and Hill 2006). For instance, CSR-brand fit could be high if a brand and a social cause share a similar value (e.g., the Dove campaign for real beauty, Home Depot and Habitat for Humanity, or the GeneralMotors campaign for traffic safety). If McDonald’s conducts a campaign for the prevention of AIDS, CSR-brand fit would be relatively low, because the cause (AIDS) seems to be unrelated to the McDonald’s service or its brand image. Perceived fit is important because it influences how much thought people give to a relationship, such as regarding increased elaboration about the firm, social initiative, and the relationship itself when perceived inconsistencies with prior expectations and information exist (Forehand and Grier 2003; Meyers-Levy and Tybout 1989). Torelli, Monga, and Kaikati (2012) suggested that inconsistency between a brand concept and CSR information can cause disfluency of CSR information and a decline in evaluations. Findings of prior research on perceived fit are consistent with the network theory, which states that high levels of perceived relatedness create positive consumer attitudes toward firms or brands because consumers regard the firm’s actions as credible and appropriate (Speed and Thompson 2000). Congruence theory is one of the theories used to support the effects of fit. It suggests that storage and retrieval of information from memory are influenced by relatedness or similarity. The more congruent, the better the association and retrieval (Lafferty 2007). Thus, when there is a good fit between a brand’s CSR activities and consumers’ perceptions and expectations related to the company, consumers can more easily integrate the company’s CSR activities into their cognitive structure (Becker-Olsen, Cudmore, and Hill 2006). Much like the structure of knowledge about other people, consumers’ knowledge about a brand exists as an interrelated set of company characteristics, such as culture, climate, values, and comparative position (Bergami and Bagozzi 2000). In an era of symbolic consumption, consumers express their identities and communicate with others by associating themselves with brands through consumption. This pattern is consistent with self-expansion theory, which posits that people possess an inherent thirst for self-expansion or a desire to incorporate others (here, brands) into their conception of self (Aron et al. 2005). Consumers’ identification with a brand engaged in contributing to society can enhance consumers’ self-esteem. Orth, Limon, and Rose (2010) demonstrated that brand personality characteristics facilitate attachment or commitment to the brand. When a firm’s CSR activity has a good fit with its brand, consumers will perceive a brand to be more attractive and credible. This

perception will foster the belief that a brand shares, or conforms to, consumers’ own values and will boost their selfesteem to the extent that it supports the brand. Self-concept research suggests that people are generally more likely to identify with a brand with higher CSR to enhance their selfesteem and project a more ethical social image (Aquino and Reed 2002). However, socially responsible behavior is private behavior related with enhancing self-esteem (Batson 1987; P. Sparks and Shepherd 1992) and public behavior related with social responsibility or social bonding (Myers 2010). According to these considerations, doing good in a credible and appropriate way can make consumers feel attracted to the brand as it has certain desirable private and social values that are in line with the way they are or with how they would like to be (Lichtenstein, Drumwright, and Braig 2004). Kim and Jang (2014) suggested that brand coffee shop customers want to fulfill their individual values (e.g., materialism) and social values (e.g., conspicuous consumption and reference group) besides functional values (e.g., coffee quality and service quality) through consumption. We thus expect that CSR-brand fit will increase consumers’ personal and social identification because of the symbolic load of CSR by embodying personality attributes, such as altruist or civil minded, and by signaling belongingness to a socially responsible, capable group. Hence, Hypothesis 1a (H1a): CSR-brand fit will increase consumers’ personal identification with a brand. Hypothesis 1b (H1b): CSR-brand fit will increase consumers’ social identification with a brand.

Service Brand Loyalty Does CSR influence the process of service brand loyalty formation? Several studies have found that CSR has an indirect effect on service brand loyalty via brand identification (He and Li 2011; Marin, Ruiz, and Rubio 2009). When people identify with a brand, they become intrinsically motivated to behave in a manner consistent with its interests (Hughes and Ahearne 2010). Loyalty is a behavioral expression of a person’s attitude toward, and affection for, a brand. Customers can be promoters of a company’s brands. Organizational identification research indicates that when customers identify with a company, they tend to purchase and recommend the company’s products and services more (Ahearne, Bhattacharya, and Gruen 2005; He and Li 2011). Hospitality literature also provided evidences of brand identification influencing loyalty relation. They suggested that brand identification is a predictor of hotel brand loyalty (Martínez and Rodríguez del Bosque 2013, 2015; So et al. 2013). Moreover, Kim and Jang (2014) revealed that symbolic consumption tendency that is related with both individual values and social values affects brand coffee shop

