Tingchiliu 2014

Journal of Services Marketing
The impact of corporate social responsibility (CSR) performance and perceived brand quality on customer-
based brand preference
Matthew Tingchi Liu, Ipkin Anthony Wong, Guicheng Shi, Rongwei Chu, James L. Brock,
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Matthew Tingchi Liu, Ipkin Anthony Wong, Guicheng Shi, Rongwei Chu, James L. Brock, (2014) "The impact of corporate
social responsibility (CSR) performance and perceived brand quality on customer-based brand preference", Journal of Services
Marketing, Vol. 28 Issue: 3, pp.181-194, https://doi.org/10.1108/JSM-09-2012-0171
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The impact of corporate social responsibility
(CSR) performance and perceived brand
quality on customer-based brand preference
Matthew Tingchi Liu
Marketing Department, FBA, University of Macau, Taipa, Macau
Ipkin Anthony Wong
Institute for Tourism Studies, Colina de Mong-Ha, Macau
Guicheng Shi
Marketing Department, Macau University of Science and Technology, Cotai, Macau
Rongwei Chu
Management School, Fudan University, Shanghai, China, and
James L. Brock
School of Business, Pacific Lutheran University, Tacoma, Washington, USA
Abstract
Purpose – This paper aims to investigate how corporate social responsibility (CSR) performance (i.e. to the environment, society and stakeholders)
and perceived brand quality influence brand preference. The mediating effect of perceived brand quality on the relationship between CSR
performance and brand preference is also studied.
Design/methodology/approach – In 2011, 243 valid responses to questionnaire surveys were collected from a convenience sample in China.
Regression analyses were used to test the hypotheses.
Findings – Customers’ brand preference can be enhanced by CSR performance. Performance in each of the three CSR domains (i.e. environment,
society and stakeholders) positively impacts brand preference, although to different degrees. The impact of CSR on stakeholders has the strongest
influence on Chinese customers’ brand preference among the three CSR domains. Perceived brand quality was found to be a mediator of the
relationship between CSR performance and brand preference.
Research limitations/implications – This research studies the relationship between CSR performance and brand preference. Results show CSR
performance is not the strongest predictor of branding outcomes, its explanatory power is comparatively weaker than that of perceived brand quality.
Additionally, we found a mediating effect of perceived brand quality on the relationship between CSR performance and brand preference.
Practical implications – Brands can be more attractive to Chinese consumers when brands take appropriate investments in CSR activities. A
socially responsible brand is not guaranteed to yield a competitive advantage. Instead a competitive advantage will more likely result through the
employment of the appropriate CSR strategies, with a focus on stakeholders’ interests.
Originality/value – The current research contributes to the literature by finding that not all CSR activities are equally effective. Customers in emerging
markets still appear to be focused more on the quality of brands and, to some extent, stakeholder CSR practice, as these provide direct benefits to customers.
Findings of this study also support the notion that Chinese consumers are beginning to use CSR information to evaluate brands.
Keywords Hotel, Brand preference, CSR performance, Perceived brand quality
Paper type Research paper
An executive summary for managers and executive from executives’ idiosyncratic philanthropic activities to
readers can be found at the end of this issue. widespread acceptance as a valuable component of
stakeholder management and has been incorporated into
1. Introduction strategic performance models (Kolodinsky et al., 2010).
Engaging in CSR behaviors is prevalent across various types of
Corporate social responsibility (CSR) has been a subject of businesses in different industries and countries (Singh et al.,
study in academia for more than six decades. CSR has evolved 2008). Other scholars have identified CSR as a group of
factors that influence brand building (Chomvilailuk and
Butcher, 2010; Hoeffler and Keller, 2002; Roll, 2006). From
The current issue and full text archive of this journal is available at
an academic perspective, the value of a brand name is defined
www.emeraldinsight.com/0887-6045.htm
as its brand equity. Yoo et al. (2000) determined that positive
brand associations, perceived quality and brand loyalty all

28/3 (2014) 181–194 Received 17 September 2012
© Emerald Group Publishing Limited [ISSN 0887-6045] Revised 28 December 2012
[DOI 10.1108/JSM-09-2012-0171] Accepted 7 February 2013
181
CSR and perceived brand quality Journal of Services Marketing
Matthew Tingchi Liu et al. Volume 28 · Number 3 · 2014 · 181–194
contribute to growth of brand equity. Corporations purchase (Taylor, 2001; Corte et al., 2010). Brand preference
increasingly integrate CSR programs into their business is widely used to measure the effect of brand equity (c.f.
