Students:

Alev Selbes & Samira Mohamed

Master of Science in Marketing

Advisor:

Karen Brunsø, Professor PhD

30.08.2010

Århus School of Business

Department of Marketing and

Statistics

-Master Thesis-

Consumer Behaviour Analysis in Relation

to CSR Activities of Cosmetics Brands

Abstract

Corporate Social Responsibility (CSR) has become an important topic in recent years,

especially within the cosmetics industry. The consumers are becoming more involved with

CSR and the demand for socially responsible brands is increasing. On the other hand,

cosmetics brands are implementing more and more CSR activities. This paper focuses on the

CSR activities of the cosmetics brands and how they affect consumer purchase behaviour. A

qualitative research has been conducted, which consisted of in-depth interviews with

cosmetics consumers and an interview with Estee Lauder Companies. Consumers find CSR

an important topic in the cosmetics industry and would to like to see more socially responsible

cosmetics brands. They would like to be informed more about what the cosmetics brands are

actually doing in terms of social responsibility. However, they would like to be persuaded in a

way that the CSR activities of the cosmetics brands are really meant to improve the society

and the environment, not just used as a marketing tool. When it comes to buying cosmetics

brands; quality, price and ingredients are considered to be the main purchase factors by

consumers. However, it can be stated that even though CSR is not considered to be a purchase

factor, it does have a significant impact on the purchase decisions. When it comes to

purchasing cosmetics products, the majority of the consumers are searching for products that

are fragrance free and allergy tested, and that do not contain unhealthy chemical additives (in

relation to the purchase factors “ingredient” and “quality”). These issues are part of the

environmental responsible activities that are provided by several green cosmetics brands, such

Clinique and Aveda.

The cosmetics brands consider CSR as a way to differentiate themselves from their

competitors in order to gain competitive advantage and to raise brand awareness. However,

the activities need to be in alignment with the identity and the image of the brand. In this way,

CSR activities contribute to the brand image while increasing the credibility of these activities

in the consumers‟ mind. Moreover, it is necessary for the cosmetic brands to communicate

their CSR activities to the consumers, in order to inform them continuously and make them

aware about the CSR commitment of the brands. In addition, the cosmetics brands can

cooperate together through certain CSR initiatives in order to increase the credibility of the

importance of CSR in the cosmetic industry. The industry initiatives raise CSR awareness and

support the overall image of the cosmetics industry as well as the image of the cosmetics

brands.

Acknowledgements

This thesis has been written as part of our Master of Science in Marketing study at the Aarhus

School of Business, Aarhus University.

It was a challenge to pursuit and to determine the specific problems of the subject we have

chosen for our thesis in the context of its complexity. Furthermore, searching and receiving

the relevant information turned out be a great challenge as well. However, working on our

thesis has been a great learning experience. We were able to explore and gain more

knowledge about Corporate Social Responsibility in the cosmetics industry.

We would like to thank Aarhus School of Business and our supervisor Karen Brunsø for their

time and support during our thesis period. Karen spent time and effort giving us useful

feedback and support in our research. We would also like to thank Estee Lauder Companies

for their contribution to our thesis. Especially our interview with Isabel Martin was very

valuable for us in order to understand the importance of CSR from commercial point of view.

We are grateful for her time and assistance.

Finally, we would like to thank our families for their support and all the consumers who

participated in the in-depth interviews. Without them, this thesis would not have been

completed.

Alev Selbes & Samira Mohamed

Brussels, 26th

of August, 2010

Table of Contents

1. INTRODUCTION ......................................................................................................................................... 1 1.1 BACKGROUND ........................................................................................................................................................... 1 1.2 PROBLEM IDENTIFICATION .................................................................................................................................... 2 1.3 PROBLEM STATEMENT............................................................................................................................................ 3 1.4 STRUCTURE ................................................................................................................................................................ 4 1.5 DELIMITATIONS ........................................................................................................................................................ 5

2. LITERATURE REVIEW ............................................................................................................................ 6 2.1 DEFINING CSR .......................................................................................................................................................... 6

2.1.1 Definition of CSR .................................................................................................................................................... 6 2.1.2 The Evolution of CSR ............................................................................................................................................ 6 2.1.3 Reasons to Implement CSR ................................................................................................................................. 7

2.2 ACTIVITIES OF CSR .............................................................................................................................................. 13 2.2.1 Internal and External CSR Activities ........................................................................................................... 13 2.2.2 The 3C-SR Model .................................................................................................................................................. 16

2.3 CSR AND INNOVATION ........................................................................................................................................ 17 2.3.1 CSR-driven Innovation ....................................................................................................................................... 17 2.3.2 The Cosmetics Industry ...................................................................................................................................... 18

2.4 DEVELOPMENT OF CSR ....................................................................................................................................... 19 2.4.1 Current Developments of CSR and Consumer Behaviour ................................................................... 19

2.5 CSR AND CONSUMER BEHAVIOUR .................................................................................................................. 21 2.5.1 Need Recognition .................................................................................................................................................. 21 2.5.2 Information Search .............................................................................................................................................. 22 2.5.3 Evaluation of Alternatives ................................................................................................................................. 23

2.6 THEORETICAL FRAMEWORK .............................................................................................................................. 24

3. METHODOLOGY ..................................................................................................................................... 25 3.1 RESEARCH PURPOSE ............................................................................................................................................. 25 3.2 RESEARCH APPROACH ......................................................................................................................................... 25

3.2.1 In-depth Interviews .............................................................................................................................................. 26 3.3 RESEARCH DESIGN ............................................................................................................................................... 26

3.3.1 Company Interview .............................................................................................................................................. 28 3.4 ANALYTICAL APPROACH .................................................................................................................................... 30

4. COMPANY ANALYSIS ........................................................................................................................... 34 4.1 COMPANY BACKGROUND AND HISTORY ....................................................................................................... 34

4.1.1 Isabel Martin’s Background ............................................................................................................................ 35 4.2 CSR AS A COMPANY CULTURE......................................................................................................................... 36 4.3 INTERNAL CSR ACTIVITIES ................................................................................................................................ 36 4.4 EXTERNAL CSR ACTIVITIES .............................................................................................................................. 37

4.4.1 Animal testing and product safety ................................................................................................................. 37 4.4.2 Environmental Activities .................................................................................................................................... 38 4.4.3 Breast Cancer Awareness Campaign ........................................................................................................... 39 4.4.4 MAC AIDS Fund ................................................................................................................................................... 40

4.4.5 Social Activities of Aveda, Clinique and La Mer..................................................................................... 40 4.5 CONSUMER INVOLVEMENT ................................................................................................................................ 41 4.6 COMPETITORS‟ CSR ACTIVITIES ...................................................................................................................... 43 4.7 CSR AND INNOVATION ........................................................................................................................................ 43 4.8 FUTURE CSR OPPORTUNITIES ........................................................................................................................... 45 4.9 ESTEE LAUDER COMPANIES & 3C-SR MODEL ............................................................................................ 46

4.9.1 CSR Commitment of Estee Lauder Companies ........................................................................................ 46 4.9.2 CSR Communication of Estee Lauder Companies.................................................................................. 49 4.9.3 CSR Consistency of Estee Lauder Companies ......................................................................................... 53

4.10 CONCLUSION ....................................................................................................................................... 55

5. CONSUMER ANALYSIS ........................................................................................................................ 57 5.1 DEMOGRAPHIC ANALYSIS .................................................................................................................................. 57 5.2 ANALYSIS OF COSMETICS BRANDS ................................................................................................................. 57 5.3 COSMETICS BRANDS AND CORPORATE SOCIAL RESPONSIBILITY ......................................................... 59

5.3.1 CSR and The Body Shop .................................................................................................................................... 60 5.3.2 CSR and MAC ........................................................................................................................................................ 62 5.3.3 CSR and Estee Lauder ........................................................................................................................................ 63 5.3.4 CSR and Clinique ................................................................................................................................................. 63 5.3.5 Limited CSR Awareness ..................................................................................................................................... 63

5.4 CSR ADVERTISING AND PERSUASION ............................................................................................................ 64 5.4.1 Persuasion and CSR Driven Cosmetics Brands ...................................................................................... 66 5.4.2 Consumers’ CSR Perceptions.......................................................................................................................... 70

5.5 CSR AWARENESS .................................................................................................................................................. 71 5.5.1 CSR Perceptions towards Information Sources ....................................................................................... 76 5.5.2 Consumers’ Value of CSR ................................................................................................................................. 78 5.5.3 CSR Related Cosmetics Consumptions ........................................................................................................ 79

5.6 LOYALTY ASPECTS OF THE COSMETICS PRODUCTS .................................................................................. 81 5.6.1 Recommendation and Discouragement of Cosmetics Brands ........................................................... 84 5.6.2 Loyalty and CSR .................................................................................................................................................... 86

5.7 BRANDING AND COSMETICS PRODUCTS ........................................................................................................ 87 5.8 CONCLUSION ........................................................................................................................................................... 89

6. CONCLUSION ........................................................................................................................................... 92 6.1 OVERALL CONCLUSION....................................................................................................................................... 92 6.2 LIMITATIONS ........................................................................................................................................................... 93 6.3 FURTHER RESEARCH ............................................................................................................................................ 94

REFERENCES ................................................................................................................................................ 96

1

1. Introduction

The first chapter provides background information regarding the importance of Corporate

Social Responsibility in today‟s world, especially within the cosmetics industry. Furthermore,

the purpose of this thesis is described through the problem identification and the problem

statement. Lastly, an overview of the thesis structure is shown and the scope the thesis is

explained in the delimitation part of the introduction section.

1.1 Background

"A good company delivers excellent products and services, and a great company does all that

and strives to make the world a better place." William Ford Jr., Chairman, Ford Motor Co.

Nowadays, Corporate Social Responsibility (CSR) is playing an important role in the rapidly

changing global world. In terms of the word “change”, it can be said that consumers,

companies and their strategies as well as the interaction between these two parties are

evolving based on the characteristics of the globalization. Consumers are more selective and

conscious about the products that they are purchasing and companies are also becoming more

responsible about the products that they are producing, supplying and selling. The reasons

behind these responsible activities are based on consumer demand, legal requirements that are

developing rapidly in the last decade and, the competitive needs of the firms. Hence, CSR is

at the intersection area of the debates about globalization, competitiveness and sustainability

(COM, 2006).

Although it is hard to give a clear definition of CSR, the European Commission defines CSR

as a concept where companies integrate social and environmental concerns in their business

operations and interactions with their stakeholders voluntarily (COM, 2006). The “voluntary”

word itself carries great importance since it renders companies to differentiate themselves

from the ones, which cannot go beyond obeying the law. Another definition of CSR also

overlaps this point of view by defining CSR as actions which appear to further social good,

beyond the interests of the firm and the requirements of the law (McWilliams et al., 2001).

The first models of CSR were introduced in the 1960s. These models linked the social aspect

of CSR directly with responsibilities above and beyond economic and legal obligations

(Meehan et al., 2006). Going beyond law can be exemplified as applying progressive human

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resources management programs, developing non-animal testing procedures, recycling,

supporting local businesses, abating pollution and embodying products with social attributes

or characteristics (McWilliams et al., 2001). Over the past 50 years, these models have been

revised and new models emerged to explain the importance and value of CSR for a

company‟s image as well as long-term growth. Also, as mentioned by William Ford, to be a

great a company includes striving to make the world a better place. Having a successful CSR

strategy is in alignment with striving to reach that goal.

Moreover, in the cosmetics industry it is very important that each and every product of a

brand are produced and sold based on the law and the specific health requirements. But

besides using the right ingredients and obeying the law, applying CSR is more than that. It is

related with caring consumers‟ demand, and the demand of other stakeholders such as

employees, investors and the community (McWilliams et al., 2001).

1.2 Problem Identification

Cosmetics companies do not only implement CSR policies to make the world a better place,

but also see it as way to achieve more growth and long term profit. In order to be successful in

the cosmetics industry, which is growing very fast, it is important to differentiate from the

competitors. CSR can be seen as a way of creating competitive advantage and as an

innovative way in order to be unique in the market.

Moreover, in the cosmetics industry the CSR agenda is consumer driven whereas in other

industries CSR activities are primarily based on compliance and reporting records. Because of

this consumer driven aspect, the cosmetics industry is more aware of being socially

responsible while launching new products. Consumers are becoming environmental friendly

since they are more selective and socially responsible in their choices. They care about where,

how and by whom the products are produced. Moreover, it is important for consumers to

know what ingredients are used and if they add value to environmental institutions or NGOs

by buying the specific product. For example the past couple of years have shown a cosmetics

trend of natural and environment friendly products. Consumers have shown an increased

interest in botanical extracts, minerals, oils and other natural ingredients. Furthermore,

another debated issue is that consumers are also sensitive and responsive to animal testing in

the cosmetics industry. If the specific product or brand has a negative reputation in terms of

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animal testing, ingredient quality or environmental unfriendly production processes;

consumers are not willing to choose those products.

Also, internal CSR activities are just as important as external activities. For this reason CSR is

closely related to employee satisfaction, which is a way of implementing internal CSR

activities. Examples of these internal activities are how employees are attached to the brand,

how they are trained, how they are treated and the benefits that the company can provide for

them such as maternity leave, flexible hours for the working families, promotional

opportunities, etc.

It can be said that creating and strengthening a strong brand image are very necessary in the

globalized context. Therefore, CSR is a good way to enhance the brand value. Avoiding from

irresponsible production processes and employee dissatisfaction will lead a company to a

stronger brand image while protecting the brand name from bad reputation. Therefore, it can

be concluded that not having the right and sufficient CSR activities/policies within the

company may lead to competitive disadvantage. Moreover, competitive disadvantage will

harm the brand image and the company will come up with lower profits. In addition, it can be

said that since CSR is one of the important sources of innovation, in the long run lacking CSR

activities and strategies will lead to company failures.

1.3 Problem Statement

Overall, the reasons mentioned above lead us to research how important CSR can be in

consumers‟ buying behaviour in the cosmetics industry. That it is the reason why, we have

stated not having the right and sufficient CSR activities as the problem statement of this

paper. The report is written from cosmetics companies‟ point of view and how important it is

for them to implement CSR activities and use these activities as a possible competitive

advantage. Based on this, the central is formulated which is: “How do Corporate Social

Responsibility activities affect consumers’ buying behaviour in the cosmetics industry?”

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The research questions are stated with their sub questions below:

RQ1) How do cosmetics brands define CSR?

- Can CSR be used as a way to differentiate in the cosmetics industry?

- Does CSR-related innovation have an influence on changing consumer behaviour?

- How important is the consumer demand for cosmetics brands in terms of CSR activities?

RQ2) How do consumers interpret CSR in the cosmetics industry?

- Is CSR an important purchase decision factor for cosmetics consumers?

- How influential are the CSR activities in order to create brand awareness?

- How influential is the peripheral route of persuasion to raise CSR awareness for the

cosmetics brands?

1.4 Structure

The structure of the thesis is shown below in Figure 1:

Figure 1: Thesis Structure

The core of this paper consists of five sections, which are illustrated, in Figure 1. In the

literature review, secondary data concerning CSR, consumer behaviour and the cosmetics

industry are analysed. Furthermore, the methodology provides an overview of the chosen

research approach and the research design. In addition, the company and consumer analyses

Ch. 1 Introduction

Ch. 2 Literature Review

Ch. 3 Methodology

Ch. 6 Conclusion &

Recommendation

Ch. 4 Company Analysis

Ch. 5 Consumer Analysis

5

are provided in order to understand how companies define CSR and how consumers interpret

CSR. After the company analysis and the consumer analysis parts, which means after

answering the research questions, an answer is given to the central question “How do

Corporate Social Responsibility activities affect consumers‟ buying behaviour in the

cosmetics industry?” The answer of the central question is based on the results of the

interviews and the analyses. Finally, recommendations are given on how companies can raise

CSR awareness and how CSR can be more influential on consumers‟ buying behaviour.

1.5 Delimitations

This thesis focused on the central question and the research questions that are formulated

above and did not take other factors of consumer behaviour in consideration due to lack of

time and resources. Furthermore, based on the researchers‟ accessibility, the research was

conducted in Brussels while the results were analysed from a company‟s perspective. The

limitations of this thesis are discussed in the 6th

chapter of this thesis.

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2. Literature Review

2.1 Defining CSR

This paragraph focuses on the definition of CSR, how it evolved over the past 50 years and

the reasons as to why companies implement CSR activities. Also, a short overview is given

about the role CSR plays in the cosmetics industry.

2.1.1 Definition of CSR

Over the years the CSR concept has been defined, redefined and extended. Since the first

modern concepts in the 1950s, it can be concluded that there is no single definition of CSR.

Many different definitions can be found in existing literature regarding CSR, which come

from economists, researchers, organisations, governmental bodies and other institutions

concerning the society. The definition that is used throughout this report comes from the

European Commission that defines CSR as a concept where companies integrate social and

environmental concerns in their business operations and interactions with their stakeholders

voluntarily (COM, 2006).

2.1.2 The Evolution of CSR

In this paragraph information is given about the several definitions of CSR and how it has

evolved throughout the last 50 years. A lot of literature has been written about CSR and every

decade has its own ideas and themes related to this concept.

Howard R. Bowen wrote one of the most significant literatures concerning CSR in 1953. In

his work he questioned what social responsibilities companies may be expected to assume.

Through this question he came up with the following definition of CSR: “it refers to the

obligation of businessmen to pursue those policies, to make those decisions, or to follow those

lines of action which are desirable in terms of the objective and values of our society”

(Carroll, 1999). Archie B. Carroll argued that this definition marks as the beginning of the

modern period of literature on CSR and describes Bowen as the Father of Corporate Social

Responsibility (Carroll, 1999).

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Furthermore, Carroll claims that 1960s marked “a significant growth in attempts to formalize,

or more accurately, state what CSR means” (Carroll, 1999). One of the prominent writers of

that time was Keith Davis who defined CSR as decisions and actions taken for reasons that

are partially beyond the company‟s direct economic or technical interest. Davis argued that

there is a significant relationship between social responsibilities and the power that companies

have over the society.

In the 1970s, more attention was given to stating exactly what the responsibilities of a

company were. An example is the emphasis on anticipating and promoting desirable changes

in the business-society relationships, which became associated with the term social

responsiveness (Meehan et al., 2006). Sethi (1975) formulated a corporate social performance

model distinguishing different corporate behaviours. His model consisted of three behavioural

approaches that reflect different attitudes towards conducting social responsible activities.

These three approaches are social obligation, social responsibility and social responsiveness.

The social responsiveness approach is a corporate behaviour in which both societal and

economic objectives are achieved while having the obligation to anticipate upcoming social

problems and to work actively to prevent them from happening.

Carroll believed that the 1980s and 1990s stood for fewer definitions, but for more research

and alternative themes such as the stakeholder theory, which was made most famous by R.

Edward Freeman. He defined a stakeholder as “any group or individual who can affect or is

affected by the achievement of the activities of an organization” (Carroll, 1999). Freeman

argued that different stakeholders are relevant to a company‟s operations.

Additionally, Carroll expects that in the 2000s more research will be done on how to measure

CSR. More empirical research will be conducted and researchers will focus on how to

implement CSR successfully (Carroll, 1999; Meehan et al., 2006).

2.1.3 Reasons to Implement CSR

Keith Davis (2008) created a model consisting of 5 propositions that describe how and why

companies should take action to protect and improve the welfare of society as well as that of

their businesses. These 5 propositions are the following:

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1. Social responsibility arises from social power.

Companies have power over and influence on the society, since they are able to make

decisions that will have impact on external factors such as the environment, employment

(more jobs or less jobs) and local development (stores, buildings etc.). Due to this influence

and power, Davis argues that companies can and should be hold responsible for sustaining

and improving the society.

2. Business shall operate as a two-way open system, with open receipt of inputs from

society and open disclosure of its operations to the public.

To improve the welfare of the society, Davis proposes an ongoing and open communications

between the companies and the society representatives. This means that the companies need

to listen to what should be done to maintain and improve social welfare. On the other hand,

the society needs to listen to the companies and what they have done so far in terms of social

responsibility.