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Loyalty et al. customer loyalty. Kang, Tang, and Lee (2015) suggested that customer self-congruency (general brand-user image and customer’s own self-concept) is a predictor of brand loyalty for brand coffee shop customers. In their study, selfconcept refers to an individual’s perception of self in relationship to both private and social characteristics, such as lifestyle, social class, and gender role. Thus, Hypothesis 2a (H2a): The more consumers personally identify with a brand, the more loyal they will be to the brand. Hypothesis 2b (H2b): The more consumers socially identify with a brand, the more loyal they will be to the brand. Most research related to the effects of CSR on consumer attitudes and behavior has used an experimental approach in which consumer awareness is manipulated (Pomering and Dolnicar 2009). If consumer awareness is low, the effect of CSR on consumer behavior is nominal or insignificant. How should one make consumers aware of CSR activities and strengthen the consumer–brand relationship as well? We suggest customer participation as a key variable that can help marketers achieve both goals.

Customer Participation as a Self-Signaling One of the most important and fundamental trends in contemporary consumer society is the progressive inclusion of consumers in the processes where value is produced around brands (Arvidsson 2008). Research identifies customer participation as a key variable in such psychological responses as perceived quality and customer satisfaction (Bendapudi and Leone 2003). In particular, service experiences are essentially the outcomes of interactions among a service company, employees, and customers. Due to the characteristic of inseparability of service, customers participate at some level in creating the service as partial employees and in ensuring their own satisfaction (Bitner et al. 1997; Chen and Raab 2014). We define customer participation as both attitudinal and behavioral constructs beyond consumption. Uzkurt (2010) concluded that customer participation is an expression of a customer’s informational, physical, behavioral, and emotional contributions to the stages of the service process (i.e., provision, production, presentation, and evaluation) and his or her willingness and ability to contribute to increasing customer satisfaction and service quality as well as create value. Yi and Gong (2013) concluded that customer participation behavior involves not only information seeking, information sharing, and responsible behavior but also personal interaction between customer and service provider in a certain way. Moreover, the increasing usage of new media (e.g., smartphones and online social media) enables customers to

participate easily in brand activities or interact with other customers. Hospitality literature widely supports the potential benefits of customer participation. For instance, Y. Wang and Fesenmaier (2004) revealed that leveraging customer participation behaviors can allow tourism brands to attract and retain more customers, convert browsers to buyers, and help brands gain additional insights into their business. Recent research suggests that engaging tourists post-trip through social media could facilitate visitors becoming advocates and ambassadors for the destination by talking to other users and asking their opinions (Mistilis, Buhalis, and Gretzel 2014). In addition, online user-generated reviews affect consumers’ attributions of service quality (Browning, So, and Sparks 2013) and perceptions of trust in the hotel (B. A. Sparks and Browning 2011). Prior research has suggested different reasons why customer participation in CSR activities helps build consumer–brand relationships. One explanation for the facilitating effect of customer participation is that participation reduces psychological distance and thereby increases identification with brands. Active participation in CSR activities is one of the strongest types of support for CSR. Purchasing a product or a service is a way of participating in a CSR activity, but sometimes, making a purchase is not sufficient enough to make consumers aware of the firm’s CSR efforts. Prior research has found that the personal importance (Haley 1996) or relevance (Creyer 1997) of the issue strengthens consumers’ evaluation of a company’s CSR. In other words, when consumers feel close to a CSR issue, they evaluate the firm or product more positively. According to Kennedy, Olivola, and Pronin (2009), when the pro-social benefit of a CSR activity is salient, consumers feel a smaller psychological distance from CSR and more readily participate in charitable giving. The corollary to this is that doing something good for someone reduces the psychological distance between the self and the object. Another explanation is based on social identity theory, which states that people are likely to identify with a brand when they believe it is capable of maintaining and enhancing their self-esteem (Tajfel 1982). Because participating in “doing good” can function as a way of presenting customers’ self (J. D. Brown and Smart 1991), this enhances people’s self-image, and thus reinforce consumers’ identification with brands (P. Sparks and Shepherd 1992). Customers participate when they anticipate benefits from the relationship (Ennew and Binks 1999). Even the most altruistic acts confer benefits on the helper, such as enhanced self-esteem (Batson 1987) and an opportunity to make a good impression on others (Arnett, German, and Hunt 2003). These two benefits are closely related to both personal and social identification. However, customers’ CSR participation is essentially different from employee participation. If employees participate