strategies in efforts to generate branding benefits (Hoeffler and Cobb-Walgren et al., 1995; Yoo et al., 2000) and represents
Keller, 2002). Kolodinsky et al. (2010) found that consumers’ intention to choose and purchase a brand (Yoo et al.,
positive attitudes toward corporate social activity could affect 2000)[2]. Integrating CSR programs as a component in building
their perceptions and behaviors. Studies examining the link brand equity has become an important strategy for many
between CSR and marketing results have recently emerged in businesses (Singh et al., 2008). However, there is limited research
the literature; however, some research gaps still need to be that links CSR activities and brand building (Chomvilailuk and
bridged. First, current understanding of CSR’s impacts on Butcher, 2010). The following is a summary of research focusing
branding and customer responses is limited (Sen and on CSR activities. Chomvilailuk and Butcher (2010) performed
Bhattacharya, 2001; Singh et al., 2008). For example, so far, an experiment with 219 customers in a Thai banking setting;
brand quality is still a very important issue discussed by many findings showed that CSR programs made modest
papers in top marketing journals (Bharadwaj et al., 2011; enhancements on brand preference. In another study, Creyer
Meyvis et al., 2012), as is brand preference (Heilman et al., and Ross (1997) concluded that mismanagement of CSR
2000; Liu and Smeesters, 2010). Brand preference was almost programs and activities can damage brand reputation and that
identical with purchase intention (Banks, 1950), and brand the company may be evaluated negatively by all stakeholders.
preference features in all of the major texts on brands and

Performance in certain CSR domains was found to have a
brand strategy (Alamro and Rowley, 2011). However, studies
positive influence on brand image; this study took place in the
of the relationships among CSR, brand quality and brand
UK and Spain (Singh et al., 2008). Similarly, Hoeffler and Keller
preference are rare. Second, despite increased research on the
(2002) found that sound and well-executed CSR programs could
various effects of CSR, the question of whether CSR is
enhance customer-based brand equity by influencing users’
worthwhile for the service provider still remains to be
judgments and perceptions. In a similar study, Sen and
addressed (Eisingerich et al., 2011). Results that address this
question are also rare in the service arena[1]. Mandhachitara Bhattacharya (2001) measured consumers’ responses and
and Poolthong (2011) indicated CSR has a significantly strong perceptions and found a positive relationship between a
and positive association with attitudinal loyalty. Perceived company’s CSR activities and consumer evaluations of the
service quality mediated the relationship between CSR and company, as well as CSR’s contingent effects on customer
repeat patronage intentions (behavioral loyalty). Direct effects purchase intentions and product evaluation. Another study
were reported between perceived service quality and both using secondary data found that CSR contributed to
attitudinal and behavioral loyalty. Mattila and Hanks (2012) customer satisfaction and financial success (Luo and
investigated antecedents to participation in CSR programs Bhattacharya, 2006). In support of the previous study, Tian
and found status-seeking consumers exhibited higher levels of et al. (2011) reported that Chinese consumers’ purchase
prosocial behaviors when the cause was a national one intentions are positively influenced by CSR performance.
(compared to a local cause), particularly when the individual Another benefit of CSR initiatives is the ability companies
felt empathy toward the larger cause. Eisingerich et al. (2011) have to differentiate their products and services by creating
demonstrated that CSR shields firms from negative a more positive brand image, which helps safeguard the
information about CSR practices but not information related firm’s reputation (Hsu, 2012). On the other hand, CSR’s
to firms’ core service offerings. Because the literature is still impact on customers’ purchase intentions decreased
limited, some questions into the role of CSR influence in the considerably when there were problems with the product or
service industry need to be answered. Third, CSR has emerged its performance (Auger et al., 2008). In sum, although with
as an inescapable priority for business leaders in every country contradicting results, it is generally suggested that
(Porter and Kramer, 2006). Some studies focus on Chinese customers respond positively toward positive CSR practices
consumers and CSR (Ramasamy and Yeung, 2009; Xu and under particular circumstances and react negatively to the
Yang, 2010; Tian et al., 2011), but the following questions lack of CSR practices or to negative or ineffective CSR
remain unanswered: How Chinese consumers in the service practices (Brown and Dacin, 1997; Sen and Bhattacharya,
industry look at CSR? Does CSR performance really play a 2001; Ricks, 2005).
significant role in the service sector in China? Are all CSR With respect to CSR classifications, Carroll (1979) delineated
activities equally effective in the Chinese service sector? As a the CSR construct by stating “the social responsibility of business
result of the limited research, this study focuses on examining encompasses the economic, legal, ethical, and discretionary
whether customers’ perception of service providers’ CSR (philanthropic) expectations that society has of organizations”.
performance influences customer-based brand preference. This definition has become fairly widely accepted (Mohr et al.,
2001; Mandhachitara and Poolthong, 2011) and emphasizes
four principal types of responsibilities: economic, legal, ethical
2. Literature review and hypothesis
and philanthropic (Matten and Crane, 2005). Maignan et al.