3. The social costs and benefits of an activity, product or service, shall be thoroughly

calculated and considered in deciding whether to proceed with.

The technical feasibility and economic profitability as well as the short term and long term

impact of all business activities on society need to be taken into consideration before

undertaking them.

4. The social costs related to each activity, product or service shall be passed on to

the customer.

Financing activities to improve the welfare of the society might be profitable for companies.

Therefore, it can be expected that companies should pass the extra costs made by having

social activities to consumer. This can be done through higher price for socially responsible

products and services.

5. Business institutions, as citizens, have the responsibility to become involved in

certain social problems that are outside their normal areas of operation.

If a company has the expertise and the know-how to solve or prevent a social problem, it

needs to be held responsible for solving that problem. It should not matter whether or not a

9

company is directly associated to a societal problem. In the end, all citizens and companies

will benefit from a generally improved society.

Also, the importance of CSR is not only related to improving social welfare but also to a

company‟s motivation to take CSR actions. According to Lynes and Andrachuk (2008) the

possible motivations for a company to be committed to CSR are: long-term financial strategy

(e.g. investing in efficient and low-emission technologies), eco-efficiencies (e.g. reduction in

expenses as a result of savings achieved through waste reduction), competitive advantage,

good corporate citizenship, image enhancement, stakeholder pressures and a desire to avoid or

delay regulatory actions. Especially the pressures from stakeholders form an important

motivation for a company‟s CSR involvement.

2.1.3.1 Stakeholders

Nowadays, companies are facing the globalisation of markets, increasing intensity of

competition, rapid technological changes, demographic changes, environmental challenges,

changing value systems and changing consumer preferences (Karna, et al., 2001). These

changes in the society influence companies to consider various interest groups in its decision-

making. The interest groups can be referred to as stakeholders. As mentioned before,

stakeholders are identified as “any group or individual that can affect, or is affected by, the

performance of the organisation” (Freeman, 1999). Examples of stakeholders are employees,

shareholders, customers, governments, communities, suppliers and unions. Companies often

face demands from the different stakeholder groups to invest in CSR policies. Also,

recognizing the importance of stakeholders and their demands has benefits for the companies

as well. Building relationships with customers, suppliers and other stakeholders can create a

competitive advantage. Furthermore, it can result to a new proactive corporate strategy that

anticipates societal issues instead of only reacting to them. Based on this, the importance of

CSR is becoming a more significant tool for companies (Karna, et al., 2001).

This report focuses primarily on the stakeholder group “consumers” and how the CSR

activities of cosmetics companies affect their purchase behaviour. Consumers have several

preferences and views to influence a company‟s CSR activities. As mentioned by McWilliams

and Siegel (2001), there is strong evidence that many consumers value CSR attributes.

10

Examples of consumer demands are non-animal tested ingredients, recycling and reducing

pollution.

To meet the consumer demands and to benefit economically, a company can implement CSR

as a differentiation strategy. Examples of differentiation via CSR are recycled products or

organic products. In this way a company can create new demand or can even charge a

premium price for the socially responsible products. It might be necessary to invest in R&D in

order to achieve differentiation. However, these R&D investments can lead to process and

product innovations. There are some consumers who want the products that they purchase to

have certain socially responsible attributes (product innovation), while other consumers also

value knowing that the goods they purchase are produced in a socially responsible manner

(process innovation) (McWilliams et al., 2001).

The CSR differentiation strategy can only be successful if customers know about a company‟s

CSR policy. Advertising is therefore an important tool to create and enhance awareness.

According to Nelson‟s (1970) description of experience goods and search goods, it can be

said that cosmetics products belong to the experience goods category. Consumers can only

understand the true value of cosmetics products after they purchase and use it. Advertising for

experience goods entails more information in which the product is often linked with a

recognized brand name. This association provides the consumer with information about the

product by connecting it with the reputation of the brand. By implementing and creating

consumer awareness concerning CSR, a company is able to create a reputation of reliability

and honesty. More often than not, consumers assume that the products of a reliable and honest

company will be of high quality. Therefore, advertising that provides information about CSR

attributes can be used to build and sustain a reputation for quality, reliability, or honesty

(McWilliams et al., 2001).

Other possible factors of consumer demand are tastes and preferences and the price of

substitute products. The taste and preferences of consumers are influenced by mass media.

Over the years, CSR has become a popular topic in the media where free publicity is given to

a company‟s commitment or lack of commitment to CSR. Also, mass media is able to provide

consumers with new information regarding social attributes and methods of production. It

11

enhances consumer awareness and therefore influences demand for CSR (McWilliams et al.,

2001).

It has to be said that not all consumers value CSR attributes, which means that the price of

competing products will still affect the demand for socially responsible products. On the other

hand, those consumers who do value CSR are willing to pay a higher price for a product with

additional social characteristics than for an identical product without these characteristics. A

consumer survey conducted on behalf of the European Commission showed that 70% of

consumers find it important that a company is committed to social responsibility, while 44%

are willing to pay a higher price for products that are socially and environmentally responsible

(CSR Europe, 2000).

Figure 2 gives a short overview of several stakeholders and their demands as well as a

company‟s reward when implementing CSR activities based on the stakeholders‟ views.

Stakeholders Demands Rewards

Consumers Products with socially responsible

attributes and products produced in a

socially responsible manner.

Increased consumption (through

differentiation and innovation), brand or

company reputation of being reliable,

honest and of high quality.

Employees &

unions

Equality and diversity; working

conditions (e.g. safety); financial

security; work place facilities.

Increased employee loyalty, morale and

productivity.

Government Proactive environmental practices,

certain level of CSR investments.

Increasing consumption of the company‟s

products. Either their own consumption or

that of the consumers they influence.

Community Support for local social services Increasing consumption of the company‟s

products. Either their own consumption or

that of the consumers they influence.

Figure 2: Overview of stakeholders‟ demands and companies‟ rewards

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2.1.3.2 The Cosmetics Industry

CSR has a significant role in the cosmetics industry. Since the consumers use cosmetics

products on themselves (face and/or rest of the body), it creates a personal interaction with the

industry. The consumers are more willing to be informed about the CSR activities of the

cosmetics companies. These activities, in a consumer‟s mind, shows whether a cosmetics

brand is reliable, honest and/or of high quality. The cosmetics industry is known for

pioneering in CSR committed activities and policies. Examples are small-medium enterprises

such as The Body Shop and Aveda, which are considered as pioneers in green marketing that

introduced and reported on their CSR activities. The ambition of these companies was to

change consumers‟ purchase behaviour. They were able to gain consumers‟ trust and market

shares and as a result they were able to compete with large cosmetics companies. The SMEs

(Small Medium Enterprises) have set the standards for CSR and multinational cosmetic

companies are now following suit (OECD 2007).

The main CSR focus for cosmetics companies are:

- Environmental protection such as the control of environmental impact on production sites

and shipping centres, use of bio substances in product formulas and use of recycled

materials.

- Ecological issues such as the preserving the ecosystem. Since cosmetics companies often

use many and different plants in their product formula, it has become an important focus

issue to maintain a positive CSR image.

- Social standards, which can be internal such as empowering employees (to increase

employee satisfaction) and non-discrimination of employees (by sex, age, race, and/or

culture). Social standards can be external as well, for example protecting cultures abroad

by funding local agricultural projects and local agricultural economies.

The majority of the CSR topics in the cosmetics industry are linked with the ingredients used

in the products. Consumers find it important to know what ingredients are used, if they are

healthy ingredients and whether or not they are tested on animals. Furthermore, consumers

like to know where the ingredients come from and if a company is a participant of fair-

trading. The buying decision of cosmetics products is often linked with habit, loyalty or social

status. Therefore, by focusing on consumer demand and raising awareness on other social

responsible issues not only increases consumer loyalty and brand image, but gives a company

13

a competitive advantage through differentiation (OECD, 2007).

As mentioned before, advertising is important to create consumer awareness and gain

competitive advantage. Even though the advertising budget is often limited, a part of the

budget is used to communicate the social and environmental view and the activities of the

company. Advertising is done through mass media as well as through guerrilla marketing (i.e.

direct promotion and product placement in movies and television shows). Another example of

guerrilla marketing is advertisement through the cosmetics stores. Consumers can find

information regarding a company‟s CSR activities in the stores via leaflets, posters or

cosmetics consultants who stress the CSR advantages of the brand. In addition, by using mass

media the companies are able to communicate their CSR messages and use their logo to

increase their positive image. The companies receive free publicity from printed media as

well as through research and reports, consumer guides and CSR-related awards (OECD,

2007).

In addition, cosmetics companies inform their customers through their CSR reports. The Body

Shop was the first company to publish a stakeholder report in 1995. The issues that are

highlighted in the reports are ethical trade, animal testing, supply chain, ecology, human

rights, protection of the planet, packaging, partnership with NGOs, employee treatment and

involvement, ingredients and internal CSR (OECD, 2007).

2.2 Activities of CSR

CSR is becoming a more important concept for companies instead of considering it as a trend

concept. The CSR activities of companies are divided into two parts, which are internal and

external CSR activities, in order to explain how it works into more detail.

2.2.1 Internal and External CSR Activities

Although CSR is usually perceived, recognized and related with end results such as creating a

responsible company, product and/or brand image and focused on the effect on consumers,

internal CSR activities help to create the part under the iceberg for companies. To be more

specific, in the cosmetics industry consumers are becoming environmental friendly since they

are more selective and socially responsible in their choices. They care about where, how and

by whom the products are produced. Easy access to Internet, television and other media

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enables consumers to gain knowledge about the roots of the products as well as the production

processes and this situation leads consumers to responsible buying. Moreover, it is important

for consumers to know what ingredients are used and if they add value to environmental

institutions or NGOs by buying the specific products. Furthermore, another debated issue is

that consumers are also sensitive and responsive to animal testing in the cosmetics industry. If

the specific product or brand has a negative reputation in terms of animal testing, ingredient

quality or environmental unfriendly production processes, consumers are not willing to

choose those products. In addition, it can be said that all safety, energy consumption and

pollution control related activities can be grouped under external CSR activities.

Lately, organizational commitment is considered as one of the most important success

indicators for companies. In that case, internal CSR activities play an extremely important

role to attract the very best employees and to sustain them for the good of the companies in

the long term. Matthews says: “As the media draws attention to environmental and

sustainability issues, consumers are questioning the ethics of companies that may mislead in

their “green” or “fair trade” positioning. As consumers become more knowledgeable and

critical about these issues, they are increasingly sensitive to issues or claims that can be

considered “green washing,” a term used to describe unfounded or irrelevant environmental

claims” (Matthews, 2008). Therefore, internal CSR activities can be stated as a proof for

companies to show that what they are doing is not a green washing but the real self-interest of

the companies towards responsible behaviour. Even though there are companies that do not

truly believe in importance of internal CSR, it creates the basis for implementation of

successful external CSR activities.

Therefore, Meehans and Richards (2006) stress the importance of developing international

management processes for effecting social responsiveness in order to make the organization

more flexible and to have greater responds to external change in the social environment.

Sookram (Guardian, 2009) explains what internal CSR is by saying: “Internal CR refers to all

the practices that are implemented within a company, such as employee development

programmes, health and safety policies, governance practices, creating a motivating and

productive work environment within the organization, and reducing the impact of a

company‟s operation on the environment and product responsibility.” Moreover he adds that

too many companies were placing emphasis on external CSR and were ignoring the

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opportunities and benefits that can be easily derived and quantified from internal CR. Since

many companies are more focused on financial benefits of the outcomes of corporate socially

responsible behaviour, they pay more attention on external CSR activities. On the other side,

it shouldn‟t be forgotten that creating the strong image of being a socially responsible

company comes from applying internal CSR activities which in the end persuades consumers

that all the CSR activities of the company is just not a green washing. Internal CSR activities

are also a very important investment for the companies in the long run which will lead to high

financial benefits through strong organizational commitment. “Early models of CSR emerged

in the 1960s and typically held the “social” aspect of CSR as referring directly to those

responsibilities above and beyond economic and legal obligations. Thus for many, CSR was

and still is synonymous with voluntary and philanthropic acts by business organizations

designed to alleviate social ills or benefit a disadvantaged group chosen by the corporation‟s

managers” (Meehan et al. 2006). On the other side, real life business cases show that this

belief cannot go further than creating a green washing image in consumers‟ mind. When

companies consider CSR as strength and the social resources are considered as an asset

through successful competitive strategy, the real meaning of CSR is understood and

companies will come up with cost benefits, which are their primary focus.

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2.2.2 The 3C-SR Model

Moreover in order to have a better understanding of CSR, its effect on consumer behaviour

and mutual advantages for the stakeholders Meehans and Richards 3C-SR model is going to

be examined. The three components of this model are: ethical and social commitments,

connections with partners in the value network and consistency of behaviour over time to

build trust (Meehan et al., 2006). The model suggests that in order to be a “good corporate

citizen” it is impossible to separate these three elements of the 3C-SR model. Figure 3 shows

an overview of the 3C-SR model.

Figure 3: The 3C-SR Model

The model suggests that ethical and social commitments stand for the social resources, which

are ethical standards, social objectives of the organizations such as its mission, strategic

objectives, strategy programmes, organizational policies and corporate culture. Furthermore,

connections with partners in the value network can only be sustained by having it as complex

constellations but not in sequential chains. The right fit between customers and the

competencies of the companies has to be achieved and improved. And lastly, consistency of

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behaviour has been mentioned as the behavioural element of social resources over time and

observed in all facets of organizational operations.

2.3 CSR and Innovation

This paragraph describes whether CSR can be used as an innovative tool and how CSR-driven

innovation can play a role in the cosmetics industry.

2.3.1 CSR-driven Innovation

CSR-driven innovation builds on the ideas of user-driven innovation (input from consumers)

and company-driven innovation (internal ideas and development). It results from a company‟s

ambition to improve social or environmental conditions. Also, an innovation can be further

encouraged by introductions of new technologies, the development of engineering skills and

consumer demand as well as the local, national and global concern for CSR-related issues and

stakeholders‟ wishes.

To create socially responsible innovations depend on a company‟s level of CSR involvement.

There are different levels of CSR involvement. The importance of CSR depends on how far

companies implement the concept into their business structures. For example (Clarkson,

1995):

- Companies with reactive CSR strategies do not take social responsibility and do less than

what their stakeholders require.

- Companies with defensive CSR strategies acknowledge social responsibility but conduct

the minimal obligations.

- Companies with accommodative CSR strategies accept social responsibility by conducting

all that is required.

- Proactive companies anticipate social responsibility and do more than is required.

In addition to the examples above, Porter and Kramer have defined another type of CSR,

namely strategic CSR (Porter and Kramer, 2006). Companies that use a strategic CSR not

only accept and anticipate social responsibility (and therefore proactive) but also integrate it

into their core business strategies. This means that CSR is integrated into the company‟s

innovation process as well.

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Four types of CSR-driven innovations can be indentified based on today‟s literature:

- Corporate social innovation (CSI), as discussed by Kanter (1999), refers to the fact that

companies can use social issues as an opportunity to learn and develop their business

supported by R&D. In this way, innovation can arise from social knowledge. A company

is able to create new products, new solutions and new market opportunities, while meeting

societal needs.

- The bottom of the pyramid (BOP) refers to disruptive innovations targeting the poorest

consumer group, who live on less than 2$ per day (Prahalad, 1994). In this way,

companies are able to generate growth and satisfy societal and stakeholders‟ needs by

creating profitable and future growth markets as well as focusing on the poor and their

urgent needs. This is done by directing technology and product-development resources on

the needs of the poor and building long-term relationships with local communities and

companies as well as NGOs.

- Ecological innovation focuses on environmental issues (Hockerts, 1999). Companies are

able to profit from ecological innovation by not only following current consumer demand,

but also by anticipating future environmental developments.

- Social entrepreneurship aims at indentifying socially responsible opportunities to create

public goods. Social entrepreneurs are often associated with voluntary and non-profit

sectors (Hockerts, 1999).

2.3.2 The Cosmetics Industry

The cosmetics industry is a saturated industry in which competition is quite high. A

significant part of the growth is achieved through innovation. Innovation is necessary to

maintain competitiveness, to improve product performance, to increasing safety issues and to

reduce the environmental impact of the products (OECD, 2007). Beertil Heerink of the

European cosmetics association Colipa confirms this notion by stating that “the cosmetics

industry thrives on the capacity to innovate” (Nichol, 2010). Examples of drivers of

innovation are the diverse population and the changing consumer needs. Examples of

innovation are new formulations of products and new testing methods.

As it has been mentioned before, consumers want to be informed about the ingredients used in

the cosmetics products. These ingredients need to be traceable. That is why it is necessary to

know who is doing what in the supply chain. To create consumers‟ awareness and consumers‟

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trust regarding natural or biological ingredients, cosmetics companies need to be able to make

clear where those ingredients come from, who is producing them and how they are processed

into the final products. The supply chains are quite short for small-medium sized companies.

This also counts for the companies that specialise in natural ingredients in which the

distributor can be the producer. The supply chain can be quite long and complicated for larger

enterprises. The ingredients might come from abroad or from a wholesaler, processed in

another company. In some cases, the final packaged product is bought from the distributing

brand (OECD, 2007).

Also, the supply chain can play an innovative part in socially responsible packaging. The

cosmetics industry is looking for new techniques to reduce packaging waste. Examples of the

new ways of packaging are making use of biodegradable plastics and recycled materials.

Other packaging techniques are upcycling (reusing an object in a new way) and

lightweighting (use of less material) (Organic Monitor, 2010).

2.4 Development of CSR

Development is an important term for Corporate Social Responsibility. Therefore, it is seen

that sustainable development is mostly linked with it. The world has limited resources and

increasing population. Due to the increasing competition companies cannot create value for

consumers and for the society without responsible behaviour. Moreover, changing the

ongoing attitude and developing CSR activities create differentiation and a win-win situation

for all stakeholders. Therefore, Meehans and Richards (2006) agree with this idea by saying:

“An organization that commits to widely recognized standards of social performance and

seeks to promulgate them across its entire value network will, if the effort is perceived to be

genuine (i.e. consistently maintained over the long term), benefit from enhanced competitive

resources deriving directly from its social orientation. In effect, CR orientation becomes a

meaningful basis for marketplace differentiation”.

2.4.1 Current Developments of CSR and Consumer Behaviour

International Institute for Sustainable Development has set 6 drivers for the development need

of CSR which are: The shrinking role of government, demands for greater disclosure,

increased customer interest, growing investor pressure, competitive labour markets and

supplier relations (BSDglobal, 2010). Moreover, the 3C-SR model‟s three components related

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to ethical and social commitments, connections with partners in the value network and

especially consistency of behaviour element are crucially important in terms of developments

in CSR. “Development of social resources requires organizations to take a holistic or strategic

view of their values and the management policies they underpin. This in turn implies

consistent adherence to externally recognized and accredited standards” (Meehan et al.,

2006). Therefore, it can be said that having loyal customers is no more related about

providing the expected products with the best quality and the best price. Credibility of the

product, the production process‟s effects on nature, the credibility of the suppliers, strategic

CSR views of the company and its reactions towards the developments carry an important

role.

Furthermore, being a proactive firm in terms of developments in CSR is very important.

Companies may choose to be adaptive, interactive or proactive. And managers of the socially

responsive companies are proactive (leaders) while dealing with social issues (Goodwin,

2007). For example, Shiseido as one of the biggest cosmetics companies claims that they

apply both reactive and proactive CSR activities but emphasizes that proactive CSR activities

are the ones, which makes Shiseido unique (Kataoka, 2009). Moreover, some of the proactive

CSR implications of Shiseido can be listed as: providing make up and massage seminars for

elderly and disabled people, having social contributions for funds by Shiseido employees,

donating environmental associations, supporting tree planting programs and so on.