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in CSR actions, their behavior can more strongly affect their social identification with the company than it can affect their personal identification. This is supported by the humanistic approach to employee participation, which views participation as satisfying social needs such as belonging (Joensson 2008). Ashforth and Mael (1989) also support the possible existence of asymmetric influence. People use belonging to refer to psychological oneness with a social entity (e.g., a firm) stemming from actual membership (e.g., of an employee) or symbolic membership (e.g., of a current or potential customer). Given that symbolic relationship is an inherent attribute of customer–brand relationship, consumers’ participating behavior more strongly affects their personal identification with the brand. This is because general CSR participation is mostly a private behavior indicating one’s character, lifestyle, image, and values, rather than one’s social status or belonging to a certain group per se. Of course, participation can vary across different dimensions— in particular, public or private. In some particular cases, participating in a CSR program can represent one’s social status because of the characteristics of the brand (e.g., participating in a luxury brand’s CSR program). However, we examine how the most common type of CSR participation affects brand identification. Moreover, prior studies suggest that customer participation can be intrinsically attractive and enjoyable (Dabholkar and Bagozzi 2002). Focusing on the benefits of CSR participation, we can speculate that intrinsic rewards would be more robust in producing lasting happiness or satisfaction than extrinsic rewards based on motivation research (Deci and Ryan 1985; Grant 2007). Intrinsic rewards would be more related to personal identification, which is based on mirroring private self, whereas extrinsic rewards would map relatively more onto social identification, given that social identification derives from the sense of public gaze (Ryan and Deci 2000). Thus, when consumers participate in a firm’s CSR activities, they identify with a brand more personally than socially because that participation is a way of expressing their own value system and enhancing self-esteem through reducing the psychological distance between the private self and the brand. However, this asymmetric influence does not occur for non-participating consumers. Therefore, Hypothesis 3 (H3): Customer participation moderates the influence of CSR-brand fit on consumers’ personal and social identification with a brand. Hypothesis 3a (H3a): For non-participating customers, the influence of CSR-brand fit on personal identification is not different from the influence on social identification. Hypothesis 3b (H3b): For participating customers, the influence of CSR-brand fit on personal identification is stronger than the influence on social identification.

When a person identifies with a brand, his or her perceptions of membership become embedded in a general selfconcept (Riketta, Van Dick, and Rousseau 2006). The individual’s need for self-definition and social identity can transform a simple sense of identification into a powerful feeling of attachment (Bergami and Bagozzi 2000), which is then expressed as brand loyalty (Kang, Tang, and Lee 2015; Kim and Jang2014; Martínez and Rodríguez del Bosque 2013, 2015; So et al. 2013). When consumers form a relationship with a brand, their participation in the brand’s CSR activities may strengthen the link between their own personal and social identification with the brand and loyalty to it. Customers and employees co-create relational value through their sense of enjoyment in building relationships; when consumers perceive personal and social benefits from a brand, they show more commitment to the brand. Therefore, participation in social initiatives should increase the influence of personal and social identification on service brand loyalty. When consumers cooperate with a brand’s CSR action and feel a sense of consistency between their private selfimage and the brand image, they should feel connected to the brand. Generally, participation in CSR initiatives is more a private behavior reflecting one’s self-image, values, lifestyle, and character than it is a public behavior where extrinsic rewards would map based on the sense of public gaze (Ryan and Deci 2000). Thus, this kind of prosocial behavior enables consumers to feel more personal identification with a brand. In other words, once identified with the company, consumers use consumption more as a way of expressing their own personal identity than as a way of satisfying needs of belonging or signaling their social status. Thus, personal identification may have a stronger influence on loyalty than social identification does in the participation situation, whereas these differential influences may not be observed among non-participants. As a result, Hypothesis 4 (H4): Customer participation moderates the influence of personal identification and social identification on service brand loyalty. Hypothesis 4a (H4a): For non-participating customers, the influence of personal identification on service brand loyalty is not different from the influence of social identification. Hypothesis 4b (H4b): For participating customers, the influence of personal identification on service brand loyalty is stronger than the influence of social identification. Exhibit 1 articulates the influences of CSR-brand fit on brand identification and service brand loyalty. It also shows customer participation in CSR as a moderator in the service brand loyalty formation process.

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Exhibit 1:

are common in results based on retrospective self-reports (Smith, Bolton, and Wagner 1999). Thus, we believe that the scenario approach is a desirable and valid method for this study. First, all participants were asked to state the brand name of the coffee shop they mainly visit and the reason they prefer that coffee shop. After reading the scenario (see Appendix A), they answered the questions regarding that coffee shop. The scenario asked participants to imagine that they were at their coffee shop when an employee recommended participating in a CSR program. Participants who stated that they would not want to participate in such an activity continued to answer additional survey questions, whereas those who stated they would be interested in participating were asked to read a scenario that involved a participation situation (supporting children of coffee farms by purchasing fair-trade coffee and composing a message for them). After reading the scenario, participants completed unrelated filler questions before answering the survey questions. Thus, all participants were aware of the firm’s CSR activities, though not all of them had agreed to participate in those activities. The effectiveness of the scenario was checked with two questions: “The situation described was realistic” and “I had no difficulty imagining myself in the situation” (Dabholkar and Bagozzi 2002). The scenario was considered highly realistic (7.83 and 7.94 on a 9-point Likert-type scale).

Conceptual Framework.

Note. CSR = corporate social responsibility; H = hypothesis.

Method Participants and Procedure The survey was completed by 298 randomly selected customers of brand coffee shops in Korea. We selected a coffee brand shop because it is one of the most rapidly growing service industries in Korea. The number of name-brand coffee shops was only 1,500 in 2006 but grew to more than 9,400 by 2010 (Kim 2011). A random sample of coffee brand customers was collected near various coffee brands in Seoul, Korea. A reasonable attempt was made to randomize the sampling process via selecting random days for data collection. Respondents were paid rewards (approximately US$5) as an incentive to participate. After inspecting data, we eliminated fifty-one cases owing to incomplete responses, leaving 237. The sample size was considered appropriate based on the level recommended by Bagozzi and Yi (2012). The final sample consisted of 133 (53.8 percent) males and 104 (42.1 percent) females. Of these, 110 (46.4 percent) were office workers, 109 (46.0 percent) were students, seventeen (7.2 percent) were housewives, and one “other” (0.4 percent). Their mean age was 30.73 years (range from twenty to fifty-eight years), and the age distribution was twenty to twenty-nine (49.8 percent), thirty to thirty-nine (33.3 percent), forty to forty-nine (14.3 percent), and fifty to fifty-nine (2.5 percent). Most respondents were active users of coffee shops; 71.3 percent of them visited a coffee shop at least once a week, and 26.6 percent did so every day. It is safe to say that they are representative of brand coffee shop customers in Korea, where most customers are young people in their twenties and thirties. To test the research hypotheses, we used a quantitative method that included an experimental scenario and a survey questionnaire to measure customers’ perceptions with respect to the constructs. We examined customer participation using a dichotomous approach; that is, either participation or non-participation. Based on prior research (Hess, Ganesan, and Klein 2003; Rishika et al. 2013), we used experimental design to reduce biases from memory lapses, rationalization tendencies, and consistency factors, which

Measures Existing well-established multiple-item 7-point Likert-type scales, ranging from strongly disagree (1) to strongly agree (7), were adopted to measure most of our variables (see Appendix B). CSR-brand fit.  Defined as the perceived link between a cause and a firm’s brand image and/or core service, CSR-brand fit was measured with two items. They were modified from Becker-Olsen, Cudmore, and Hill’s (2006) measures (“This coffee brand’s CSR program is well matched/consistent with its brand image, service, or products”). Brand identification.  Based on Fournier (1998), brand identification is defined as the perceived congruency between the brand and the private/social self. We measured personal identification using four items (“This coffee brand is generally in line with my image/values/lifestyle/character”) and social identification using four items (“This coffee brand is in line with my public image/expresses my social status/ shows people who I am/is in line with the image of my social group”). Service brand loyalty.  Following Oliver (1999), service brand loyalty is defined as a deeply held commitment to repatronize

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Exhibit 2:

Results of the CFA and Correlations. Construct Items

Standardized Factor Loading

CSR-brand fit  X1  X2 Personal identification  X3  X4  X5  X6 Social identification  X7  X8  X9  X10 Service brand loyalty  X11  X12  X13

Cronbach’s α

AVE

.95 .95

.95

.90  

.88 .94 .96 .96

.97

.88      

.81 .85 .93 .93

.93

.78      

.87 .94 .82

.91

.77    

Correlations Among Factors and Chi-Square Difference  r CSR-brand fit ↔ Personal identification CSR-brand fit ↔ Social identification CSR-brand fit ↔  Service brand loyalty Social identification ↔ Service brand loyalty Personal identification ↔ Social identification Personal identification ↔ Service brand loyalty

Δχ2

.79***

8.67***

.41***

5.30***

.48***

6.10***

.44***

5.53***

.56***

6.70***

.53***

6.55***

Note. AVE = average variance extracted. ***p< .001.

(CFA) with the maximum likelihood estimation method. We grouped the items of all variables in a single factor. As the analysis suggests that the data were multivariate non-normal, we used bootstrapping to generate parameter estimates for subsequent model analysis. CFAs of the four factors showed a satisfactory fit: χ2 = 135.16, df = 59, p = .00, comparative fit index (CFI) = .99, non-normed fit index (NNFI) = .98, root mean square error of approximation (RMSEA) = .07, standardized root mean square residual (SRMR) = .05. Convergent validity is confirmed when (1) all factor loadings are significantly more than about .6, (2) the average variance extracted (AVE) is greater than the variance unexplained (AVE > .50), and (3) composite reliability is greater than .6 (Bagozzi and Yi 1988; Fornell and Larcker 1981). The results reported in Exhibit 2 show strong convergent validity and reliability (Cronbach’s α> .9). Discriminant validity is achieved because the AVEs of all variables are higher than the squared correlations of any pair of variables as shown in Exhibit 2 (Fornell and Larcker 1981). Additional evidence involves comparing a model in which each pair of inter-factor correlations is constrained to 1 with an unconstrained model. In all six cases, the chisquare difference was significant at p< .01 (Anderson and Gerbing 1988). Therefore, discriminant validity was supported. We also ensured content validity through an extensive review of the literature and the expert judgment of academics. Three marketing experts (two doctors of marketing and a doctoral student) judged the degree of measure relevance. In addition, we tested whether there is common method bias in our measurement. To assess common method bias, we added a question regarding the amount of stress that participants feel in general as a marker variable, which is theoretically unrelated to the other questionnaire items. The correlations between stress and the other variables are very small (.04-.008), and thus, our study does not seem to suffer from common method variance (Lindell and Whitney 2001).

Test of Structured Means

a preferred service and recommend it to someone else. Three items were used to measure this variable (“I will choose this coffee brand in the future/prefer to choose this coffee brand to other brands/will recommend this coffee brand to someone else”).

Results Measurement Model First, we checked for construct-level correlations. We found these to be fairly strong (ranging from .40 to .79) and highly significant (p< .01; Exhibit 2). Then, we assessed reliability and construct validity using a confirmatory factor analysis

To ascertain whether the participation manipulation was effective, we performed an analysis of structured means. Tests of discrete (categorical) moderator variable effects can be performed by utilizing the moderator to divide the sample into groups and performing a chi-square test of the significance of the difference in designated structural parameters across groups (Sauer and Dick 1993). Before testing structured means, it is necessary to establish measure invariance because differential factor loadings could account for differences in means of factors and, therefore, constitute a confounding and rival hypothesis for any effects found. The fit of the CFA model for the participation and non-participation groups was satisfactory: χ2(118) = 183.40, p = .00, RMSEA = .068, NNFI = .98, CFI = .98, and

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Loyalty et al. SRMR = .046. The model with factor loadings across groups constrained to be equal was χ2(127) = 192.16, p = .00. Therefore, the result suggests that factor loadings are practically invariant across the participation and non-participation 2 groups: χ d (9) = 8.76, p> .45. Finally, a test of structured means gave χ2(136) = 227.34, p = .00, RMSEA = .073, NNFI = .97, CFI = .98, and SRMR = .05, with the following results for structured means: Personal Identification MΔ SE t value

−1.89 0.13 −14.24

Social Service Brand CSRIdentification Loyalty Brand Fit −0.49 0.13 −3.70

−0.85 0.14 −5.93

−1.82 0.13 −13.76

Consequently, we see that the means for the non-participation group are significantly lower than the means for the participation group on all four factors, as expected.