Furthermore, it can be said that being a proactive company reflects the intention of the

company‟s interest towards developments in the CSR area, which makes it unique and

competitively successful as well. Meehans and Richards (2006) say: “Strategically astute

organizations are today aware of significant changes in consumer attitudes to organizations

themselves and the brands they seek to develop.” And they continue by saying: “Where

negative perceptions of organizations prevail, brand boycotts often follow as consumers,

particularly in wealthy industrialized countries, seek to punish parent organizations. But

herein lies an opportunity for a new approach to competitive strategy based around social

resources.” Therefore, CSR implications and developments should be taken as opportunities

for companies in order to increase their competitiveness as well as creating value for

customers, society and the environment.

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Moreover, the article gives examples of how consumer behaviour is affected by the social

performance of the companies. “Many consumers place primary emphasis on company social

performance in deciding whom to favour with their spending. Environics International‟s

Corporate Social Responsibility Monitor 2001 (a survey of 26,000 people across 20 countries)

found that CSR-related factors accounted for 49 per cent of a company‟s image while brands

and financial management accounted for only 35 and 10 per cent, respectively” (Meehans et

al., 2006). This example shows how brand awareness in terms of social responsibility changes

consumers‟ decisions as well as cost benefits and images of the companies.

2.5 CSR and Consumer Behaviour

Understanding consumer behaviour is vital in every industry. An important area of consumer

behaviour is how consumers choose and make decisions and steps that lead to the purchase of

a particular product or service. These steps consist of need recognition, information search,

evaluation of alternatives, and purchase.

2.5.1 Need Recognition

When it comes to social responsibility, a consumer need can be a product that satisfies

individual needs as well as improves social welfare. It has to be said that not every consumer

experiences this need. The recognition of this need depends on personal moral views, also

called as ethical obligation, and whether or not this obligation forms an essential part to one‟s

self-identity (Valor, 2008).

Another obstacle regarding need recognition is “bounded responsibility”, which refers to the

fact that not all consumers are equally aware of or involved with all social issues. For

example, one consumer might be more involved with the preservation of the environment

while the other cares more for human rights. It shows that consumers have different views of

corporate social responsibility.

Also, the perceived efficacy of consumer action is important. Consumers are willing to

purchase a socially responsible product if they believe that it will contribute to solving a

social issue. There is a greater chance of purchase if it makes a difference.

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2.5.2 Information Search

The sources of information influence a consumer perception of efficacy. For example, mass

media often focuses on the drama regarding a social issue (e.g. the harm inflicted) than on the

solutions (reasons why it happened and possible strategies to solve it). It reduces the

consumer‟s believe of change. On the other hand, information coming from formal sources

(e.g. university classes), informal sources (NGOs, seminars, campaigns, magazines etc) can

be more educational and empowering for consumers and might increase the perceived self-

efficacy (Valor, 2008).

In addition, consumers might buy responsibly if they are able to find out about a company‟s

impact on social welfare. However, studies have shown consumers face difficulties in finding

this information. Also, this is due to that fact that ethical/social attributes of a product are

often credence attributes, which cannot be judged before, during or after product use due to

lack know-how and expertise and the level of difficulty.

There are consumers that would like to buy responsibly but do not make the effort to inform

themselves for all product categories. For example, they may be willing to find information

about one product category, but care less about finding information regarding another socially

responsible product category. Even though they might be aware that the information is

available, they see it as a huge investment in time and effort to retrieve and process it. Those

consumers who feel the ethical obligation are more willing to search for information. On the

other hand, too much information can lead to overload and to difficulty in combining

information about companies. Moreover, consumers are more sensitive to negative

information than to positive information. Examples of negative information are a company‟s

lack of CSR involvement or a company‟s violations and opposition to a social issue.

How consumers process information can depend on their involvement with a product or a

brand. If a consumer has a strong commitment to a brand, he/she is able to show more

resistance to negative information and might have difficulty remembering ethical attributes of

a product.

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2.5.3 Evaluation of Alternatives

Consumers will only buy responsibly if these products can perform at least as good as the

irresponsible products. Another factor influencing the purchase decision is the price of a

socially responsible product. The additional costs resulting from responsible producing

processes are often passed on to the consumer by charging a premium price (Valor, 2008). As

mentioned before, reports have shown that consumers are willing to pay a higher price for a

socially responsible product. However, this counts as long as they have a budget for it. If their

income cannot support responsible purchasing, consumers will buy competing products with a

lower price.

Other factors that have an influence on a consumer‟s purchase behaviour are travelling a

distance to buy the product and spending too much time locating the product in the store.

After seeking information and considering the alternatives, consumers make the decision to

choose a socially responsible product. As mentioned before, it is hard to judge the ethical

attributes of a product. That is why it is important for companies to raise awareness and

provide information about their CSR developments and their impact of improving social

welfare.

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2.6 Theoretical Framework

Figure 4 shows a summary of the theoretical outline that is used throughout the thesis. The figure shows the literature used to answer the research

questions, which are vital for answering the central questions.

Figure 4: Theoretical Framework

CQ: “How do Corporate Social Responsibility

activities affect consumers’ buying behaviour in the

cosmetics industry”

RQ1) How do cosmetics brands define CSR?

- Can CSR be used as a way to

differentiate in the cosmetics industry?

- Does CSR-related innovation has an

influence on changing consumer

behaviour?

- How important is the consumer demand for

cosmetics brands in terms of CSR

activities?

RQ2) How do consumers interpret CSR in the cosmetics industry?

- Is CSR an important

purchase decision factor for cosmetics

consumers?

- How influential are the CSR

activities in order to create brand

awareness?

- How influential isthe peripheral

route of persuasion to raise CSR

awareness for the cosmetics brands?

3. Methodology

The theoretical framework of this thesis was presented in the previous chapter. The

methodology of this work will be explained in this section.

3.1 Research Purpose

As it has been mentioned before, the central question of this paper is: “How do corporate

social responsibility activities affect consumers‟ buying behaviour in the cosmetics industry?”

Therefore, the purpose of this research can be stated as the following: to have a better

understanding of CSR and its impact on consumer behaviour. Moreover, as the literature

review has shown, the cosmetics industry has been chosen as the area of research since CSR

activities are playing an important role for the firms as well as for the stakeholders in this

specific sector.

3.2 Research Approach

Qualitative research method is chosen in order to analyse the research aim of this study. The

reason why the qualitative approach is selected depends on its constructionist and

interpretivist character. Bryman states: “qualitative research can be construed as a research

strategy that usually emphasizes words rather than quantification in the collection and

analysis of data; has rejected the practices and norms of the natural scientific model and of

positivism in particular in preference for an emphasis on the ways in which individuals

interpret their social world; and embodies a view of social reality as a constantly shifting

emergent property of individuals‟ creation” (Bryman, 2004). Therefore, based on the purpose

of this research, consumers‟ interpretations, values, and attitudes towards responsible

consumption, environmental awareness and voluntary actions in terms of societal and

environmental issues of cosmetics companies are topics, which needed to be explored by

conducting qualitative research. Davies (2007) says: “Much qualitative research aims to do

just that: to reflect upon the feelings and experiences relative to the research question, to

explore the nature of the relationship between person and situation, and to take account of the

effect of the research analyst‟s own background and role.”

In addition, qualitative research provides the opportunity and flexibility- to the researcher- of

learning consumers‟ expectations, experiences and current elaborations within their own

words rather than just focusing on numbers gathered by quantitative surveys. Davies (2007)

supports this idea by saying: “Qualitative research feels more human than methods that can

sometimes be portrayed as reducing everything to thick boxes and tables.” In qualitative

research, the researcher wants rich and more detailed answers while quantitative research is

supposed to generate answers that can be coded and processed quickly. (Bryman, 2004)

3.2.1 In-depth Interviews

Furthermore, the chosen qualitative method is conducting in-depth interviews. In-depth

interviews can be conducted in an unstructured or semi-structured way. It is preferred to use a

semi-structured interview for this research based on the following reasons. Firstly, semi-

structured interviewing gives the opportunity to ask specific topics to be covered in the

interview guide while providing flexibility at the same time. Since this research has specific

questions to explore, semi-structured interviewing enables to cover more specific issues.

Moreover, semi-structured interviewing provides flexibility for the interviewer to come up

with new and/or follow up questions or to reformulate the questions based on the replies and

reactions of the interviewee. Secondly, since two people conducted this research, the semi-

structured aspect of the interview ensures a way of comparing interviewing styles. Thirdly,

qualitative interviewing gives the opportunity to interview the participants more than once

when it is necessary and to have a pre-test of the questions in order to be sure if the questions

are understood in the right way. (Bryman, 2004)

On the contrary, the biggest disadvantage of having in-depth interviews is that it is time

consuming. Moreover, the type of the questions may create disadvantage if they are not

prepared in the appropriate way. For example if the questions are too long and complex to

remember, the participant may not give their ideal answers. And lastly, face-to-face

interviews are vulnerable to bias since participants may be influenced by the interviewer and

vice versa. During this thesis study, the advantages of in-depth interviews are valued more

compared to the disadvantages.

3.3 Research Design

The semi-structured interviewing method has been planned for the consumers as well as for

the company interview in the following way. First of all, in terms of consumer interviews the

participants are identified as female cosmetics consumers who, in the age range of 18 to 40

years old, are living in Brussels. Having a broad age range is because of the fact that the

cosmetics industry targets all female consumers. In the cosmetics industry it is often observed

that consumers are divided into consumer segments based on their economic, geographic, or

cultural differences but not based on the age differences. On the other hand, it has to be kept

in mind that, there are some exceptional categories such as anti-aging creams and anti-aging

make-up products. However, most cosmetics product categories do not aim to segment female

consumers based on their ages.

Moreover, Brussels has been chosen as the area in which the interviews are conducted. The

reason for this is that the researchers of this study are located in Brussels. Therefore, personal

interviews were only possible to conduct in Brussels. Time restriction was also the reason that

the interviews were restricted within this specific region. On the other hand, it is assumed that

the information gathered from the interviews, meaning consumers‟ perceptions related to

CSR, can be seen as homogenous for the rest of Belgium and Europe.

In terms of the interview guide, it is prepared to follow a certain protocol of questions starting

with couple of introductory icebreaker questions to make the interviewee more comfortable

and continuing with several transition questions, which explain the purpose of the interview

and asking for permission to use a tape recorder. After being confirmed by the interviewee,

starting with some demographic questions and keeping up with thirteen main questions that

address the core subjects of the research. Moreover, the interviewees‟ answers are

summarized during the interview in order to be sure that the answers are understood in the

right way (Gubrium et al.). One other issue that has to be mentioned is about the number of

the interviews conducted. Normally, literature shows that there is no fixed number of

interviews while doing qualitative research. Moreover it is suggested that, the interviewers

should continue interviewing until they have learned all there is to be learned from the

interviews (Gubrium et al.). Therefore, 25 interviews have been conducted since this amount

led the interviewers to collect sufficient information in order to answer the research questions.

In addition, test interviews were held in order to avoid confusion and misunderstandings and

to reduce the level of bias. By doing so, the findings of the in-depth interview are expected to

be more reliable.

During the test interviews it was noticed that consumers had difficulty in understanding the

term CSR, since the majority of the interviewees were not familiar with the term. Even after

the explanation was given, and examples of the CSR activities were mentioned; the

interviewees still had hard time processing the information and giving examples of CSR

activities in the cosmetics industry. Based on this, it was decided to aid the interviewees by

showing examples of CSR advertisements of cosmetics brands. In this way, consumers were

able to recognize and fully understand the meaning of CSR activities. On the other side, it has

to be mentioned that while showing the CSR advertisements, the name and logo of the

cosmetics brands were hidden in order to prevent interviewee bias of focusing too much on

these cosmetics brands shown in the CSR advertisement. In addition, in this way the answers

of the interviewees can be considered more reliable. The advertisements shown during the

consumer interviews can be found in the Appendix 1.

After a quick glance on the advertisements (around 5 – 10 seconds), the interviewees were

able to give more examples of CSR activities and were able to recall socially responsible

cosmetics brands. Furthermore, they were able to give detailed answers to the other questions,

such as how they find out about socially responsible cosmetics brands, whether they find CSR

important and believe that it makes a difference, what type of CSR activities will lead them to

change their loyal cosmetics brands, whether they would recommend a socially responsible

cosmetics brand and if they would discourage socially irresponsible cosmetics brands to

someone else.

Moreover, the test interviews showed that the interview questions were difficult to understand

and to answer in the first instance. Some of the questions were too long or formulated in a

difficult way to understand. After the test interviews, the interviewee questions were

reformulated in order to make them easier for the interviewees to answer and to make sure

that interviewees feel comfortable in answering those questions. The consumer interview

guide can be found in the Appendix 2.

3.3.1 Company Interview

The second target group to interview were the cosmetics brands. The same kind of guide is

used, which was mentioned above for consumers, in terms of the interviewing style.

Due to lack of time and cooperation, only one company interview was conducted. The

interview was held with Estee Lauder Companies. Even though there is only one company

interview, it did have a significant importance on the thesis report. First of all, Estee Lauder

Companies is a multinational enterprise that plays an important role in the cosmetics industry,

with 27 cosmetics brands. Secondly, during the consumer interviews, the company‟s prestige

beauty brands such as Estee Lauder, MAC, Bobbi Brown, Clinique and Aveda were

mentioned as favourite cosmetics brands or as socially responsible brands by a large group of

interviewees. As a result, by interviewing Estee Lauder Companies, information was gathered

about the perception on CSR on corporate level and about the brands‟ CSR initiatives. This

means that, although Estee Lauder Companies is the only company, which the interview has

been conducted, it provided remarkable amount of information through its wide range of

brands.

The contact person of Estee Lauder Companies in relation to the CSR topic is Isabel Martin.

Martin is the Vice President Governmental Affairs-EU of the Benelux. The total number of

questions for the company interview was 14. However, the first 3 questions were basic

questions related to the background information of the interviewee. The other eleven

questions focused on the perceptions of Estee Lauder Companies on CSR. The CSR-related

topics discussed during the interview were company‟s culture, consumer involvement,

competitive advantage, innovation and future CSR developments in the cosmetics industry.

These topics were discussed in order to answer the research question and in the end the

central question.

Unfortunately, test interviews were not possible for the company interview. However, to

make sure that all information gathered and that the answers of the interviewee were valid and

reliable, the website of Estee Lauder Companies, the brands‟ websites and the Annual Report

of 2009 provided additional information to analyse and evaluate the company‟s CSR

commitment. In addition, the answers of Isabel Martin were summarized during the interview

to check whether the interviewers understood her answers and in order to avoid any

confusion. The company interview guide can be found in the Appendix 2.

3.4 Analytical Approach

The results of the interviews were analysed by using several models and theories. An

important theme in the consumer analysis is awareness consisting of recognition (aided

awareness) and recall (top-of-mind awareness). Analysing CSR awareness is necessary in

order to understand how CSR activities affect consumer purchase behaviour. Another

important theme in the consumer analysis is persuasion. Persuasion can be described as

change brought either by reason or by indirect factors that do not involve any reasoning

(Tellis, 2004). Examples of these factors are the use of cues such as endorsers and emotional

cues (fear, humour, joy, shock etc.). Persuasion is an important subject for this thesis in order

to answer the central question: “How do corporate social responsibility activities effect

consumers‟ buying behaviour in the cosmetics industry?” Moreover, during the consumer

interviews, questions were asked in relation to how consumers find out that a brand is socially

responsible and how they feel about being informed. These questions in general are related

with the routes of persuasion. Companies can use CSR as a way of differentiation to gain

competitive advantage. However, in order to do that, they need to communicate to consumers

about their CSR activities and persuade them about the legitimacy and the credibility of their

advertisement.

In terms of persuasion, the most important model used is the Elaboration Likelihood Model

(ELM). ELM is a framework that summarizes the different routes of persuasion and explains

the reasons for each routes of persuasion. The explanations are based on how much a

consumer thinks about the message of the advertisement. The routes of persuasion that are

discussed in this paper are the central route and the peripheral route. For example, when a

consumer has the motivation and the ability to evaluate a message, the likelihood that she will

think about it will be high. The consumer will look for and respond to strong arguments in

favour of the message and counter what she considers are weak reasons. This route of

persuasion is called the central route. On the other hand, if a consumer has the motivation but

lacks the ability to evaluate a message, she will more likely respond to cues associated with

the message, which is called the peripheral route of persuasion (Tellis, 2004). The routes of

persuasion can be found in figure 5.

Figure 5: Elaboration Likelihood Model of Persuasion (Petty et al., 1986)

The routes of persuasion are closely linked with the communication channels used by

cosmetics companies. These channels are discussed in the consumer analysis section as well.

There is a special focus on the point-to-point communication since this is an important

communication channel for the cosmetics industry. In addition, Vaughn presents a model

called Foot-Cone-Belding (FCB) grid, which shows how purchase decisions are made for

specific products.

Figure 6: FCB Grid

In Figure 6, four different situations are illustrated based on the high-low involvement and the

think-feel dimensions. Based on this figure, it is clear to observe that consumers reflect

different decision mindsets in terms of the sequence of “learning, feeling and doing” for

specific product categories.

Cosmetics products‟ consumption can be classified in the second quadrant. “The second

quadrant concerns product decisions of high involvement, but for which less information is

needed. In this case, the consumer first wants to be emotionally attracted by the brand image,

and then he or she collects information, and finally undertakes some action. Jewellery,

perfume, fashion and holidays may be examples that fit in this category” (De Pelsmacker et

al., 2007).

In addition, in relation to the peripheral route, the importance of repetition and the advantages

of using endorsements in the cosmetics industry and for CSR advertising are analysed as well.

The structure of the consumer analysis is done based on the results of the interview questions.

The order of the interview questions remains the same as the interview guide and subjects

such as persuasion, repetition, communication channels and loyalty are analysed while

evaluating the answers of the interviewees. At the end of the consumer analysis, an answer is

given to the research question “How do consumers interpret CSR?”

The company analysis section consists of short background information of Estee Lauder

Companies and its CSR activities. Moreover, the answers of the company interview with

Isabel Martin are analysed. In addition, the 3C-SR model is used to analyse whether Estee

Lauder Companies is a good corporate citizen. The aim of the 3C-SR model is to point out

that it is necessary for a socially responsible company to be committed, to share these

commitments with its value network and that it is consistent with its performance. These three

components of the 3C-SR Model are inter-related and it is impossible to separate the elements

and claim to be a good corporate citizen (Meehan et al, 2006). In the end, an answer is given

to the research question “How do cosmetics brands define CSR?”

4. Company Analysis

This chapter focuses on analysing the results of the interview, which was conducted with

Estee Lauder Companies.

4.1 Company Background and History

Estee Lauder Companies is one of the leading manufacturers and marketers of quality skin

care, makeup, fragrance and hair care products. Mrs. Estée Lauder founded the company in

1946. Estee Lauder Companies has been a family-owned company until 1995 when it became

a public held company. Until this day, the Lauder family is still very much involved in the

company‟s operations. The flagship cosmetic brand of the company (Estee Lauder) is named

after Mrs. Estée Lauder. Currently, the company has 27 cosmetics brands.

The cosmetics products of Estee Lauder Companies are sold over 140 countries and

territories. The net sales of 2009 were $7.3 billion. The vision of Estee Lauder Companies is

“Bringing the best to everyone we touch”. The company defines “the best” as the best

products, the best people and the best ideas and has built its success on these pillars since its

establishment.

The brands of Estee Lauder Companies are:

Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series Skincare for Men, Origins, Tommy

Hilfiger, M·A·C, Kiton, La Mer, Bobbi Brown, Donna Karan, Aveda, Jo Malone, Bumble and

Bumble, Michael Kors, Darphin, American Beauty, Flirt!, GoodSkin™ Labs, Grassroots™

Research Labs, Sean John, Missoni, Daisy Fuentes, Tom Ford, Coach, Ojon and Smashbox.

It has to be said that this report focuses primarily on the high-end prestige beauty and makeup

artist brands of Estée Lauder, MAC, La Mer, Bobbi Brown and the prestige skincare brands

of Clinique and Aveda.

4.1.1 Isabel Martin’s Background

The company interview was conducted with Isabel Martin on 05/07/2010. Question 1 was

asked to learn her position at the company.

Martin‟s position is Vice President Government Affairs-EU at the Benelux Office of Estee

Lauder Companies. Her main task consists of following regular legislations with the focus on

product regulations. Product regulations refer to composition of the ingredients, packaging of

the products and safety conditions. Moreover, her tasks are closely linked with the distribution

issues for the company, online sales regulations, R&D and product development, consumer

communication and PR.

Within question 2, it is aimed to learn Martin‟s background with Estee Lauder Companies.

Martin has a lawyer background. Moreover, she has been working in the cosmetics industry

for 12 years and working for Estee Lauder Companies for 7 years. Martin mentioned that

before, she used to be the legal director for the Trade Association. After working at this

position, she started to work for Estee Lauder Companies as being the first person to hold the

title Vice President Government Affairs-EU.

Question 3 was asked to learn how long Martin has been involved with the CSR activities at

Estee Lauder Companies.

She mentioned that her position is not directly a CSR Management position. Moreover there

is not a CSR department in the Benelux Office. Martin mentioned that there is a global CSR

policy in terms of energy, waste minimization and packaging of Estee Lauder Companies. On

the other side, the individual brands of Estee Lauder Companies have their own CSR

activities. Since Martin‟s tasks are focused on regulations and legislations of the cosmetics

products she is highly involved and linked with CSR policies and activities for 7 years.

4.2 CSR as a Company Culture

Question 4 is asked to learn whether CSR is an important part of the company culture within

Estee Lauder Companies.

Estee Lauder Companies is an enterprise that has been involved with CSR activities since its

establishment. CSR is a part of the identity of the company and has strong links with the

vision and the mission of Estee Lauder Companies. Since it is a family owned company, it has

been involved with external and internal CSR activities (employee satisfaction, product

quality, product safety, environmental friendliness, etc.) for many years. As a family owned

company, the company culture of Estee Lauder Companies was not to expose its name in

order to protect its reputation for many years. For the last 20 years, there has been a huge

pressure from the NGOs in terms of implementing CSR activities. Therefore, consumers also

became aware and developed demand towards the subject. As a result, CSR became as a

competitive advantage for the cosmetics companies. So, although the strategy of Estee Lauder

Companies was not to expose its name in terms of the CSR activities, it became necessary for

the company in the end.

In addition, although there is a global policy at corporate level in terms of energy, waste

minimization and packaging at Estee Lauder Companies, having the regional structure makes

it easier to implement the CSR policies and set it as a company standard. Moreover, the

Annual Report aims to centralize information in terms of CSR and to put the information in a

systematic manner in order to have a global picture of the CSR activities.

4.3 Internal CSR activities

As mentioned before, one of the pillars of Estee Lauder Companies is employing the best

people. The company is highly involved in empowering its employees and making them feel

part of the family oriented company. “We embrace diversity and global exclusiveness and

take pride in providing a work environment in which individuals of different races, genders

and gender identities, sexual orientation, ethnicities, religions and backgrounds can excel”

(Estee Lauder Companies Annual Report, 2009). Estee Lauder Companies has several

programs to empower its employees and to make them feel committed to the company. These

programs are:

- Most Valuable People (MVP) Volunteer Program supports several institutions that

focus on health, education, literacy and institutions that give support to women. The

goal of the MVP Volunteer Program is to give the employees of Estee Lauder

Companies the opportunity to help local communities and other people in need. For

instance, employees of Estee Lauder Companies supported the literacy organization

“Reach Out and Read” by helping children to get prepared for school.

- Think Smart is a program that encourages employees to submit ideas on how Estee

Lauder Companies can operate more efficiently and more cost effectively. Since its re-

launch in 2005, the program has received thousands of ideas from employees.

- Health & Wellness Programs focus on the well being of the employees by giving

health check-up, skin cancer screenings, mammograms, fitness programs and other

onsite activities.

At the moment, Estee Lauder does not have standardized policies regarding safety issues.

However, the company‟s aim for the next 3 years is to standardize the behaviour-based safety

program and the workplace policies and procedures. In addition, the company aims to

increase safety trainings and to maximize communications through all its facilities.

Moreover, the employees are very much involved with the CSR activities organized by the

individual brands. The commitment to the external CSR activities originated from examples

set by the employees, for example the Lauder family. Estee Lauder Companies believes that

the employees are the core of doing “good” and represent the company‟s dedication of being

socially responsible.

4.4 External CSR activities

Estee Lauder Companies is as much committed to its external CSR activities as it is to the

internal activities. The external CSR activities of Estee Lauder Companies are implemented at

corporate level while the brands have their own CSR initiatives as well.

4.4.1 Animal testing and product safety

One of the most discussed topics in the cosmetics industry is the testing on animals. Estee

Lauder Companies decided to act against animal testing 20 years ago. Instead, the company

evaluates its products with the help of volunteers and aims for the complete elimination of

animal testing in the cosmetics industry. Moreover, in order to secure the safety of the

cosmetics products, the ingredients and the product formulas are continuously evaluated.

Furthermore, the chemicals used in the product formulas comply with the chemical

management plans of the European chemical program REACH (Regulation, Evaluation,

Authorization and Restriction of Chemicals).

4.4.2 Environmental Activities

Being environmental friendly is a topic that Estee Lauder Companies as well as the

consumers care greatly about. One of the ways that the company strives for an environmental

production is through the packaging process. Estee Lauder Companies is one of the founding

members of the Sustainable Packaging Coalition (SPC). The SPC is an industry-working

group that aims for a packaging system that provides economic prosperity and the use of

sustainable materials. This means that packaging material is sourced responsibly, and the

packaging is designed to be safe. Moreover, renewable energy is used during the production

processes and packaging is recycled efficiently. One of the green brands of Estee Lauder

Companies is Aveda, which is one of the first prestige cosmetics brands that developed

sustainable packaging. For example, the brand uses 96% of Post-Consumer Recycled plastic

in the packaging of new products. The Key Packaging Achievements of Estee Lauder

Companies can be found in the Appendix 3.

Furthermore, the R&D Department of the company created a program called Green

Chemistry. This program consists of 40 scientist and engineers who focus on developing

sustainable product design. In addition, the company founded an Environmental Affairs and

Safety (EAS) Committee. This Committee is concerned with making sure that the company‟s

processes and policies comply with all applicable laws and with the accredited ISO 14001

Environmental Management System. Also, the Committee cooperates with environmental

organizations and governmental institutions in order to improve the company‟s environmental

programs. Moreover, the Committee developed an environmental program that aims to reduce

energy usage, for example through installations of on-site renewable energy.

Another environmental activity is the improvement of the company‟s global water usage.

Estee Lauder Companies tracks the water usage at all locations and implements conservation

measures to reduce the water used for processes such as cleaning, sanitation and irrigation.

The company is currently developing a program to further minimize the water usage (Estee

Lauder Companies Annual Report, 2009).

4.4.3 Breast Cancer Awareness Campaign

One of largest social activities of Estee Lauder Companies is the Breast Cancer Research

Foundation (BCRF), which was founded in 1993 by Evelyn H. Lauder (Senior Corporate Vice

President of Estee Lauder Companies). The independent foundation aims to fund for

innovative clinical and translational research. The foundation supports universities and

medical centres to conduct advanced breast cancer research in order to find a cure and

prevention of breast cancer. Funding collected through the foundation goes to breast cancer

research and worldwide awareness programs. One of those programs is the Breast Cancer

Awareness (BCA) Campaign created by Estee Lauder Companies. This campaign aims to

raise awareness for the importance of breast health and early detection though several

communication channels. First of all, Pink Ribbons and informational brochures on breast

health are distributed. The Pink Ribbon has become a worldwide symbol for breast health of

which 85 million have been distributed so far. The informational brochures provide

information about breast health and give instructions on how to screen the breast cancer

individually. The information brochure can be found in the Appendix 4. Second of all, the

Global Landmark Initiative is an initiative where landmarks, famous buildings and

monuments (e.g. JFK Airport, Tower of Pisa, Niagara Falls etc.) are lit up in pink, which is

the colour associated with breast health. The pink lights can be seen as “a symbol of hope,

empowering and enlightening millions of women everywhere” (Estee Lauder Companies

Annual Report, 2009). In 2009, over 200 landmarks where lit up in pink. Lastly, the company

appoints World Pink Ribbon Ambassadors to support the BCA Campaign. One of the current

Ambassadors is actress and model Elizabeth Hurley. In addition, advertisements are placed in

magazines to promote the foundation and the BCA Campaign and more information can be

found on the company‟s website.

The campaign is implemented in more than 70 countries and is supported by 14 brands of

Estee Lauder Companies. These brands create and sell unique Pink Ribbon Products in order

to represent their own brand contributions to the Breast Cancer Research Foundation. The

Pink Ribbon products are sold every October, which is the month of breast cancer awareness.

The primary brand that supports the Breast Awareness Campaign is the Estee Lauder brand.

4.4.4 MAC AIDS Fund

Another large social activity of Estee Lauder Companies is an initiative of the brand MAC,

the MAC AIDS Fund (MAF). This foundation was established in 1995 and supports men,

women and children who are affected by HIV/AIDS. MAC raises awareness for its

foundation with Viva Glam Campaign. The brand introduced the Viva Glam Lipstick

consisting of 8 different shades, in which all the money raised through the sales will go to the

MAC AIDS Fund. In addition to this, the brand organizes a volunteer day for World AIDS

Day on the 1st of December. During this day, the MAC employees volunteer at local

organizations. Furthermore, MAC appoints ambassadors for the Viva Glam Campaign to raise

further awareness for the MAC AIDS Fund. The current ambassadors of the Viva Glam

Campaign are the artists Cyndi Lauper and Lady Gaga. In addition, both artists developed a

limited-edition lipstick for the Viva Glam Campaign in which sales are donated to the MAC

AIDS Fund.

4.4.5 Social Activities of Aveda, Clinique and La Mer

In addition to developing sustainable packaging, Aveda also has created the Aveda Program

for the collection of plastic bottle caps at different locations. These plastic bottle caps are then

recycled into new caps and containers. The program aims for recycling of plastic caps and

preventing these caps to be dumped in landfills, beaches, rivers and oceans. Aveda is the first

cosmetics brand in the world to have received a “Cradle to Cradle” (C2C) sustainability

certification.

Clinique is known for being 100% fragrance free and allergy tested. Especially testing on

allergies is very much appreciated by consumers. The consumer interviews showed that when

it comes to purchase decision factors, “ingredients” is rated very highly. In addition, with

ingredients it is also meant no unhealthy chemicals and no allergic reactions. Clinique tests

every product 12 times on 600 people. This means a total of allergy 7200 tests per product. If

one of these tests results into an allergic reaction, the product formula will be reformulated in

order to reduce allergic reactions to a minimum. In this way, Clinique is able to produce

quality and healthy cosmetics products while keeping consumers‟ wishes in mind.

The cosmetics brand La Mer is committed to ocean conservation by promoting the

regeneration of the sea kelp forest. The brand promotes this issue in collaboration with

Oceana, which is an international ocean advocacy organization. La Mer and Oceana raised

awareness together for Wold Oceana Day, which was officially recognized by the United

Nations on June 8th

2009. In addition to the World Oceana Day, La Mer participated on

Oceana‟s Habitat Protection Campaign and developed a special limited-edition crème in

which all the money raised is donated to the Oceana.

4.5 Consumer Involvement

Question 5 was asked to learn about the results of implementing CSR strategies on consumer

behaviour.

Martin mentioned that each Estee Lauder brands have unique identities and different CSR

activities, which are specific and in alignment with the image of the brands. For example

since Origins, Clinique and Aveda position themselves as environmental and natural brands,

consumers of these brands are also sensitive and involved with the CSR topic. Moreover, the

feedback gathered from consumers also shows variety in terms of CSR activities based on the

regional differences. UK and Scandinavian countries are stated as the regions where consumer

awareness in terms of CSR and environmental involvement are the highest. Martin mentioned

that: “The consumer in Europe has more ethical values. During the recruitment process, I

observed that many applicants were interested in the CSR activities of the company and I was

quite impressed by their knowledge in terms of the CSR activities of Estee Lauder

Companies.” This shows that Estee Lauder is communicating with their consumers in terms

of their CSR activities in the right way. In addition to this, the CSR impact on consumer

behaviour depends on the identity of the brands. Martin exemplified by saying: “MAC has a

young and trendy identity while positioning itself. There is a direct relation with the brand

identity and the CSR activities –such as the HIV foundation- applied by the brand.”

Therefore, it is important that the CSR activities and the brand image have links within the

consumer segment it has targeted. To sum up, the implemented CSR activities have successful

effect if only the brands communicate with their consumers based on the CSR campaigns,

which are in alignment within the brand image.

Question 6 was asked to find out the kind of feedback Estee Lauder Companies receives from

consumers about their CSR activities.

Since Martin is not working for a CSR department, she wasn‟t able to share statistics about

consumer feedback. But she shared her personal observations on consumer behaviour in the

cosmetics industry. Martin said, she observed that there is a growing number of perfumeries

dedicated to natural cosmetics products in Paris where can be an important spot for cosmetics

industry. Moreover, magazines and Internet are highly influencing cosmetics consumers in

terms of the green market. In addition she said that: “The more the markets for organic

products are increasing, the more consumers become aware and support organic production.

Furthermore, it is not about safety, it is about being socially and environmentally aware.”

Therefore, if consumers become more aware about these issues for a specific industry they

spread their knowledge and awareness for the other industries and product categories.

Additionally, Martin explained that it is harder to measure consumers‟ reaction and

involvement in terms of social awareness. But, still the new generation is considered more

reactive and sensitive towards social and environmental issues. She said: “New generation of

consumers are different. The age that they have grown up in, is continuously highlighting the

problems related to the environment and the society. Therefore, they are more aware as well

as interested in giving reactions towards these subjects.”

Question 7 was asked to understand how important consumer demand is while creating and

implementing CSR activities for Estee Lauder Companies.

Martin said that consumer demand is very much important towards CSR activities within

Estee Lauder Companies. Therefore, as it has been mentioned before, family owned structure

of the company has lead Estee Lauder Companies to keep its name behind in terms of CSR

activities. But lately, since CSR activities became a competitive advantage for cosmetics

companies, Estee Lauder also chanced its strategy regarding this issue. The company also

communicates with their consumers and make them aware of what the company is doing in

terms of CSR. In relation to this Martin said: “CSR is a competitive advantage for cosmetics

companies in general. As a cosmetics company, if you don‟t communicate with the consumers

they don‟t have the chance to know about the company‟s contribution about social an

environmental responsibility.”

Furthermore, Martin mentioned about the growing pressure of NGOs in the cosmetics

industry. NGOs set high standards and push for more regulations in terms of safety issues for

the cosmetics products. As a result, CSR topic creates attention and awareness in the media as

well as in the public. In relation to this, consumer awareness and demand is increasing for the

cosmetics products.

4.6 Competitors’ CSR Activities

Question 8 was asked to find out Martin‟s opinions about other cosmetics brands, which apply

successful CSR strategies. Moreover, question 9 was asked to learn if CSR is a way to

differentiate from competitors.

Martin stated that L‟Oreal, Unilever and PG are the companies, which apply successful CSR

strategies. The reason behind their success is that these companies are aware of the

importance of communicating with their consumers regarding their CSR activities. Moreover,

she took attention towards the financial advantages of CSR applications in the long run. These

companies are aware of the difference, which CSR activities can bring for them in the stock

exchange. Martin said: “A global company has no other choice than communicating with their

consumers regarding their CSR activities in order to gain competitive advantage.”

On the other side, she mentioned that it is very important to apply the same safety and

environmental regulations at the all regions where the company operates. Therefore, she said

that in the cosmetics industry the safety regulations are significantly varied from region to

region. Estee Lauder Companies applies the strictest regulations for all regions in order to

treat every customer in the same way. As a result, she considers Estee Lauder Companies as a

responsible company while comparing it to the competitors in an objective attitude.

4.7 CSR and Innovation

Question 10 is asked to learn if CSR is an innovative idea/strategy to change consumer

behaviour for Estee Lauder Companies.

Martin mentioned that CSR can be considered as a stimulus to innovate. Therefore she said:

“We push our suppliers to innovate, to provide more environmental friendly packaging

materials.” For example Aveda, which is a unique cosmetics brand in terms of its

organic/natural image, has been bought by Estee Lauder Companies. Aveda products consist

of natural ingredients as well as innovative recycled packaging. After the purchase of Aveda,

Estee Lauder Companies changed and adopted all packaging processes into recycled

packaging materials. However, based on the characteristics of the cosmetics production, it is

impossible to produce fully natural products for all the cosmetics industry. Martin explains

this issue by saying: “Not all cosmetics products can be pure organic because of the

unavailability of the ingredients. The production of the organic ingredients is very limited.

This is because the plants have to grow for a time period and this will limit the availability to

produce pure organic products.” Therefore, even though consumer demand for organic

products is growing, it is impossible to expect all cosmetics products to be 100% organic. As

a result, the innovative contributions for the cosmetics products are being accomplished more

based on the packaging. In relation to this, consumers who are sensitive about environmental

issues will appreciate the innovations in recycled packaging and waste minimisation as well.

Question 11 was asked to learn more about the innovative CSR activities in the cosmetics

sector and also specifically the contribution of Estee Lauder Companies towards the issue.

The most well known topics within innovation in the cosmetics industry can be listed as

innovation through the environmental packaging, supporting employees and social causes. In

addition, Estee Lauder Companies is performing innovative CSR activities through its

packaging processes, societal contributions and empowerment of internal commitment. For

example, Aveda has been running a recycled packaging policy and La Mer has been

promoting the regeneration of the sea kelp forest. Moreover Estee Lauder Companies helps

kids and adults how to read in USA. Since the headquarters of the company is located in New

York, Estee Lauder Companies donates money to protect and to clean the Central Park

voluntarily. In addition, the company gives humanitarian support such as rebuilding schools

in Haiti. One of the reasons for this aid is to support the employees of the company since

Estee Lauder Companied has many Asian employees. By doing so, the company aims to

create synergy and emotional links with the employees who in turn feel more committed to

the company. These activities are contributions for the societal causes, which have no relation

to the cosmetics industry. As a result, Estee Lauder Companies applies innovative

environmental activities in relation to its production processes as well as societal activities,

which are not related to the cosmetics industry. Therefore, the consumers appreciate these

contributions as a responsible cosmetics company.

4.8 Future CSR Opportunities

Question 12 is asked in order to learn if CSR will play a bigger role for cosmetics companies

in the future.

Martin mentioned she truly believes that CSR is and will become more important in the

cosmetics industry. She added by saying: “There is a tendency in underestimating the

importance of cosmetics products. Moreover, this is a blind judgement in the sense of

underestimating because consumers can never stop using them as well. For example,

consumers may never stop using soap even though they may underestimate the value of the

product.” In addition to this, Martin said that NGOs‟ role over the cosmetics industry is

remarkable in terms of changing the attitude of the consumers towards the industry. NGOs

are striving for more regulations that take great attention in the media, which in turn will

increase awareness and sensitivity of consumers. As consumer awareness and sensitivity

increase, CSR‟s role will increase more in the future based on the demand from the

stakeholders including customers. “Although cosmetics industry‟s role shouldn‟t be

underestimated, the word “cosmetics” reflects a superficial meaning for many people” Martin

explained. And she continued explaining, since the majority of the people who are involved in

making regulations are male, this also triggers the underestimation of the cosmetics industry.

Therefore NGOs play a crucial role in order to change this attitude. Martin also mentioned

that the Trade Association‟s involvement within cosmetics industry is quite important in the

sense of introducing industry guidelines. To sum up consumers‟, media and legal authorities‟

awareness will lead to more CSR activities in the cosmetics industry in the future.

Furthermore, within question 13 it is aimed to figure out what can be done in terms of CSR

activities in the future for the cosmetics industry.

Martin mentioned that currently, CSR implications are used as a way of creating

differentiation and gaining competitive advantage. This means that the cosmetics companies

have their own CSR policies and activities rather than being a part of the industry approach

towards social responsibility. It is very important for a cosmetics company to have initiatives

in terms of CSR at the corporate level. Having CSR initiatives at the corporate level stand for

having CSR visions, which are applied, in all the regions that the company operates in the

same way. Moreover, these initiatives of each cosmetics company should be a part of the

industry approach. By having an industry approach, the impact on the environment and the

society will be greater and more effective.