Structural Model Structural equation modeling was used to test the proposed model with LISREL 8. The analysis revealed an adequate fit (χ2 = 138.35, df = 60, p = .00, CFI = .99, NNFI = .98, SRMR = .05, RMSEA = .07). Because all the paths were statistically significant (p< .001), H1a, H1b, H2a, and H2b were supported (see Exhibit 3). Taken together, the results indicate that CSR-brand fit influences service brand loyalty via brand identification. We also ran an alternative model, adding a direct path from CSR-brand fit to loyalty. However, model comparison suggests that the alternative model is not significantly better; the additional path (fit → loyalty) is non-significant (β= .15, n.s.), and the model fit is not improved significantly by 2 including the additional path, χ d (1) = 3.19, p> .07. However, the error terms for PI and SI are significantly correlated: Ψ21 = .30 (5.12) or .56 standardized. H3 and H4 address the moderating effect of customer participation. The χ2 difference test was conducted to test the differences in parameter estimates. In the first step, a baseline model was run to test whether the same structural model applies for both the participation and non-participation groups. This baseline model was satisfactory: χ2(120) = 185.76, p = .00, RMSEA = .068, NNFI = .98, CFI = .98, and SRMR = .05. Next, a test of equal factor loadings was performed: χ2(129) = 194.54, p = .00. This indicates that CSRbrand fit more strongly affects both personal identification and social identification in the participation group. Thus, we may proceed to test H3a and H3b. H3a and H3b state that the asymmetric influence of CSR-brand fit on PI and SI occurs only when consumers participate in CSR activities. As predicted by H3a, there was no asymmetric influence in the non-participation group: the path from CSR-brand fit to

PI (γ11 = .51) was not significantly different from the path to 2 SI (γ21 = .37): χ d (1) = 2.42, p = .12. However, in the participation group, the effect of CSR-brand fit was greater on 2 PI (γ11 = .69) than on SI (γ 21= .23): χ d (1) = 8.15, p< .005, supporting H3b. H4a and H4b state that the asymmetric influence of PI and SI on service brand loyalty occurs only in the participation group. In the non-participation group, the effect of PI on loyalty (β31 = .26) was not significantly different from the effect of SI on loyalty—β32 = .26: χ d2 (1) = .002, p = 1.00—supporting H4a. In the participation group, the effect of PI on loyalty (β31 = .49) was not significantly greater than 2 the effect of SI on loyalty (β32 = .27): χ d (1) = .96, p> .32. Thus, H4b is not supported, although the difference in paths is in the predicted direction (see Exhibit 4). One might wonder whether the difference between the two groups was due to a difference in attitude toward coffee shops on the part of the participant and non-participant groups. To explore this possibility, we measured respondents’ attitude toward brand coffee shop. As there was no difference in attitude between the two groups (Mparticipant = 4.46, Mnon-participant = 4.28, t = 1.06, p> .10), we can exclude this possibility.

Discussion and Implications The results can be summarized as follows. First, CSR-brand fit enhances consumers’ personal and social identification with brands. Second, customer participation strengthens the customer–brand relationship. Third, the relative influence differs between participation and non-participation groups. When consumers participated in CSR activities, the effect of CSR-brand fit was asymmetric: the effect on personal identification was greater than the effect on social identification. In contrast, the effect of CSR-brand fit was symmetric for the non-participation group. The overall model results support the conceptualized model. Although the hospitality literature has recognized the emerging importance of CSR as a strategic imperative for building customer–brand relationships (Gracia, Bakker, and Grau 2011; Han and Ryu 2009; Hyun 2010; Swimberghe and Wooldridge 2014), an active engagement with CSR issues appears to be a relatively new phenomenon in the coffee industry (Hamann et al. 2015). Considering that the industry’s standardization makes it difficult for coffee brands to build loyalty for brand coffee shops, our findings provide insights into the relationships between the CSRbrand fit and focal constructs underlying the process of service brand loyalty formation as well as the role of customer’s participation in CSR initiatives. First, the effect of CSR-brand fit on building brand loyalty has not been fully investigated by researchers. Prior research showed that the brand concept–CSR initiative inconsistencies result in negative outcomes, such as disfluency of CSR information and lower firm evaluation

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Exhibit 3: Results for H1a, H1b, H2a, and H2b.