4.9 Estee Lauder Companies & 3C-SR Model

CSR has become a way to differentiate and to gain competitive advantage. As mentioned in

the Literature Review, the 3C-SR Model is a way to evaluate whether a company is a good

corporate citizen by analysing its CSR strategy and activities. The model emphasizes that

CSR can be a means for a company to be socially responsible and to achieve long-term

success and competitive advantage. The model consists of 3 components, which are ethical

and social commitments, connections with partners in the value network and consistency of

behaviour over time to build trust (Meehan et al, 2006). These three components are inter-

related with each other and are equally important in order to be a good corporate citizen.

Estee Lauder Companies has a broad range of CSR activities at corporate level as well as at

the brand level. The CSR policy of the company can be evaluated with 3C-SR Model in order

to analyse whether the company is a good corporate citizen. In relation to this, the company‟s

commitment, connections and consistency of CSR are analyzed.

4.9.1 CSR Commitment of Estee Lauder Companies

With ethical and social commitment is meant the ethical standards and social objectives of

Estee Lauder Companies. These standards and objectives can be translated into the mission,

strategic objectives, strategy programmes and policies and the company‟s culture. The

standards point out how committed a company is to being socially responsible in the long run

instead of focusing on short-term profits and benefits of CSR.

The social responsibility commitment of Estee Lauder Companies consists of two parts. The

first part is to maintain the company‟s own production processes in order to reduce negative

impacts on the environment. The second part is to continue to be an active member of

sustainability by supporting people, projects and causes outside the company. The second part

in particular, shows the voluntary aspect of the company‟s commitment towards social

responsibility.

As mentioned in the company‟s background, the mission of Estee Lauder Companies is stated

as the following: “Bringing the best to everyone we touch”. The word best is described as the

best people, the best products and the best ideas. These 3 pillars form the core of the

company‟s culture and the company‟s strategy. The CSR activities are necessary for Estee

Lauder Companies to have the best people, the best products and the best ideas. In terms of

the internal CSR activities such as the Think Smart Program and Health & Wellness Program

the company shows its commitment to its employees and is able to empower them to stay

committed to the company. Moreover, through these programs Estee Lauder Companies is

able to attract and keep the best employees. In terms of the external CSR activities such as the

product safety & no animal testing and environmental activities, the company is able to bring

the best products (quality as well as socially responsible) to the consumers. Also, the

company touches people by helping local communities as well as through their foundations

(Breast Cancer Research Foundation and MAC AIDS Fund).

In addition to the mission of the company, Estee Lauder Companies builds its vision and

reinforces its position as the leader of prestige cosmetics on three factors: “Imagine, Integrate

and Innovate”. Everything the company can imagine will be achieved. Estee Lauder

Companies further integrates and spreads its knowledge, experience and resources throughout

its brands, regions and functions to become more powerful. Finally, by innovating, the

company is able to maintain being the forefront of the latest cosmetics innovative

ideas/products/services. These three factors are also incorporated into the company‟s CSR

activities. First of all, with the Think Smart Program the employees are able to share their

ideas on how the company can operate more cost effective. Also, the brands have their own

CSR initiatives, which reflect the brands‟ identity. These are examples of the factor

“Imagine”, which show that the company is very much open to new ideas and initiatives and

these ideas can be realized as well. Secondly, a good example of integration is sustainable

packaging. Aveda is the first brand of Estee Lauder Companies that started a sustainable

packaging policy. Based on the experience and knowledge gained through Aveda, Estee

Lauder Companies decided to develop a corporate policy for sustainable packaging. Thirdly,

innovation is achieved with imagining and integrating. Estee Lauder Companies believes that

having satisfied and committed employees is necessary for the growth of the company. In the

Annual Report 2009 it is stated that hundreds of groundbreaking product and program

innovations over the years come from the collaboration efforts and commitment of the diverse

employees who bring different approaches and ideas to the company. Sustainable packaging

and the conservation measures to reduce water usage are examples of process innovation,

while Aveda‟s natural products are examples of product innovation. This shows that internal

and external CSR activities are inter-related. The link between internal and external activities

is best described by Estee Lauder Companies itself when it mentions that the goal of its

corporate citizenship is to increase both shareholder and community value by stating: “The

progress of its environmental and safety programs, coupled with its philanthropic initiatives,

helps to make certain the company will be able to continue to Bring the Best to Everyone We

Touch” (Estee Lauder Companies Annual Report, 2009).

Meehan et al mention that the societal validity of a company commitment will be greater

when they are in alignment with emerging external frameworks for ethical and social values.

Estee Lauder Companies has received several external frameworks and certificates for its

CSR activities. For example, seven products of Aveda have received the Gold Level Cradle to

Cradle (CSC) certification, which made it the first cosmetics brand to have been awarded the

Gold Level C2C certification. The C2C certification verifies that a company uses healthy

materials and/or has eco-intelligent design (MBDC, Cradle to Cradle). Aveda received the

Gold Level certification for the ingredients used in its products and the Silver Level

certification for its packaging. In addition, Estee Lauder Companies received the ISO 14001

certification for its manufacturing sites. This certification gives requirements for

environmental management systems and shows that Estee Lauder Companies desires to

operate in an environmental friendly way. These standards can be seen as endorsements and

can be used as communication tools since they are a measure of the company‟s commitment

to environmental friendly activities.

In order to ensure long-term commitment and positive corporate image, it is necessary to have

business networks that share the same commitments. The business network consists of

suppliers, business partners, allies and customers. The shared commitments with upstream

and downstream partnerships are necessary to implement a company‟s CSR activities and to

increase a company‟s credibility. Estee Lauder Companies communicates its CSR

commitment to its suppliers in terms of environmental and safety standards of raw materials.

Furthermore, commitment is closely linked to consistency. A company can have a mission

and objectives related to CSR but if these objectives are developed for short-term profits,

corporate legitimacy and credibility will decline. Consumers are able to find out through

different media channels (internet forums, articles, TV documentaries, NGOs) about the lack

of CSR commitments of companies. In terms of consistency, the company describes its CSR

commitment by stating the following: “The Estee Lauder Companies realizes that to ensure

the long-term success of our Company, our financial goals need to be integrated with the

human and ecological impacts of our business.”1 Furthermore, Martin mentioned that the

company has been socially responsible since its establishment, but was late in communicating

its CSR activities to the consumers. For example, the first CSR report of Estee Lauder

Companies was published in 2007. This means that even though the company has been

socially responsible for years, consumers were not fully aware of what the company is exactly

doing in terms of CSR for a long time.

In conclusion, it can be said that Estee Lauder Companies has a long-term CSR commitment.

The CSR strategy of the company can be defined as the activities that are managed at

corporate level (and therefore apply to all brands) and activities that are managed by the

individual brands. The internal CSR activities are all at corporate level while the social

activities are categorized at corporate and/or brand level. The commitment of the company is

further recognized through several certifications in which stakeholders are able to indentify

Estee Lauder Companies as a socially responsible company. However, in order to increase its

corporate image, the company needs to communicate more to consumers and other

stakeholders in order to make them aware of the company‟s internal and external CSR

activities.

4.9.2 CSR Communication of Estee Lauder Companies

In this section, connections within the value network as the second important element of

implementing 3C-SR model, is going to be analyzed within Estee Lauder Companies.

1 http://www.elcompanies.com/citizenship/citizenship.asp

Connections within the value network, in other words the stakeholder approach, ensure

mutuality of interests and uniform commitment to shared values across the value network

(Meehan et al, 2006). The stakeholders of Estee Lauder Companies can be defined as their

suppliers, business partners, allies, NGOs, governmental institutions, employees and

consumers. Moreover, in order to succeed in communicating to consumers in terms of the

CSR activities of the company, the relationships with the rest of the stakeholders have to be

well managed as well. Negative reputation of the allies and partners, negative progress reports

of the NGOs and governmental institutions regarding the company‟s CSR activities and the

wrong fit between the selected suppliers and the company in terms of the environmental and

social values will effect consumers‟ evaluations towards the image of the company. In

relation to this, Normann and Ramirez argue: “Value occurs not in sequential chains but in

complex constellations”. Therefore avoiding stakeholder deficit, which leans on narrow

operational focus in choosing the right suppliers and building the right connections with the

stakeholders in the value network, carry significant role.

In terms of selection of the suppliers, Estee Lauder follows EHS (Environmental Health and

Safety Supply Chain) requirements. Each supplier has to sign off that they can meet corporate

EHS specifications of Estee Lauder Companies in terms of environmental and safety issues,

transportation and waste disposal. In the CSR activities section of the Annual Report of Estee

Lauder Companies, which was published in 2009, it is explained that 99 percent of the

production and sourcing of the company‟s raw materials are outsourced. Therefore, in order to

be totally consistent with the CSR vision of the company, Estee Lauder Companies expects

from its suppliers that they comply with all applicable government regulations for the country

in which they reside. It is also expected that suppliers adhere to the provisions specified in the

“Supplier Code of Conduct” of the company. Moreover, “Supplier Code of Conduct” outlines

the company‟s expectations for suppliers‟ environmental and social performance, including

components addressing wages and compensation, human rights, child and forced labour, safe

working conditions, anti-discrimination, freedom of association and environmental

responsibility. In addition, “Raw Materials Coding Package” is being updated to help

suppliers provide the finest ingredients that meet the strict environmental and safety standards

of Estee Lauder Companies. Furthermore in order to ensure compliance, a process of auditing

for the top-line suppliers is established and the company is still developing protocols in order

to respond to audit results in an appropriate way (The Estee Lauder Companies Annual

Report, 2009). Some of the accomplishments in terms of environmental supply chain

management of the company are listed below:

- Six suppliers of Estee Lauder Companies have committed to using renewable energy

for the manufacture of their parts.

- The manufacturer of Aveda‟s folding cartons runs their plant with 100% wind

power.

- Origins has also made a commitment to purchase folding cartons only from

manufacturers using renewable energy.

- In 2007, after the announcement of the company‟s commitment to engage their

global packaging suppliers in supporting and furthering their goals, Estee Lauder

Companies has also standardized the post-consumer recycled (PCR) content of their

shippers and carriers to 80 percent and increased their supplier commitment to

renewable energy.

In terms of the connections within NGOs and governmental regulations, Estee Lauder

Companies has shown great concern as well. Based on the information gathered through the

interview, which is conducted with Estee Lauder, Isabelle Martin mentioned that different

regulations are applied in the cosmetics industry based on the legislations of each country.

The company‟s point of view is to treat every consumer in the same way. That is the reason

why, Estee Lauder Companies applies the strictest regulations of the country that it has been

operating and centralizes its CSR operations and activities. Moreover, the goals that have

been set by the NGOs are taken into serious consideration in order to serve the best to their

consumers in terms of social and environmental responsibility as well as protecting the

company‟s reputation. Therefore, the company engaged with “Look Good Feel Better”

program, which reflects the industry initiative and is run by the US Trade Association in the

US. The program consists of spreading free products at the hospitals, providing volunteer

beauticians in order to give make up sessions. Within this program, the initiative of the

industry is being combined with the company initiative. Moreover, many cosmetics

companies worked together as partners in order to support the “Look Good Feel Better”

campaign. This campaign is a great example of how rival companies can work together with

the support of Trade Association in order to help people. In addition, one of the most

remarkable points of this campaign was in terms of assuring credibility of the act. Therefore,

no company mentioned its name on the products. Since many consumers think that CSR

activities are done part of a marketing campaign, this campaign was important to support the

credibility of the CSR activities. In other words, it is done because of the specific interest of

the companies in terms of CSR.

The connections with the employees are an important part of its internal CSR activities for

Estee Lauder Companies. Executive Chairman of Estee Lauder Companies says: “Great

companies depend on great people” (The Estee Lauder Companies Annual Report, 2009).

This vision of the company in terms of its employees is based on satisfying them in terms of

their work place, work conditions and safety conditions as well as making employees

contribute to the CSR activities of the company. Estee Lauder Companies state on their

website that all employees have a role to play and a stake in the success of their

environmental and safety programs. By doing so, the company becomes overall committed to

its CSR vision and mission while employee commitment towards the company increases as

well. Through the connections with the employees -which have been explained in the internal

CSR activities section in details-, Estee Lauder Companies aims to increase employee

satisfaction and commitment by encouraging and supporting their employees in terms of their

health and well-being, providing an inspired work environment and making them to

contribute more in CSR activities of the company in order to make them more attached to the

company‟s CSR values. Therefore, the annual report highlights the Health & Wellness

Programs of the company that focuses on the programs, which are provided for their

employees such as health checkups, skin cancer screenings, mammograms, fitness programs

and other activities. Moreover, the employee program, which is called “Think Smart”, is

developed to encourage the employees to submit their ideas in terms of coming up with

efficient and smart ideas. In addition, the program benefits employees as well as the company

itself to come up with more efficient and cost-saving solutions.

Furthermore, consumers are stated as one of the most important circle in the stakeholder chain

for Estee Lauder Companies. Therefore, consumers‟ involvement through company‟s CSR

activities in terms of understanding their feedback and demands are essential. 2009 Annual

Report of the company states that: “We recognize that our customers share our commitment

to protecting and preserving the environment. Each year, thousand of consumers worldwide

contact us regarding our environmental practices. Consumer queries on our environmental

packaging principles have nearly tripled since we published our first CSR report in 2007.” As

it has been mentioned in the literature review, it is very important for the consumers that the

ingredients used for the cosmetics products are traceable. This is the reason why the chosen

suppliers for the company are an important aspect for Estee Lauder to strengthen the image

and to ensure credibility. Therefore, the connections with the stakeholders are not in

sequential chains but operate together as constellations (Meehan et al, 2006).

4.9.3 CSR Consistency of Estee Lauder Companies

In this section consistency, as the third important element of implementing the 3C-SR model,

is going to be analyzed within Estee Lauder Companies. “Consistency refers to the

behavioural element of social resources over time and across all facets of an organizations

operation” (Meehan et al, 2006). Therefore the CSR activities of Estee Lauder Companies

have to be consistent in time in order to be considered as “credible” for cosmetics consumers.

Consistency has to be obtained in terms of the company‟s mission and vision statements,

selection of business partners and suppliers, which also have to be committed to socially

responsible values. In other words, even though Estee Lauder Companies shows successful

implications of CSR, its suppliers and business partners have to share the same CSR values

and they all have to work in a consistent way to create and maintain credibility. Moreover,

since consumer awareness is increasing towards environmental supply chain, it is crucially

important that Estee Lauder Companies is faithful to this issue. To sum up, Estee Lauder

Companies espouses social commitments within its value network, which is significantly

important to provide an advanced level of consistency in terms of CSR activities.

Furthermore, besides having consistency in the selection of suppliers, consistency has to be

obtained towards employee satisfaction and employee safety in order to increase

organizational commitment. Employee wellness activities, recognition awards, community

environmental protection projects, and regular internal communications are mentioned in the

website of the company as activities accomplished in order to have healthier, motivated,

involved, and better-informed employees. Estee Lauder Companies believes that consistent

employee satisfaction is an important aim of the CSR vision of the company. Therefore, the

reason why the consumers have mentioned Estee Lauder Companies during the interviews

depends on the remarkable communication created within the stakeholders in a consistent

way.

Estee Lauder Companies established the environmental sustainability program in 2007 and

published their first CSR reporting which highlights the commitment towards its stakeholders.

Moreover, in order to develop the CSR vision and activities of the company, the second CSR

Report was published in 2009. These published CSR reports are significantly important in

order to recognize the progress achieved by the company in terms of CSR. Estee Lauder

Companies stated goals in terms of employee safety, global philanthropy, sustainable

packaging, research and development, environmental stewardship and supply chain.

Moreover, the company‟s corporate strategy is based on the commitments and continuous

improvements, which are crucially important to ensure consistency of the CSR vision of the

company. In addition, being attached to consistent CSR missions and visions lead Estee

Lauder Companies to continuous developments in terms of CSR- based on the goals

mentioned above- in other words helps the company to maintain consistency in terms of

continuous developments.

To sum up based on the 3C-SR model, it is significantly important that the companies are

committed to their missions and values in terms of CSR and are sharing the same values with

their stakeholders regarding CSR in a consistent way. The commitments, connections and

consistency aspects of the company, which have been mentioned above, make Estee Lauder

Companies a “good corporate citizen”. In addition, as it has been stated in the literature

review, companies can be categorized as being reactive, defensive, accommodative, and

proactive based on their CSR involvement. Moreover, beyond being proactive is stated as

implementing strategic CSR (Porter and Kramer, 2006). Estee Lauder brand can be

categorized as a proactive brand in terms of its CSR activities, which is anticipating social

responsibility and doing more than required. On the other side some of brands of Estee

Lauder Companies such as Clinique and Aveda are implementing strategic CSR because of

the aspect that they do not only accept and anticipate social responsibility but also integrate it

into their core businesses. Therefore the difference in implementing 3C-SR aspects creates the

difference in CSR involvement.

4.10 Conclusion

Within the analyses of Estee Lauder Companies and its brands, it is aimed to come up with

answers towards one of the research questions of this paper. The research question is: How do

cosmetics brands define CSR? To answer this question, three sub questions are formulated in

order to understand whether CSR can be used as a way of differentiation, if CSR related

innovation has an influence on changing consumer behaviour and how important consumer

demand is for cosmetics brands in relation to the CSR activities.

1. Can CSR be used as a way to differentiate in the cosmetics industry?

Due to the competitive characteristics of the cosmetics industry, continuous developments are

significantly important in order to gain higher market share. Therefore, differentiation created

based on product characteristics is not enough to succeed. Cosmetics companies search for

other ways to distinguish themselves in order to be unique. In relation to this, companies

focus on building brand image and creating emotional links with their consumers rather than

just providing quality products. Based on this idea, the cosmetics brands focus on CSR

activities to strengthen their brand image (through creating links with CSR). During this

research, it is observed that many companies establish CSR vision and missions and integrate

CSR activities into their core businesses. Since consumers are becoming more aware about

CSR based on the influence of media channels, CSR is valued more and evaluated as a

differentiation factor for consumers.

In relation to the company analysis, communicating through the CSR activities was not a

preferred attitude of Estee Lauder Companies for many years as a company strategy.

However, it is observed that it became necessary for Estee Lauder Companies to

communicate the CSR activities with the consumers due to the increased consumer

awareness, competition and the need to differentiate. As a result, differentiation can be

achieved through CSR activities in the cosmetics industry.

2. Does CSR-related innovation have an influence on changing consumer behaviour?

Continuous developments are being driven by innovative ideas in the cosmetics industry.

Moreover, product innovation is not enough to succeed. Companies search for different ways

to innovate and differentiate themselves. Therefore, cosmetics companies implement CSR

strategies and activities in order to differentiate themselves from competitors and consider it

as a resource that they can run innovative businesses. Due to the increased awareness of the

consumers, which is observed through consumer interviews (consumers want to be informed

about CSR and value it), CSR related innovation is significant in order to influence consumer

behaviour.

Moreover, Estee Lauder Companies states that consumers are aware of and value the CSR

practices of the company. Even at the recruitment processes, candidates show great concern in

CSR involvement of the company. This shows that CSR activities have an influence on

consumer attitude. In addition, the increasing number of natural cosmetics brands/shops is a

reflector of changing consumer behaviour in return of having increased demand.

3. How important is the consumer demand for cosmetics brands in terms of CSR activities?

Consumer demand is important while implementing CSR activities in order to enhance

positive brand image. Cosmetics companies improve their CSR activities based on the

consumer feedback. In addition, consumer demand is influenced by mass media, NGOs and

governmental policies as well. On the other hand, CSR activities cannot always be developed

based on the needs of the consumers since consumers may not have sufficient knowledge and

information based on the importance of the issue. In that sense, it is important to educate

consumers in order to come up with sufficient evaluations based on the consumer demand.

Due to this fact, CSR activities create consumer demand. In relation to this, it is observed that

Estee Lauder Companies educate its consumers in order to create involvement, which leads to

increased consumer demand.