Note. CSR = corporate social responsibility, PI=personal identification, SI=social identification.

Exhibit 4: Results for H3a, H3b, H4a, and H4b.

Note. CSR = corporate social responsibility, PI=personal identification, SI=social identification.

(Becker-Olsen, Cudmore, and Hill 2006; Torelli, Monga, and Kaikati 2012). The current study provided convincing evidence that perceived CSR-brand fit also has an impact on customer–brand relationships. This result suggests that CSR will not always lead to positive rewards from consumers. We find that firms with the desire to be perceived as doing good may be able to do so through promotion of carefully selected social initiatives. These findings suggest that hospitality companies should be acutely aware of the risk of choosing low-fit CSR initiatives. For example, a restaurant franchise would benefit more from providing their food for the poor rather than campaigning on fighting AIDS. Moreover, managers can enhance consumers’ perceived fit by providing adequate marketing information about the intimate firm–cause relation. They need to investigate what kind of CSR strategy is perceived as highly fit with their brands or services. In-store displays of the companies’ support of causes or issues not only can make consumers aware

of these efforts but also may engender consumers’ identification with their companies. Second, this research is the first to examine how customers’ active participation in CSR activities influences the process of loyalty formation. Customer participation in CSR seems to strengthen consumers’ relationships with brands whose actions and capacities are consistent with their CSR activities. Through active participation beyond mere purchase, consumers have a greater sense that a brand is making a positive contribution to society. Therefore, consumers have a deeper sense of brand identification, which in turn leads to loyalty as an expression of a strong consumer–brand relationship. In our study, respondents who actively participated in the CSR campaign showed higher brand loyalty than nonparticipants did. More to the point, even non-participants purchased the service at the coffee shop. This finding suggests that mere purchase is not sufficient to engage customers emotionally, although purchasing a service is obviously a

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Loyalty et al. kind of CSR participation. If it is practically impossible to design an active participation program, we suggest managers should design advertising messages that emphasize consumers’ participation. For example, Proctor & Gamble recently promoted Pampers diapers through its 1 pack = 1 vaccine for UNICEF campaign. Similarly, Starbucks presents CSR messages such as “You gave three pencils for coffee farm children through purchasing this premium coffee.” Prior research described such mere purchase-contingent donations to a social cause as an embedded premium (Henderson and Arora 2010). In addition, more active, demanding, and visible participation (e.g., volunteering for the cause) can reduce skepticism more than passive participation (e.g., buying a product) can. Managers should thus find ways to attract people to participate in pro-social actions. This is in line with a recent hospitality study on the relationship between customer engagement and loyalty relation (So et al., 2014). Considering that the increasing usage of new media (e.g., smartphones, online social media) enables customers to participate easily in brand-related activities (Rishika et al. 2013), managers should attract customers to volunteer for the cause through SocialNetwork Services (e.g., Facebook and Twitter). Third, we found that CSR-brand fit influences loyalty formation through two types of brand identification (personal and social). Although several hospitality studies have investigated the potential effect of brand identification on brand loyalty (Martínez and Rodríguez del Bosque 2013, 2015; So et al. 2013), this is the first research to examine the relatively different effect of these two types of brand identification in the relationship between CSR and brand loyalty. As Kim and Jang (2014) suggested, brand coffee shop customers want to fulfill their individual values (e.g., materialism) and social values (e.g., conspicuous consumption, reference group) besides functional values (e.g., coffee quality, service quality) through consumption. It is thus important for managers of coffee shop brands to understand these two types of identification. In our study, participation increases the influence of CSR-brand fit in terms of personal identification more than social identification. The hospitality industry should understand the mechanism through which consumer–brand identification is formed and use key factors such as participation to effectively strengthen the consumer–brand relationship. Although hospitality companies cannot force consumers to identify with a brand, they can emphasize the desired characteristics of the brand identity (e.g., warm hearted, competent in helping the weak, and responsible) through advertisements and CSR campaigns (Forehand, Deshpandé, and Reed 2002). In addition, CSR might have a greater influence on personal identification in our study, perhaps because most CSR participation generally tends to be relatively private. We suggest that managers should enhance customer’s social identification with their brands if CSR participation is easily noticed by the public, if participation reflects one’s

social status, or if participation is a shared activity (e.g., participation through social media).