Moreover, the CSR activities have to be in alignment with the brand‟s identity. Therefore, if

consumer demand for CSR activities does not comply with the brand identity, the expected

impact cannot be created and CSR activities cannot be influential on consumer behaviour. In

addition, Estee Lauder Companies apply different CSR activities for different brands in order

to meet different consumer demands. To sum up based on the conclusions of the sub

questions; the research question can be answered by saying that cosmetics companies define

CSR as an innovative way to differentiate themselves from competitors in order to create

consumer demand towards socially and environmentally responsible cosmetics brands.

5. Consumer Analysis

This chapter focuses on analysing the results of the interviews that are conducted with the

consumers.

5.1 Demographic Analysis

This section is going to provide information about the demographic aspects of the interviews,

which are related to the interview questions 1, 2 and 3. These questions are sequentially asked

to understand:

- How old they are;

- What their nationalities are and

- What their occupations are

Therefore, 25 interviews were held within the age range of 18 to 40 years old. Interviewees

were female consumers who live in Brussels. 15 of the interviewees were students and 10 of

the interviewees were working people in different fields. Since most of the interviewees were

students, the majority of the age range can be stated between 18 to 25 years old. In addition,

the interviews were conducted in Brussels and based on the multinational characteristics of

the city the interviewees were not just from Belgium but also of different nationalities. The

age, nationality and occupation distribution of the interviews can be found in the Appendix 5.

5.2 Analysis of Cosmetics Brands

After analysing the demographics, question 4 and 5 are asked to find out:

- The favourite cosmetics brands of the interviewees and;

- The factors they find important while buying cosmetics products.

In terms of the favourite cosmetics brand names of the interviewees, it is seen that Clinique

and L‟Oreal are mentioned as the most favourite cosmetics brand names. Moreover Estee

Lauder, The Body Shop and MAC are answered as the second most favourite brand names.

The figure in the next page shows the distribution of the favourite cosmetics brands

mentioned by the interviewees.

Figure 7: Favourite Cosmetics Brands

In relation to interview question 4:What are your favourite cosmetics brands?

Furthermore, most given answers as purchase factors are price and quality followed by

duration and ingredients factors. In addition, based on the answers of the interviewees it is

seen that there is a tendency in relating price with the expected quality, duration and with the

nature of the ingredients. In order to be more clear, the nature of the ingredients refer that the

products are fragrance free, not allergic and do not contain unhealthy chemical additives

based on the answers of the interviewees. Figure 8 shows the decision factors of the

consumers in term of their cosmetics product consumption.

Figure 8: Purchase Decision Factors

In relation to question 5: What factors do you find important while buying a cosmetics product?

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Although 16 people out of 25 have mentioned price as an important factor for cosmetics

consumption, 9 people considered quality more important than the price and mentioned that

price is not a significant factor for them. The reason why price is important for the majority of

the interviewees is that they were students who do not earn a lot of money. Examples of the

answers of the interviewees concerning these factors are stated below:

- “The price can be higher since luxury products last longer.”

- “I don‟t want to buy cheap cosmetics products since my skin is very sensitive.”

- “Due to the good quality of the cosmetics products, I don‟t mind paying a higher

price.”

- “Quality and price are the most important factors to me, but since I‟m a student I

really pay more attention to the price of the products.”

Moreover, another factor that influences the buying decision is the image of the cosmetics

brands. Consumers think that the better the image; the better the quality, the longer the

duration and the healthier the ingredients are for the cosmetics products. Therefore, they are

more willing to pay a higher price. In alignment to this interviewees, who considered price as

an important factor, stated that L‟Oreal, Max Factor, Nivea and Maybelline are their favourite

cosmetics brands. On the other side, consumers who do not consider price more important

than the quality stated that their favourite cosmetics brands are Estee Lauder, Dior, YSL,

Sisley, Lancôme, Clinique and MAC.

5.3 Cosmetics Brands and Corporate Social Responsibility

Lately, Corporate Social Responsibility activities are also highly used while creating and/or

strengthening the brand image. Most of the time, consumers believe that providing quality is

the main responsibility of the cosmetics brands. Therefore, CSR activities might be a way for

companies to differentiate themselves in terms of having strong and unique brand images.

In this section, it is aimed to learn within question 6 and 7:

- Whether consumers know socially responsible cosmetics brands and

- If they are aware of the CSR activities of the companies.

The figure below shows the distribution of the socially responsible cosmetics brands that

consumers are aware of.

Figure 9: CSR and Brand Awareness

In relation to question 6: Can you give examples of cosmetic brands which are socially responsible?

5.3.1 CSR and The Body Shop

It was remarkable to figure out that The Body Shop was the most given example of a socially

responsible cosmetics brand. In addition, this should be commented as a success indicator for

The Body Shop since half of the interviewees recalled The Body Shop as a socially

responsible cosmetics brand, whether it is one of their favourite brands or not -as it was asked

in question 4-.

Another important aspect about The Body Shop is that when people are asked about The

Body Shop‟s CSR activities; all the answers were related to fair trade, supporting women

rights and not doing animal testing. Figure 10 in the next page, shows examples of these

cases.

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CSR Examples

CSR and Brand Awareness

Figure 10: The Body Shop advertisements against animal testing and supporting women‟s health.

Hence, it can be said that these activities are the ones that have social impacts that benefit the

society and create indirect links with the consumers. Unlike Clinique, which builds its CSR

activities on just ingredient quality -a direct purchase decision factor-, The Body Shop builds

its CSR activities on combining direct and indirect purchase decision factors such as

protecting animals, protecting the environment and protecting the people (consumers as well

as the employees). Sophie Gasperment, the Chief Executive of The Body Shop, states in the

2009 Values Report: “We believe that our values are at the heart of our commercial success

and they are the key to growing our business. As we go forward we will be more creative in

bringing our message to customers who are searching for brands with principles that they can

trust. In doing this we will deliver more positive benefits to everyone that we touch.”

Moreover, The Body Shop states that they‟re different regarding their values. These values act

as a practical guide to decision making at all levels of the company, helping to insure that the

profits are made with principles. And these values are stated as being against animal testing,

supporting community trade, activating self esteem, defending human rights and protecting

the planet at the global web site of the company. Therefore, it is believed the reasons that lie

behind ranking The Body Shop (top of mind awareness) as the highest in Figure 9, depends

on the values, which were mentioned by Gasperment.

5.3.2 CSR and MAC

MAC, Estee Lauder, and Clinique were stated as the most given answers in terms of socially

responsible brand names after The Body Shop. Also MAC and Estee Lauder focus on societal

issues such as establishing HIV and breast cancer foundations. The consumers within its act

towards HIV recall more specifically MAC by using famous spokespersons such as Lady

Gaga and Cyndi Lauper to create awareness. The meaning transfer theory is the most relevant

one while brands are using celebrities in their advertisements. “The central premise of the

meaning transfer theory is that a celebrity encodes a unique set of meanings, which if well

used can be transferred to the endorsed product” (Tellis, 2004). Firstly, the meanings encoded

within the image of the celebrity have to be aligned with the brand image. Secondly, the

meaning transfer between the image of the celebrity and the brand has to be delivered in a

desired way to the consumer. And lastly, customers are expected to capture the meanings

transferred with the ad after purchasing the product. (Tellis, 2004) Therefore, while using

Lady Gaga and Cyndi Lauper as endorsers, MAC applies the meaning transfer theory in a

successful way. This is because; both Lady Gaga and Cyndi Lauper are extreme characters

that MAC can align with its own brand image to attract consumers. Moreover, printed

advertisements are chosen as the communication tool in order to transfer the message of the

campaign to the consumers. Figure 11 shows the advertisement used for the HIV foundation

created by MAC.

Figure 11: MAC‟s Viva Glam Campaign advertisement.

The quote below the picture: “Every cent from the sale of MAC Viva Glam lipstick and lipglass goes toward

helping women, men and kids everywhere affected by HIV and AIDS.

In addition, MAC‟s campaign called “Back-to-Mac”, aims for making consumers to return 6

empty MAC products and receive 1 new lipstick of their choices as a reward. By these

activities, the brand‟s objective is to create environmental awareness (through recycling) and

also to strengthen its brand image in terms of being considered as a socially responsible

company.

5.3.3 CSR and Estee Lauder

Another example of a socially responsible cosmetics brand mentioned by interviewees is

Estee Lauder and its “Breast Cancer Awareness (BCA)” campaign. The brand focuses on

raising awareness for breast health every October, which is the month to fight for breast

cancer. One of the interviewees also stated that during that month make-up artists go to the

hospitals to visit patients who are suffering from breast cancer and having make-up sessions

with them as a responsible act. Moreover, during that month Estee Lauder spreads flyers,

which inform and make women aware of how to screen breast cancer by themselves.

Furthermore, during that month several products are selected and promoted differently-to take

the attention- while donating the amount gathered, to the breast cancer foundation.

5.3.4 CSR and Clinique

While consumers recall the CSR activities of The Body Shop, Estee Lauder and MAC in

terms of supporting the society and the environment, the reasons for recalling Clinique are

more related with the ingredients used in the products. When the interviewees are asked to

give more details about Clinique‟s CSR activities, it is understood that customers perceive

Clinique as a quality brand in terms of offering 100% fragrance free and allergy tested

products. Therefore, it can be said that Clinique‟s CSR activities directly focus on the

consumers and their personal experiences.

5.3.5 Limited CSR Awareness

The third most given answer for question 6 was “I don‟t know”. Moreover, “I don‟t know”

answer can be divided into two categories which consumers mean that they really don‟t know

any brand names/CSR activities or consumers who cannot remember the brand names but still

are aware of the CSR activities within the cosmetics industry.

The interviews showed that interviewees had hard time in remembering cosmetics brands

(brand recall) or relating the brand names within their CSR examples although they were

aware of the CSR activities. Although 6 women out of 25 had no brand name and an example

of a CSR activity of a cosmetics brand in their mind, it was still remarkable to collect the

examples mentioned above since CSR is still a young concept for consumers. In that case,

repetition and communication tools are significantly important to create brand awareness. It is

seen that the recalled brand names are the ones, which continuously mention their CSR

activities. For example Clinique‟s slogan is exactly what the interviewees recalled as an

example of the company‟s CSR activities, which is “Allergy tested. 100% Fragrance Free.”

The Body Shop is another successful cosmetics company in terms of building CSR

awareness. Whenever a consumer enters The Body Shop store, every time she

hears/reads/experiences a CSR related impulse so that, the consumers can create a bridge

between the brand name and the social responsiveness of the company. This is the reason why

these brand names are the most recognized and recalled ones in terms of CSR. In that case,

effective and repeated advertising carry an important role to make consumers aware and even

persuaded. Tellis (2004) says: “Some advertisers may leap to the conclusion that even if an ad

is entirely ineffective now, time and repetition will ensure its ultimate success. Another way

of stating the same premise is that advertising takes a long time to wear in with consumers.

From this reasoning arises the recommendation that even if advertising seems ineffective

initially, persistence with the campaign will ultimately bear fruit” (Tellis, 2004). For example,

The Body Shop integrates CSR related activities into its vision, mission and the overall

philosophy of the company. Moreover, The Body Shop chooses to reflect this point of view

within different ways of advertising continuously. In addition, as it has been mentioned in the

methodology section, the way The Body Shop manages with commitment, value connections

and consistency issues (based on 3C-SR Model) is the reason why consumers identify The

Body Shop as a socially and environmentally responsible company.

5.4 CSR Advertising and Persuasion

Advertising is an important route to persuasion in terms of changing consumers‟ opinion,

attitude or behaviour as a way of marketing communication. Moreover, persuasion through

advertisements can be achieved through the central route and/or the peripheral route. The

route by which an advertisement is able to persuade consumers depends on the involvement

of the consumers and how much they think about the message of the advertisement. “When

people have both the motivation and the ability to evaluate a message, their likelihood of

thinking about it will be high. They will look for and respond to strong arguments in favour of

the message and counter what they think are weak reasons. This route of potential persuasion

is called the central route.” On the other side, “If consumers have the motivation but lack the

ability to evaluate a message, they are likely to respond to cues associated it with the message.

This form of persuasion is called the peripheral route” (Tellis, 2004). The Elaboration

Likelihood Model (ELM) summarizes the routes of persuasion since understanding how

persuasion works is significant in order to analyse consumer behaviour for cosmetics products

through CSR related advertising.

The chosen route of persuasion depends on the characteristics and the industry of the product.

In other words, it is not right to comment that one way of persuasion route is superior to the

other one. Each routes of persuasion can be effective for some specific product categories. In

addition to this, there are some general assumptions for specific industries based on the

characteristics of the products and the characteristics of their consumers. Consumers‟

motivation, ability and opportunity for specific products may differ from one industry to the

other. For example, there is a clear difference in terms of persuading consumers when they

consider buying a car or cosmetics products. When consumers think of buying a car, they are

more involved in the need of having more information and also the ability to process that

information. On the other side when consumers buy cosmetics products less information is

needed, which makes it easier to process the information, in order to give the buying decision.

To sum up, since the ability of the consumers to process the information is significantly

varied, the central route or the peripheral route is chosen for specific products to communicate

with the consumers based on the characteristics of the product or the industry.

During the interviews it is observed that consumers give their purchase decisions based on the

process of “feel-learn and do” (in relation to the Foot-Cone-Belding (FCB) grid) towards

questions 13 (Have you ever bought a socially responsible cosmetics product after being

informed at a store?) and 14 (What kind of CSR activities will lead you to change cosmetics

brands that you are loyal to?). “Feel-learn and do” processes stand for what consumers feel

about the brand images, what information they have in terms of the cosmetics companies‟

CSR activities and lastly which brands to buy. Based on this process consumers decide on

their purchase decisions as well as changing their loyal brands. Especially the “learning” part

is very important when CSR is the argument for persuasion since consumers don‟t have much

information regarding this issue.

5.4.1 Persuasion and CSR Driven Cosmetics Brands

Based on the characteristics of the cosmetics industry, the peripheral route is the most chosen

way to persuade consumers through advertising. The peripheral route is used when one or

more of the MAO (motivation, ability, opportunity) factors is/are low. Cosmetics products are

quality products that are bought for their quality and for aesthetic reasons. Therefore the

motivation, ability or opportunity aspects are not the same as the products in the first, third

and the fourth quadrant of the FCB grid. (Methodology, Figure 6) The buying decision

process is influenced more by the affective elements for the cosmetics products, which

represent the feelings associated with the products. Affective elements stand for the peripheral

cues such as the image of the endorsers, background music, humour elements and the number

of arguments used (De Pelsmacker et al, 2007). Consumers‟ product decisions require high

involvement whereas less information is needed during the peripheral route processing for the

cosmetics products. Moreover the brand identity and the message of the advertisement, which

are used to communicate with the consumer through the peripheral routes, have to be aligned

in order to create or strengthen the brand image. The sum up, the reasons why the peripheral

route is preferred by the cosmetics brands through their advertisements as a way of persuasion

are stated as the following:

-Since less information is needed for the purchase decision of cosmetics products,

cosmetics brands need to focus on the affective elements of the products/brands.

-Consumers are influenced by the emotional links more than the information given

with the words and numbers in a cosmetics advertisement.

Using emotions have several advantages since the affective elements are important in order to

persuade consumers in an advertisement. Firstly the stimuli, which are created in order arouse

emotions, draw the viewers into the action and distract them from the advertiser‟s intention to

persuade. Secondly, emotions require less effort from the viewer since affective elements

mentioned in the advertisements such as pictures, music and actions require less cognitive

effort of the viewer. Thirdly, the emotion-arousing stimuli are considered more interesting by

the consumers. In addition, these affective elements are easier to recall than the factual

evidences and emotions might be remembered longer than the arguments. And lastly,

emotions may lead consumers to change their behaviour sooner than the logic would (Tellis,

2004).

De Pelsmacker (2007) also states that: “The reason why consumers start paying more

attention to peripheral cues is that in many ads peripheral cues form the only processable

information under circumstances of low motivation, limited ability or limited opportunity.

Advertisements without attractive peripheral cues, but with an easy-to-process, product-

related message might also work under low MAO, simply because the cognitive resources to

form counter-arguments are lacking.” Moreover, heuristic evaluation, which is having

inferences based on the cues in order to form cognitively based attitude, is important when

one of the MAOs is low. Therefore, heuristic cues may be used by consumers as reassurance

and credibility factors such as brand name, reputation, experts endorsing the brand and price

level. (De Pelsmacker et al, 2007) Moreover, during the interview it is observed that people

consider price level as a reflector of the quality, or the images of the endorsers as a source of

credibility for the specific brand names. As a consequence, heuristic cues have an important

impact on consumers through the advertisements during the information processing of the

peripheral route. In addition, when consumers are asked in order to learn how they find out

that a cosmetics brand is socially responsible, TV and magazine advertisements were the most

given answers. Therefore, it can be concluded that advertisements through these

communication channels are important in terms of creating/supporting brand awareness and

as well as awareness through the CSR activities of the cosmetics companies. The figure 12

shows advertisements from L‟Oreal and Lancôme using famous people in their

advertisements to attract consumers‟ attention.

Figure 12: L‟Oreal and Lancôme Advertisements

Within these advertisements, both cosmetics brands aim to make use of the images of these

famous spokespersons. Consumers have the idea in their mind that if Beyonce is using

L‟Oreal lipstick and Uma Thurman is applying Lancôme foundation these brands should

provide good quality. Especially within the quote from Beyonce saying: “With this rich,

creamy lip colour, my lips are irresistible. And we‟re worth it.” increases the credibility of the

product/brand. In addition, consumers may want to identify themselves with these famous

people as well as with the cosmetics brands. Moreover, using famous spokespersons in the

advertisements can lead to positive cognitive responses and as a consequence to change

consumers‟ attitudes towards the brands in a favourable way (De Pelsmacker et al, 2007).

In terms of CSR advertising, spokespersons can be used as a way of peripheral route of

persuasion in order to create credibility and to ensure the trustworthiness of the message.

Spokespersons can be very influential in terms of changing people‟s attitude towards

responsible cosmetics consumption and consumers may feel more attracted towards the

subject because of the emotional links created with the spokesperson. Since consumers are not

motivated or not able to process the message through CSR related advertisements, using

endorsers is a right way of persuading consumers through peripheral route.

Figure 13: Estee Lauder‟s Breast Cancer Awareness Campaign with Elizabeth Hurley.

The figure above is an example of CSR related advertisement of Estee Lauder using a famous

spokesperson. Through this ad, women are made conscious about breast cancer and made

aware about breast health. The age and the identity of the endorser, the link between the

spokesperson and the consumers and the right fit between the message of the advertisement

and the spokesperson are significantly important in terms of the success of the advertisement.

Therefore, Elizabeth Hurley is a famous, glamorous actress whose identity fits with the image

of Estee Lauder. In addition because of her age (45), she is able to connect with the women

about the risk factors of the breast cancer. Moreover, since her grandmother has died because

of breast cancer, her experiences and advices can be more influential on consumers.

Furthermore besides using celebrities as endorsers in the advertisements, experts and lay

endorsers can be used based on the characteristics and roles of the communication process

(Tellis, 2004).

CSR is a subject that can arouse consumers‟ emotions. Therefore, the peripheral route can be

used as a way to influence consumers in terms of CSR. It is aimed to create emotional links

between consumers and the cosmetics brands rather than developing cognitive attitude

formation that is making consumers carefully think about the substance of the message.

Consumers rely on how the advertisements make them feel rather than what the

advertisements tell about through the peripheral route (attitude formation) (De Pelsmacker et

al, 2007). Therefore, CSR is about considering the society, environment, about being aware

and feeling responsible. In that case, consumers can only be attracted through creating links

based on consumer awareness and sensitivity. In alignment with the “feel-learn and do”

process, consumers are firstly emotionally attracted to the CSR topic, secondly informed and

taught about the subject and lastly led to action.

Moreover when interviewees are asked if they find it important that cosmetics companies are

socially responsible, they answered as “yes” because they feel themselves happy and consider

themselves as a good person when they make a responsible purchase. Therefore, CSR

activities can be stated as a way of creating emotional links with the consumers and the

peripheral route is the right way to achieve it.