Limitations and Future Research There are several limitations to the generalizability of our findings. First, we examined the effect of CSR on loyalty with respondents who mainly use certain coffee brands. External validity is an issue here, because we measured outcome variables after presenting survey participants with scenarios just one time. A replication of our study could use a longitudinal design and measure the variables after participants’ repeated experience with CSR programs. Second, this research has focused exclusively on the franchise coffee shop industry. Further research might consider other types of hospitality companies to ascertain the generalizability of the results. Methodologically, we asked respondents to decide whether they would participate in CSR, because it is more realistic to ask people to participate spontaneously than to randomly assign people to participation or non-participation groups. Although we found no significant difference in preference toward coffee shops between the two groups, there is a possibility of selection bias. Future studies can conduct an experiment with randomly assigned respondents to exclude this possibility. This study also suggests several research questions that might be useful in the future. One might investigate what other variables moderate the effect of CSR on personal versus social identification. For example, future studies might investigate the role of compassion and pride in campaign appeals. Oveis, Horberg, and Keltner (2010) note that compassion is associated with an increased perception of self– other similarity, particularly when it involves compassion for weaker individuals, whereas pride is associated with an enhanced sense of similarity to stronger people. If these effects are real, compassion might have a stronger influence on personal identification, because it is more closely related to the perception of personal morality, self-image, and perceived similarity to weaker people. However, pride may have a relatively greater impact on social identification, because it is more closely related to the perception of social status or belonging to a strong group. Alternatively, researchers could examine the moderating effect of program channel (via on/offline); this may have a relative effect on personal and social identification with a brand. Future research can extend the research model by including additional factors that might represent antecedents or outcomes of brand loyalty. For example, perceived-CSR motive may affect brand loyalty via trust (Vlachos et al. 2009). To further advance brand management knowledge, future research could investigate these effects. Given the globalization of the franchise coffee industry, further study of our model with samples from other countries might advance the generalizability of the model.

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Appendix A

Funding

Scenario

The author(s) received no financial support for the research,

In the following scenario, we are interested in your reactions to an experience at a brand coffee shop. We will describe this experience and ask you questions about it. Imagine you are in a ______ coffee shop. After taking a seat, you see what’s on the menu at the counter. When you are about to place an order, an employee suggests that you participate in a campaign, and hands you a brochure that reads as follows: we have supported communities through various CSR programs, such as funding farmer support centers and farmer loans. Now, we plan to support the children of coffee farms who are left uneducated. First, we will build a school for children in Indonesia and send them school supplies. If you buy the premium coffee and write a note, we will deliver your heart to children. Please join our program and give hopes and dreams to the blossoming children.

Appendix B Measurement Scales. Construct Items CSR-brand fit  X1 This coffee brand’s CSR program is well matched with its brand image, service, or products. This coffee brand’s CSR program is well consistent  X2 with its brand image, service, or products. Personal identification This coffee brand is generally in line with my image.  X3 This coffee brand is generally in line with my values.  X4 This coffee brand is generally in line with my  X5 lifestyle. This coffee brand is generally in line with character.  X6 Social identification This coffee brand is in line with my public image.  X7 This coffee brand expresses my social status.  X8 This coffee brand shows people who I am.  X9 This coffee brand is in line with the image of my  X10 social group. Service brand loyalty I will choose this coffee brand in the future.  X11 I will prefer to choose this coffee brand to other  X12 brands. I will recommend this coffee brand to someone else.  X13 Note. CSR = corporate social responsibility.

Declaration of Conflicting Interests The author(s) declared no potential conflicts of interest with respect to the research, authorship, or publication of this article.

authorship, or publication of this article.

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Author Biographies Moon-Kyung Cha has a Ph.D. in marketing from Seoul National University. Her research interests include corporate social responsibility, prosocial behavior, and give happiness. Youjae Yi is a professor of marketing at Seoul National University. His research interests include customer satisfaction, service marketing, and customer value creation behavior. Richard P. Bagozzi is the Dwight Benton Professor of Behavioral Science in Management at the University of Michigan. His research interests include human action, decision making, social identity, ethics, and action.

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