5.4.2 Consumers’ CSR Perceptions

Within question 8, it is aimed to understand:

- If consumers really appreciate CSR or consider it just as a marketing tool, in other

words just “green washing” -even though the consumers remember CSR activities of

the cosmetics brands-.

Based on the comments of several interviewees, cosmetics industry is meant to create a

difference in terms of physical appearance and physiological mood. Hence generally talking,

cosmetics industry has to reflect “uniqueness” within itself. This is the reason why the

interviewees weren‟t considering CSR activities as just green washing but as a clever concept

to be different. CSR applications are beneficial for companies as well as the consumers and

the society.

On the other hand, not all the consumers were that positive in this case. Several interviewees

were commenting that they would definitely search for information on the websites after

learning about cosmetics companies‟ social commitments such as searching what they have

done before or whether having certificates or not (in terms of including scientifically proven

healthy ingredients). Some other comments of the interviewees are as the following:

- “I don‟t know if I believe that it makes a difference but if I hear negative reports, I will

not buy the products.”

- “I don‟t believe that luxury brands will do it just for doing it, because the image is

important for them. So I do trust luxury brands if they say they are doing so.”

- “I do believe in it; the more focus is placed on these campaigns, the more brands will

participate. In the end it will benefit the whole society.”

- “Independent from the impact of these campaigns I think the primary objective is the

awareness created among the people.”

- “Of course I do. However, I assume that every company should be doing it and don‟t

necessarily needs to use it as a communication tool.”

To sum up, although there are opposing ideas in terms of the trust towards CSR activities of

the companies, consumers don‟t mean that they and the society don‟t need CSR activities.

They really want to see the impact of it. If companies can make consumers believe the

sincerity and can prove the end results of what they are doing, the consumers are very much

open to this concept. Moreover, the price levels of the products are seen as an indicator of the

product quality as well as the brand image. Hence, consumers are more willing to trust the

CSR activities of the expensive brands more than the others.

5.5 CSR Awareness

In order to understand when and how consumers become aware of the CSR concept in the

cosmetics industry, the consumers are asked to answer:

- The first time that they have heard about the social responsibility in terms of the

cosmetics products (question 9) and;

- How they find out that a cosmetics brand is socially responsible (question 10).

During the interviews conducted within 25 interviewees, quite different answers were

gathered towards the first time that they have heard about social responsibility for the

cosmetics products. The answers varied between “I don‟t know” or “I‟ve just heard about it

during this interview” and up to “15 years ago”. In addition, it has to be mentioned that the

majority (13 interviewees) of the interviewees mentioned that the first time they have heard

about the social responsibility for the cosmetics products was 4 to 7 years ago. One of the

reasons for the varied answers for question 9 is the age difference between the female

consumers. For example, when 18-year-old females were asked about the first time they have

heard about the social responsibility in the cosmetics sector they answered as “3 years”. On

the other side, 2 of the female consumers between 30 and 40 years old were asked the same

question and their answers were “15 years”. The figure below shows the distribution of the

CSR awareness through the years.

Figure 14: Years of CSR Awareness

In relation to question 9: When was the first time that you have heard about social responsibility for the

cosmetics products?

Even the answer for question 4, which was about learning the favourite cosmetics brands of

the consumers, the answers of female consumers between 30 and 40 years old were richer and

more detailed than the answers of the 18 years old consumers. Therefore, the age clearly is a

factor in terms of the accumulated knowledge that has been gathered through the years in

order to state the level of awareness. Secondly, what has been figured out is that most of the

interviewees were aware of various corporate social responsibility acts in the society such as

environmental issues and animal rights. Especially consumers have had a growing interest in

the biological/ecological food industry for many years. On the other hand, since question 9

was structured specifically to learn consumers‟ awareness for the cosmetics products, the

industry specification shortened the awareness period. In other words, although people were

aware of the CSR activities within different industries for a long time, CSR activities of the

cosmetics industry were a recent experience for them. The reason for being more aware about

the CSR activities of other sectors is that the visibility and repetition is more than in the

cosmetics industry. For example, the growing interest and awareness towards the biological

food can be the result of the frequent informing process through different channels of the

mass media. When people go for shopping at a grocery store, it is very easy to catch that a

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product is biological. Biological foods have distinctive packaging such as tags, certificates or

colours (generally green since it is related to the environment). On the other side, for the

cosmetics products consumers have to read the information booklet given inside the package.

So it is harder to get the information compared to the biological foods. For example one of the

interviewees commented by saying “Most of the brands provide CSR related information such

as -this product is not tested on animals- within small letters in the information booklet.”

Therefore, expecting huge interest and awareness towards it, might be hard to achieve within

short term.

Furthermore, within question 10 it is aimed to figure out how consumers find out that a

cosmetics brand is socially responsible. Based on the answers of the interviewees, it is seen

that the largest source of information is the mass media. 15 people out of 25 mentioned that

TV and magazines are the communication channels that consumers receive information

towards CSR activities of the cosmetics companies, which is the highest number of answers

for this question. Internet/forums/websites, store activities, articles/newspapers are the other

sources of information given sequentially based on the number of answers.

On the Internet, consumers check the web pages of the cosmetics brands and become aware of

their CSR activities. Furthermore, they read forums and learn other consumers‟ experiences

and opinions, and come across articles related to CSR in the cosmetics industry. Moreover,

people can read newspapers online and watch documentaries related to CSR issues and make

themselves aware within their own interest. Figure 15 in the next page shows the sources of

information in terms of CSR activities gathered from the interviewees.

Figure 15:Source of Information

In relation to question 10: How do you find out that a cosmetics brand is socially responsible?

In addition, store activities are also one of the highest main sources of information for

consumers. Store activities include store displays, having conversations with the sales

persons, receiving samples and goodies, receiving information booklets, having donation

boxes which people can support foundations or social acts through donating and receiving

pins for special occasions (such as receiving pink ribbons during the October which is the

month for breast cancer awareness, Estee Lauder).

Moreover, articles and newspapers were stated as sources of information in terms of social

responsibility aspects of the cosmetics companies. Consumers like to read the articles of the

newspapers and become more aware of the facts going on. Other sources of information given

by the interviewees are billboards, info booklets of the products, through friends and school,

employees of the company itself, celebrities as spokespersons of different CSR campaigns

and scientific certificates that proves the quality of the products. In terms of providing

scientific certificates, it is easier to build trust from consumers since it is a way of using

professional endorsement. “Consumers typically do not know enough about a new supplier to

have confidence in buying its product. In this case, advertising could provide information to

reduce the consumers‟ uncertainty or it could provide other signals (e.g., endorsements) to

build consumers‟ trust. For instance, Neutrogena advertises its product as dermatologist

recommended for acne-prone skin. In the skin-care category that is cluttered with many

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brands each spending millions on advertising, Neutrogena was able to earn the credibility of

consumers, by relying on this professional endorsement” (Tellis, 2004).

Moreover, one of the interviewees said: “I learned a lot about CSR activities during my

internship at a cosmetics company. At first, I barely knew anything but during my internship

all the employees were informed and involved within CSR activities. Also, I have shared my

own interpretations with my friends and I believe that it was a contribution for the awareness

of the society. And it made me feel a better person.” Another interviewee commented by

saying: “Although I was aware about environmental issues, the actions towards protecting

animals and many issues related to social awareness; these were at the superficial level and I

even didn‟t know the word CSR and what it stands for. Since I am a marketing student, during

my education I have had the opportunity to learn more about this subject and became more

aware and sensitive about this issue.” Therefore, based on these comments, it can be said that

if the companies can provide efficient education and trainings towards their employees they

may increase the level of awareness of the society within their own links.

In addition, obtained knowledge at the schools are also very important. Younger generations

can be educated about CSR so that they will value it even more in the future. In this way,

consumers will be more sensitive about CSR when buying a product and demanding for it. As

a result, companies will be more motivated to perform CSR activities. Therefore, social

awareness will be increased in the long term in a consistent way. Moreover, at some

universities, students are offered CSR and CSR management courses, which help them to

have an advanced level of awareness in terms of CSR and this, will lead to easier recognition

processes.

Furthermore when consumers are asked about the first time they have heard about the social

responsibility within question 9, 10 of the 25 interviewees answered while giving The Body

Shop as an example although they were not asked to give an example of a brand name. 10 of

these interviewees said that The Body Shop is the brand, which has introduced them to CSR

within the cosmetics sector. It doesn‟t mean that they knew the term and what CSR stands for

but they became aware of that a cosmetics company can support environmental and social

causes voluntarily. The reason enabled consumers to consider The Body Shop as a socially

and environmentally responsible brand, actually depends on the communication channels,

which have been created between the company itself and the consumers.

The Body Shop uses most of the communications channels as a source of information for

consumers, which have been mentioned above. The most important communication channel

for The Body Shop is the store activities, which they run the social and environmental

campaigns. Therefore, since it is a personal experience, the highest rate of awareness is being

raised. This is the reason of why the interviewees gave The Body Shop as an example while

answering question 9.

Lastly, 2 consumers answered as “I don‟t see it” when they were asked how they find out that

a cosmetics brand is socially responsible. The reason for this is that, these 2 interviewees were

the youngest participants of this research. They didn‟t have much idea about CSR activities of

the cosmetics companies as well as having troubles in remembering the brand names. So

although they were aware about social issues, they weren‟t able to match cosmetics company

names with specific CSR activities.

5.5.1 CSR Perceptions towards Information Sources

Question number 10 was aimed to learn how consumers find out that a cosmetics brand is

socially responsible. Question number 11 aims to understand:

-How consumers feel about being informed in terms of CSR activities of the cosmetics

brands.

Figure 16, in the next page, shows the reactions of consumers towards CSR information.

Figure 16: Reaction Towards CSR Information

In relation to Question 11: How do you feel about being informed about social responsibility aspects of

companies?

The most given answer is that consumers are happy to be informed about CSR activities of

the cosmetics brands. It is observed that they don‟t want to be pushed and want to receive the

information within their own initiatives. One of the interviewees said that: “I prefer reading

the information that takes my attention or listen to it on TV whenever it is interesting to me.

But I don‟t like to be stopped and informed when I‟m checking a store and during the time of

shopping. But overall, I can say that I feel happy to be informed and having ideas about the

cosmetics brands‟ responsible activities.” Moreover, another interviewee commented by

saying: “I am interested in being informed if I‟m really interested in the product and/or if I‟m

considering buying the product. Otherwise, if I‟m just checking I don‟t want to spend my time

being informed for a product that I‟m not interested in to buy.” Based on the answers of the

interviewees, the participants who said that they find being informed interesting they

expressed themselves saying as “I find it interesting but I don‟t hear it a lot” and “I find it

interesting but I need to be informed more”. Consumers are happy to be informed in the end,

whether they are interested, feel bored or neutral. Their expectation is not to face aggressive

attitude and to use their own initiative while being informed.

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5.5.2 Consumers’ Value of CSR

Within question 12, interviewees are expected to elaborate:

-Whether they find it important that the cosmetics companies are socially responsible.

The answers gathered are listed below:

-“I find it very important. Maybe 100 years ago, there were few cosmetics brands and

even being able to produce the cosmetics products was a differentiation strategy for a

company. But lately because of the competitive aspect of the cosmetics industry,

companies have to focus on new competitive ways. I believe that CSR is a beneficial

competitive advantage for companies as well as for the consumers.”

-“Cosmetics products are directly linked with our skin health, so being a responsible

company in terms of the ingredients is a must for cosmetics brands. Moreover, I want

to learn where the products come from since I‟m applying it on my skin.”

-“I find it important. The more companies do it, the better the impact will be for the

world.”

On the other side, one interviewee stated that it is crucially important for a cosmetics

company to be socially responsible, she also carries a doubt in order to fully trust the

companies if they are keeping their promises and achieving the goals that they have aimed in

terms of donations. Therefore, one of the interviewee expressed her ideas by saying: “I

appreciate it very much that, cosmetics products don‟t include harmful ingredients; carry the

responsibility towards protecting people‟s health, protecting animals or donating foundations.

However, as a consumer I have question marks in my mind about whether promises are being

held or not.” Interviewees agreed on this subject within their answers that CSR related

activities should be trustworthy. They want to be convinced that the cosmetics companies are

actually being socially responsible.

Another perspective, which was observed through the interviews is that although people find

the CSR activities important towards the environment and the society, they don‟t find it

important while buying a product. Since the brand image is a reflector of the quality for the

consumers, they don‟t question the ingredients. In the end, for this segment of the consumers,

CSR activities are just interesting to hear and to observe but not a decisive factor while

buying a cosmetics product.

5.5.3 CSR Related Cosmetics Consumptions

The 13th question was asked in order to learn:

-If consumers ever bought a socially responsible cosmetics product after being

informed at the store.

The aim of asking this question is to learn more about the point-of-purchase communications.

“Point-of-purchase or POP advertising, also called in-store, point of sales or POS advertising,

can be defined as any promotional material placed at the point of purchase, such as interior

displays, printed material at shop counters or window displays. However, it also includes in-

store broadcasts, video screen demonstrations, shopping-trolley advertising, shelf talkers,

coupon dispensers, wastepaper baskets and interactive kiosks” (De Pelsmacker et al, 2007).

Therefore, 8 people out of 25 interviewees gave the answer “yes” and 17 people gave the

answer “no” for the question whether they have made a purchase after being informed at a

cosmetics store. Moreover, as it has been mentioned before, point-of-sales communication

was defined as receiving information at the store while talking to a sales person, paying

attention to the store displays, receiving samples and information brochures by the

interviewees. 8 out of 25 consumers stated that they were informed at the cosmetics shop and

then made a purchase. Their arguments are:

-“I don‟t believe that the sales people at the cosmetics shops have the required

information so I don‟t trust what I hear from them. This is the reason why I prefer

informing myself at the store by reading the brochures and the store displays. The

Body Shop is an example for me.”

-“Yes, I remember that I bought a product of Sothys which is a French cosmetics

brand. The sales person seemed very reliable and she informed me a lot about skincare

rather than just mentioning about the product. Also, sometimes I buy the products after

trying the samples that I received from the cosmetics shops.”

Moreover, Sisley and Clinique were the other cosmetics brands that have been purchased after

being informed at the store.

On the other side, the arguments of the interviewees who answered as “no” are:

-“I don‟t think that the sales people are qualified enough to inform me and to provide

required knowledge. Therefore I am not open to be persuaded by them.”

-“The conversations that I have had with the sales people were more about learning

new product offers and about the duration of the products.”

-“In general, I don‟t like to talk with the sales people as I always feel obligated to

purchase therefore I am not aware if a product is socially responsible.”

It can be said that there is a tendency of underestimating the sales people and not carrying

trust towards them. Therefore, cosmetics companies may focus on trainings of their

employees more in order to change the customers‟ attitude towards this issue. In addition to

this, cosmetics companies can focus more on attracting consumers through other point of

purchase communications that may lead consumers to use their own initiatives without feeling

obligated to talk to the sales person.

It is also observed that people approach more positive towards communicating to the sales

person at The Body Shop stores compared to the other cosmetics brands. First reason is that

The Body Shop products are being sold at their own The Body Shop stores. Therefore,

consumers only have to focus on The Body Shop products. On the other side, since other

brands are sold at a cosmetics store which consumers can find many brands; they feel

themselves overwhelmed and bored because of receiving a lot of information for different

brand names. Also, this decreases the motivation and the attention of the consumers.

Moreover, one of the advantages for The Body Shop is that they provide specific store design

at every point of sales all around the world. So, although the person is checking the store at

another city or country, they feel themselves familiar to the brand and know what to expect

from The Body Shop stores. “POP communications are not only concerned with POP

advertising. The store image, store design, the scent and the music in the store, the way the

products are placed on the shelves and the packaging of the products form an integral part of

POP communications. In short, POP communications involve all the aspects of the store and

the store environment that can signal something to customers about the quality, price or

product assortment, whether it is initiated by the retailer or by the manufacturer” (De

Pelsmacker et al, 2007).

“Increasingly, consumers decide which product or brand to buy while shopping. Since it is

important to communicate with the consumer at the time and the place where they take a

purchase decision, in-store communication techniques are increasingly important, and are

becoming increasingly sophisticated” (De Pelsmacker et al, 2007). As it has been mentioned

in the literature review, cosmetics products are experience goods which consumers cannot

make personal decisions beforehand (without experiencing/trying the product) due to lack of

information. Because of this reason, point of sales communication is especially more

important for cosmetics industry compared to the other industries. Consumer attention can be

attracted, brand name can be reminded, consumers can be informed and persuaded and lastly

the image can be created at the store. Figure 17 explains the objectives mentioned above.

Figure 17: Point-of-purchase communication objectives (De Pelsmacker et al, 2007).

5.6 Loyalty Aspects of the Cosmetics Products

Question 14 was asked to understand:

-Whether consumers are willing to change their cosmetics brands that they are loyal to

after being influenced by CSR activities of other cosmetics brands.

17 interviewees answered as “maybe”, 6 interviewees answered as “no” while 2 interviewees

answered as “yes”. Figure 18, gives an overview of the answers in relation to question 14.

Pop

communications

Attract

attention

Persuade

Create Image

Inform

Remind

Figure 18: Changing Loyal Cosmetics Brands

In relation to question 14: What kind of CSR activities will lead you to change the cosmetics brand that you are

loyal to?

The only two interviewees, who are willing to change their loyal brands, said that ecological

awareness, support and research to cancer, poverty, and education related subjects are the

CSR activities that they are very sensitive about. Therefore, they can change their loyal

brands if they are informed and persuaded about these issues.

On the other side, the interviewees who directly rejected to change their loyal brands stated

these arguments:

-“No, I don‟t think so. The first important factor for me is the quality of the product.

So, since I am satisfied with the brands that I am loyal to, I wouldn‟t consider

changing them.”

-“The brands that I am using are already socially responsible so I don‟t feel the need to

change them.”

Moreover, the majority of the interviewees gave the answer “maybe” while reasoning it with

some circumstances. The most given condition under which consumers are willing to change

their loyal brands, is that the socially responsible brand has to assure at least the same level of

quality. Interviewees stated that they want to test the product with samples and compare it to

the brands they are loyal to in order to be sure of the quality. Moreover, the word of mouth is

an important decision factor for interviewees while switching their brands. The experiences of

their friends, family members, and the shared knowledge through forums on the Internet were

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also stated as important factors. Furthermore, when interviewees are asked within question 5

about their purchase decision factors, CSR was not mentioned as one of the reasons.

Therefore, CSR activities are not stated as one of the main reasons to choose a cosmetics

brand. It is more observed as an important factor while creating and supporting the brand

image. This is the reason why, the majority of the interviewees answered as “maybe” and

“no” for question 14.

Furthermore, within question 15 it is aimed to learn:

-If the consumers are willing to pay a higher price for a socially responsible cosmetics

product.

Only two interviewees answered as “yes” and one interviewee said “no” and 22 interviewees

answered as “maybe” while basing their arguments on some conditions. Figure 19 shows the

responses of the interviewees.

Figure 19: Willingness to Pay Higher Price

In relation to question 15: Are you willing to pay a higher price for a socially responsible cosmetics product?

The interviewees, who are willing to pay a higher price for a socially responsible product,

would like to support some specific environmental and social acts. On the other side, the only

interviewee who responded she wouldn‟t pay a higher price explained that she only buys

cosmetic products just because she likes the products but not because of any socially

responsible reason. In addition, the majority of the interviewees expressed their ideas by

saying:

21

22

Willingness to Pay Higher Price

Yes

No

-“I believe that implementing socially responsible activities would make a huge cost

for the companies. Therefore it is normal to expect a higher price. Since my eyes are

very sensitive, I would consider paying a higher price for eye make-up products

because of my need of quality.”

-“I might pay a higher price but it depends on how high the price increase is compared

to the brands that I am already using.”

-“If my purchase is going to donate to a current cause/problem such as people

suffering from a flood, earthquake, hurricane, war, etc., I may pay higher amounts so

that I can contribute to a social act.”

5.6.1 Recommendation and Discouragement of Cosmetics Brands

Moreover, it is aimed to learn:

-People‟s attitude towards recommendation of socially responsible brands (question

16) and;

-Discouragement of brands, which have negative image in terms of social

responsibility (question 17).

As for question 16, the majority of the interviewees -22 people- stated that they would

recommend the socially responsible brand names to their friends and families. Moreover, it is

observed that consumers are more willing to advise and recommend to each other about the

purchase decisions during the shopping time. Some of the interviewees mentioned that they

have already recommended The Body Shop and Yves Rocher to their friends in terms of their

socially responsible behaviours and products. On the other hand, 3 people mentioned that they

would not make a recommendation in terms of the social responsibility aspects of a cosmetics

brand. The interviewees stated that they don‟t have much knowledge in terms of CSR

activities of cosmetics brands; therefore they would prefer not to make a recommendation.

Figure 20 shows consumers‟ willingness to recommend or discourage a cosmetics brand to

other people.

Figure 20: Recommendation of CSR-related Brands / Discouragement of Irresponsible Brands

In relation to question 16 and 17: Would you recommend a cosmetics brand to someone else because of its CSR

activities? / Would you advise someone else not to buy a cosmetics brand because of its negative image in terms

of social responsibility?

Question 17, was asked to learn if consumers would advise someone else not to buy a

cosmetics brand because of its negative image in terms of social responsibility. Surprisingly,

the evaluations of consumers about recommendation and discouragement of a brand was

equal when it is asked about their behaviour. 22 people stated that they would reflect their

discouragement about the brand to their friends and 3 people said that they wouldn‟t reflect

their discouragement. This is surprising because, as mentioned in the literature review, there

is a tendency of thinking that negative reinforcement is shared more often than positive brand

experiences. “For long it has been assumed, both by managers and academics, that negative as

compared with equally extreme positive information receives a higher weight in the formation

of judgements because negative information would be perceived as more useful or diagnostic

for classifying brands into evaluative categories. However, the negative effect may be

overstated. Even if consumers are motivated to process marketing communications, the same

information may lead to a completely different processing and communication result

depending on the type of consumer motivation or processing goal” (De Pelsmacker et al,

2007). As it has been mentioned in the literature review, how consumers process information

can depend on their involvement with a product or a brand. If a consumer has a strong

commitment to a brand, she is able to show more resistance to negative information and might

have difficulty remembering ethical attributes of a product.

22

3

Recommendation of CSR-related Brands

yesno

22

3

Discouragement of Irresponsible Brands

yes

no

5.6.2 Loyalty and CSR

The psychological commitment or relation between a consumer and a brand can be defined as

brand loyalty (De Pelsmacker et al, 2007). In addition, repeated purchase shouldn‟t be

confused with brand loyalty since continuous buying decisions are mostly given because of

several factors such as availability of limited choices or being the least expensive option

which have no links regarding emotional involvement to the brand. On the other side, “loyal

customers are more likely to pay attention to, understand, agree with, and respond positively

to messages of advertising for the brand to which they are loyal to” (Tellis, 2004). Therefore,

since CSR activities directly focus on and influence consumers‟ emotions, it can be assumed

as a way of creating emotional links with the brand. By doing so, it helps to retain loyal

customers. Based on the answers of the interviewees, it is observed that consumers feel

themselves better and different from other customers regarding their socially responsible

cosmetics consumption. In other words, CSR strengthens the link between the consumers and

the brand by making them feel different from others and making them feel part of a socially

responsible group of the society. As a result of this, brands can offer more than just the

product itself. They can offer an experience, which is the core of creating emotional links with

the consumers. Moreover by establishing social communities, cosmetics brands can achieve

improved customer involvement and brand loyalty. Those consumers who become a part of a

socially responsible community of a cosmetics brand will increase word-of-mouth which

leads to attracting new consumers. De Pelsmacker (2007) supports this idea by saying:

“Evidently, a strong brand implies that as many customers as possible are satisfied, committed

buyers. Not only will committed buyers repurchase the brand; they will also actively promote

your brand to others and function as real ambassadors.”

Moreover, cosmetics brands -through their CSR activities- can reflect themselves to the

responsible cosmetics consumers that they share the same values. Therefore, the socially

responsible image of the specific cosmetics company can be stated as a value that consumers

would feel proud of sharing and reflecting to the people around them. By doing so, consumers

can identify themselves with the brand and can use it as a status symbol -as being a

responsible person- within their social network. This may be another reason of how CSR can

be used as a factor of creating or retaining loyalty.

And lastly, CSR related product development activities may influence consumers in order to

stay as loyal customers or become loyal customers. For instance, when interviewees are asked

about their purchase decision factors, 17 consumers out of 25 gave quality as an answer.

Therefore offering fragrance free, non-allergic products that do not include unhealthy

chemical additives can be considered as product quality related CSR activities. In other

words, many consumers base their product loyalty decisions on CSR related quality

improvements of the cosmetics products.

5.7 Branding and Cosmetics Products

Branding provides many advantages for a company. “Strong brands help the consumer to

locate and identify products and evaluate their quality. It makes it easier for the consumer to

develop attitudes and expectations. A brand name serves as a shorthand label for a large

bundle of associations and the whole brand personality. Branding makes shopping more

efficient in that, it reduces the amount of decision-making time required and the perceived

risk of purchase, as a result of the fact that a brand promises a constant level of quality. It

gives consumers the ability to assess quickly the value and quality of new products by

association with a well-known brand name. Finally, branding increases the innovation

potential of manufacturers, thus leading to more variety and consumer choice.” (De

Pelsmacker et al, 2007). CSR activities can be used as a way of building and enhancing the

brand image for the cosmetics brands. Therefore, within CSR campaigns consumers associate

socially responsible activities with the brand name. With the help of repetition of CSR related

activities, consumer awareness can be achieved since creating brand awareness is essential in

the cosmetics industry where consumer involvement is very high. For valuable quality

products and brands such as cosmetics, design products, shoes, accessories, etc., aesthetic

reasons and quality are the main reasons of purchase because they symbolise the consumers‟

lifestyle. Therefore, the cosmetics brands should focus on creating and supporting brand

awareness (De Pelsmacker et al, 2007).

Brand awareness can be defined as creating associations with physical characteristics of a

brand such as the brand name, logo, package and style. Moreover, brand awareness can be

achieved in two ways, which are brand recall and brand recognition. Brand recall is harder to

achieve than the brand recognition. Less repetition and smaller investments are needed to

establish for brand recognition than the brand recall. As it has been mentioned before, point-

of-purchase decisions are important for cosmetics products especially for CSR related

purchase decisions. This is because the consumers at the point of purchase can easily

recognize CSR activities. Therefore packaging, displays, colours, logos and all the visual

aspects of the products are important to create brand recognition.

On the other side, in terms of CSR awareness both brand recognition and brand recall are

important. During the interviews, consumers mentioned that they prefer searching for the

cosmetics brands and becoming informed through the websites and the forums besides just

becoming informed at the cosmetics stores. This is how brand recall can be created and

strengthened through CSR related activities. “ Sometimes this dual brand awareness objective

is required, since for many product categories consumers limit their search activity based on

loyalty to a limited set of brands” (De Pelsmacker et al, 2007).

Repetition is also an important aspect for brand recall, which increases the strength and speed

of learning. The more consumers are exposed to information, the more likely they learn it.

The effect of the repetition is highly related to the importance of the information and the

reinforcement given. If the subject of the matter is very important and there is a great deal of

relevant reinforcement, less repetition of an advertising message is needed for consumers to

learn the message (Hawkins et al, 1992). On the other hand, although CSR is an important

subject, the concept is new for consumers. Therefore, high repetition is needed to make

consumers more aware and to set CSR as a standard in order to make it as a purchase decision

factor. Moreover, repetition is not only necessary to make consumers aware of CSR but also

important in order to link CSR activities with cosmetics brand names, in other words, to

achieve brand recall.

When consumers are loyal to some cosmetics brands, the only way to make the consumers to

change their loyal brands is to achieve brand recognition as well as brand recall. Making

consumers informed about CSR activities help to create emotional links between the

consumers and the brand. Therefore, CSR related activities can support brand recall and

become a part of the brand image in the long run while supporting the environment and the

society. “Every communication activity should take brand awareness into account. Even if

brand attitude or other objectives are more dominant, it will still be important to support brand

awareness. A brand can never have too much brand awareness. The effect of brand awareness

on brand choice and brand purchases is substantial. If two brands are equally valued, the

brand with the highest awareness will be purchased more often” (De Pelsmacker et al, 2007).

This point is related to the answers of question 14. Within question 14, the interviewees

mentioned many reasons under which situations they are willing to change the cosmetic

brands that they are loyal to. Interviewees expressed that only assuring the same quality and

the similar price range can be considered as reasons to switch their loyal brands. Therefore, if

a cosmetics company is valued in the same category in terms of quality and the price range,

the brand which has the highest brand awareness will be the one chosen. Besides protecting

the environment and the society, which is the prior mission for implementing CSR activities,

brand awareness can be increased through CSR as well.

To sum up; a “win-win-win” situation can be achieved:

- While increasing brand awareness and benefiting from increased purchases in terms

of the companies,

- While becoming more aware about the environmental and social issues therefore

carrying the need to be a part of the act in terms of the consumers

- And lastly increasing the well being of the environment and the society.

5.8 Conclusion

Within the consumer analysis, it is aimed to come up with answers towards the research

question: How do consumers interpret CSR in the cosmetics industry? In order to answer this

question, three sub questions are formulated to understand whether CSR is an important

purchase decision factor for cosmetics consumers, how influential the CSR activities are in

order to create brand awareness and how influential the routes of persuasion are to raise CSR

awareness for the cosmetics brands.

1. Is CSR an important purchase decision factor for cosmetics consumers?

Although consumers state that they find it important for cosmetics brands to be socially

responsible, they did not directly mention CSR as a purchase factor. The most important

purchase factors for consumers are the quality of the product, the price, the ingredients and

the duration. On the other hand, it can be said that the factor “ingredients” can be considered

as a CSR factor as well. Consumers define ingredients as fragrance free, as being not allergic

and not containing unhealthy chemical additives. These aspects are all part of environmental

and healthy CSR activities. For example, Clinique‟s main CSR activities consist of providing

fragrance free and on allergy-tested products. In addition, ingredients are very much linked to

the quality. By making the products fragrance free and without chemical additives, the quality

of the products increases as well in the mind of the consumers. Therefore, it can be said that

even though consumers do not consider CSR as a direct purchase factor, they actually do

value it and use it as complementary source in order to make their purchase decisions.

2. How influential are the CSR activities in order to create brand awareness?

Even though CSR is a not a purchase decision factor for cosmetics consumers, it does have a

significant influence on creating/supporting the brand image, which indirectly influences

consumers‟ purchase decisions. Moreover, strengthen brand awareness is closely associated

with the emotional links created between consumers and cosmetics brands. Therefore, CSR

activities of cosmetics companies, which highlight social and environmental problems/causes,

can be used as way to creating/enhancing emotional links with consumers.

Moreover, consumer interviews showed how a cosmetics company can create and increase

brand awareness through integrating CSR activities to its core business strategies. Therefore,

The Body Shop is stated as the cosmetics brand that carries the highest consumer awareness

in terms of CSR based on the answers of the consumer interviews. The consumer awareness

of the Body Shop, which is achieved through the CSR activities, can be shown as an answer

to this sub question. In the relation to the first sub question, creating brand awareness through

CSR leads consumers to consider CSR as an indirect purchase decision factor.

3. How influential is the peripheral route of persuasion to raise CSR awareness for the

cosmetics brands?

As it has been mentioned before, creating emotional links with consumers is significantly

important for cosmetics brands. Consumers give purchase decisions in order to feel

themselves happy, different and privileged. In relation to this, through consumer interviews it

is observed that CSR-focused consumption make them feel good citizens who differentiate

themselves through their socially responsible contributions. In the end, they feel themselves

as a part of a privileged group of the society in terms of their responsible consumption.

Therefore, the peripheral route of persuasion is a way to touch on those feelings while

persuading consumers. In relation to this, the peripheral route achieves this objective by using

different cues (stressing emotions) through advertisements instead of leading consumer to

cognitive information processes. During the consumer interviews, it is observed that

consumers are open to being informed about CSR activities of cosmetics brands. Moreover,

consumers want to use their own initiatives while being informed. Therefore, the peripheral

route is significantly important in order create brand awareness without putting too much

pressure on consumers. In order words, to attract consumer interest through emotional links is

the expected way of being persuaded by consumers, which can only achieved through the

peripheral route of persuasion in terms of CSR.

To sum up, based on the conclusions of the sub questions, the research question can be

answered by saying that consumers interpret CSR for the cosmetics brands not as a direct

purchase decision factor for them. Furthermore, consumers consider CSR activities as an

influential source to create their brand awareness while coming up with the purchase

decisions. Moreover, based on consumers‟ need in terms of creating emotional links with

cosmetics brands, the peripheral route of persuasion is decided as the right way to

communicate with the consumers.

6. Conclusion

The previous sections focused on the results of the company interview and the consumer

interview. Based on these results, answers were given on the two research questions. These

research questions were formulated to support of the central question, which is “How do

Corporate Social Responsibility activities affect consumers’ buying behaviour in the

cosmetics industry?” In this chapter the answer to the central question is presented. In

addition, the limitations of the research and the ideas for further research are discussed as

well.

6.1 Overall Conclusion

Based on the key findings of the consumer and company analyses, it can be stated that CSR

activities of the cosmetics brands do affect consumers‟ buying behaviour. There are several

ways in which these activities have an impact on consumers‟ purchase behaviour.

The most important purchase factors of the cosmetics consumers are the quality, the price, the

ingredients and the duration of the cosmetics products. The consumers did not mention CSR

as one of their purchase factors. However, it can be stated that even though they not directly

consider CSR as purchase factor, it does have a significant influence on their buying

decisions. The factors “ingredients” and “quality” are closely related with the CSR activities

of cosmetics companies (such as the use of biological/natural ingredients).

In addition to the purchase factors that are mentioned above, consumers choose certain

cosmetics brands based on the emotional links that they have towards these brands. These

emotional links can be further enhanced with the CSR activities of the cosmetics brands. The

cosmetics brands can use the peripheral route of persuasion to make consumers aware of their

CSR activities, in other words to create CSR awareness. By using peripheral cues in the

advertisements (for example the image of the endorsers, music and other affective elements),

consumers are able to create emotional links with the CSR activities. This will lead to

emotional links with the brands as well. As result, both CSR awareness and brand awareness

are created.

Moreover, it is observed that consumers had difficulty in understanding the meaning and the

value of CSR. Based on this, the activities of the cosmetic companies help consumers educate

about the value of CSR. As a result, consumers become more involved in the CSR activities

and they feel satisfied in buying social responsible cosmetics products since they are able to

contribute to the society and the environment. They can consider themselves as good citizens.

In this way, emotional links with the cosmetics brands are created as well.

Furthermore, consumers are informed about CSR activities (and lack of CSR activities) within

the cosmetics industry through mass media and NGOs. These information channels help

consumers to understand about the necessity of being socially responsible. After being

informed and becoming aware of CSR activities, the consumers demand increases. Therefore,

even though consumers do not directly consider CSR as a purchase decision factor, it can be

stated that consumers want to see more social responsible acts from the cosmetics brands.

They recommend socially responsible brands to their friends and families and discourage

irresponsible brands. As a result, CSR can be considered an indirect purchase decision factor.

On the other hand, it is necessary for cosmetics brands to continuously communicate their

CSR activities to their consumers. Before purchasing a socially responsible brand, consumers

want to be persuaded that the CSR activities are not just a marketing tool. For this reason, it is

important that cosmetics brands are showing their CSR commitment on a long-term basis.

6.2 Limitations

There are several limitations with regards to this thesis. A significant limitation was collecting

more consumer behaviour data through more interviews. There were some difficulties finding

participants for the consumer interviews. This is due to the fact that in-dept interviews take

longer time to conduct than quantitative surveys. The cosmetics consumers that participated in

the interviews have chosen to do so, because they were able to make time for it in a short-term

period. However, it became painfully clear that many consumers did want to take part of the

interview because they did want to make time for it. After being told about the estimated time

(maximum of 30 minutes) to conduct the interview, they were not interested enough to

participate and were not willing to schedule an appointment. For this reason, no more than 25

interviews were conducted. On the other hand, it must be said that 25 consumer interviews

were enough to collect sufficient and valuable data in order to conduct the research in terms

of consumers‟ purchase behaviour.

In addition, the number of questions was limited to thirteen main questions regarding CSR.

Since each of those questions required an elaborated answer from the interviewees, it was not

possible to ask more questions. Asking more than thirteen questions prolonged the duration of

the interview, which was not attractive for finding interviewees. This means that more

questions, in relation to CSR and consumer behaviour, were not asked.

Furthermore, it had to be said that some of the answers of the interviewees were not valid or

not taken into consideration, since they were not willing to elaborate on their answers.

Without any explanation to some questions (e.g. Q10: “Do you find CSR important? Please

elaborate”), it is hard to analyse consumers‟ perceptions on CSR and how it affects their

buying behaviour.

Also due to the location of the researchers, the interviews were conducted in Brussels. Since,

in-depth interviews require that the researchers personally meet with the interviewees; it was

hard to conduct interviews outside of Brussels because of the time restrictions. In addition,

because of the difficulty in finding participants who were willing to participate for the

consumer interviews, several of the interviewees were found through the networks of the

researchers. For this reasons, a large group of the cosmetics consumers are students.

Moreover, it was not possible to receive CSR statistics from cosmetic brands (sales

results/figures) in order to measure the actual impact of CSR on consumer companies. The

cosmetics brands were not willing to share that information due to the sensitivity of the

documents. Therefore, the analyses of this paper primarily focused on the data collected

through the consumer interviews and the company interview in order to answer the research

questions.

6.3 Further Research

As mentioned before, this paper aims to understand how CSR activities of cosmetics brands

affect consumer purchase behaviour. The majority of the participants of the consumer

interviews are in the age range of 18 to 25 years old and primarily students. Even though

cosmetics products are aimed to reach consumers within a broad age range, it can be

interesting to conduct a consumer behaviour research focusing on “working cosmetics

consumers”, in order words focusing on employees (for example, employees within the age

range of 30 to 50 years old). This group of cosmetics consumers have a higher income than

students. In addition, it is observed from the consumer interviews that employees often

purchase prestige cosmetics brands, such Estee Lauder, Dior and Chanel, than mass-market

cosmetics brands. It can be assumed that they buy the prestige brands not only because of the

quality of the products, but also because of the emotional links they have towards the brands.

Furthermore, the interviews showed that consumers between 26 and 40 years old have heard

about social responsibility with the cosmetics industry for a longer period of time compared

with younger consumers and they were able to give more examples of CSR activities within

the cosmetics industry. Therefore, further research can be done on: how CSR affect

consumers‟ buying behaviour, how cosmetics brands can use CSR to create emotional links

with these consumers and support the brand image, and how these consumers can be

persuaded through CSR to change their loyal brands.

Also, further research can be done on how to measure CSR impact in the cosmetics industry

based on CSR statistics from cosmetics companies. By analysing the CSR statistics, the affect

of CSR on consumer purchases can be measured in order to understand how significant CSR

activities are for the sales of cosmetics products. An example of statistics can be the sales

results of cosmetics products after conducting a CSR campaign.

Furthermore, another interesting topic to further analyse is the industry initiatives in terms of

CSR. As mentioned by Isabel Martin, cosmetics companies have their own CSR activities and

use these CSR activities as way of creating differentiation and competitive advantage.

However, by bundling CSR efforts and creating industry CSR initiatives, the impact will be

greater on the environment and the society. In addition, during the consumer interviews it is

observed that consumers wanted to be persuaded by cosmetics brands that they are fully

committed to CSR in order to support the environmental and society and, not just use CSR as

“green washing”. Therefore, the possibilities of CSR industry initiatives might increase the

overall credibility of the cosmetics industry in terms of CSR. This will lead to higher

credibility of the CSR initiatives of the individual cosmetics brands as well.

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