development (1999) defined social responsibility as the degree to which
2.1 CSR performance and brand preference firms assume economic, legal, ethical and discretionary
Brand preference has long been recognized as virtually responsibilities toward their stakeholders. CSR activities can
identical to purchase intention, and preference for brands was take many forms, such as diversity initiatives, recycling
a good predictor of purchase (Banks, 1950). Brand preference programs, the use of green materials, support of community
is still regularly applied as a symbolic predictor to consumers’ events and donations of money to charitable causes (Sen and
182
Bhattacharya, 2001). Later, Mohr et al. (2001) clearly divided government legislative policies, and business leaders desire to see
CSR into two general classifications: national governments taking more active and leading roles to
1 The first category discusses CSR in relation to the various encourage and even force greater environmental responsibility
stakeholders of the organization (e.g. owners, customers, (Dummett, 2006). Further, Tse and Ng (2003) summarized that
employees and the community). a company’s strong philosophy of developing and operating
2 The second classification is based on Kotler’s (2008) environmentally sensitive properties is a key contributor to its
societal marketing concept. continued success, despite external challenges (e.g. Asian
economic crises and competition). With supportive evidence
Mohr et al.’s (2001) work became a significant reference[3] in
from the literature, implementing environmentally focused CSR
subsequent research related to CSR definition/classification
programs should yield more favorable brand preference by
(Maignan and Ferrell, 2004; Maloni and Brown, 2006;
customers. As a result we hypothesize:
Godfrey and Hatch, 2007; Pomering and Dolnicar, 2009;
Mandhachitara and Poolthong, 2011). In addition to these H1. CSR related to the environment (environmental CSR)
two traditional major categories, environmental CSR was the positively impacts brand preference.
primary focus of many studies (Mohr and Webb, 2005;
Williamson et al., 2006; Dahlsrud, 2008; Pedersen, 2010) in CSR with respect to society refers to activity that contributes
the past decade due to its significant visibility and feasibility in to society’s well-being (Turker, 2009). Mohr et al. (2001)
business operations. Cheung et al. (2009) indicated that determined that companies face increasing pressure both to
implementing environmental CSR could benefit not only maintain profitability and behave in socially responsible ways.
manufacturers but service providers with internal drivers (e.g. Similarly, Murray and Vogel (1997) claimed that corporate
to meet corporate environmental policy or the parent CSR activities that address social issues could predispose
company’s environmental guidelines) or external drivers (e.g. people to a more positive impression of the business. In support,
to communicate a “green” corporate image and thus enhance an experiment using 293 undergraduate students concluded that
reputation). Marin and Ruiz (2007) pointed out successful corporate philanthropy activities increased corporate brand
environmental CSR performance can enhance a service association (Ricks, 2005). Similarly, Singh et al. (2008)
provider’s reputation. Furthermore and practically speaking, demonstrated that CSR behaviors intended to enhance social
environmental CSR is easy to understand and highly interests are positively related to brand image in a study involving
recognized by general consumers and media (Rahbar and several famous brands and a diversified group of citizens.
Wahid, 2011). Based on the existing evidence and the fact that Holcomb et al.’s (2007) study used content analysis to identify
more focus will be put on protecting and sustaining the global and describe social responsibility patterns in Web sites, annual
environment, this study decided to list environmental CSR as reports and CSR reports for the top ten hotel companies as listed
the third domain. CSR activities with respect to the in Hotels magazine. The findings reveal that 80 per cent of the
environment include such categories as pollution hotel companies analyzed reported socially responsible activities
prevention, energy conservation and green production/service. relating to some form of charitable donations and promotion of
Rather obviously, these are distinct from CSR activities well-being in society. After the 2004 Indian Ocean tsunami in
with respect to society that include philanthropy, public Phuket, Thailand, many firms actively engaged in various
welfare contributions, culture promotion and sustainable activities to restore local communities through efforts that
development. Similarly, CSR activities with respect to included raising funds, providing support for rebuilding
stakeholders include such areas as returns to investors, homes and schools, sponsoring orphans and making
treatment of employees, community outreach and sympathetic and encouraging public statements. Those
development, monitoring and influencing supplier behaviors sincere and generous outreach activities significantly
and, generally, the organization’s obligations to all enhanced firms’ brand image and consumers’ evaluation
stakeholders – and not just shareholders. Across all three (Henderson, 2007). Moreover, there is considerable
types, the core value of CSR is not acting just for profit but similarity between the concepts of corporate social
doing what is right, just and fair. responsibility and corporate reputation (Hillenbrand and
The influence of environmental CSR on consumer Money, 2007); perceived positive corporate reputation of
perceptions and intentions is widely recognized by previous
the service provider has a significant positive impact on
studies. Laroche et al. (2001) highlighted the strong purchase
brand preference (Alamro and Rowley, 2011). As these
intention by consumers seeking a more ecologically friendly
previous studies relate to the possible link between societal
lifestyle toward brands associated with environmentally friendly
CSR performance and brand preference, the following is
practices. Manufacturers who undertook an environmental CSR
hypothesized:
initiative experienced a significantly positive effect on consumers’
purchase intentions and company evaluation (Mohr and Webb, H2. CSR related to society (societal CSR) positively
2005). Similarly, Marin and Ruiz (2007) found a direct impacts brand preference.
association between a customer’s attraction or liking for a bank
and the bank’s reputation for caring about CSR-related causes, Again, CSR includes a company’s responsibility to act in ways
such as environmental protection. In support of the relation that affect stakeholders positively and that go beyond its
between CSR and customer satisfaction, a company’s green economic interest (Turker, 2009). The importance of CSR to
(environmentally friendly) brand image was found to be stakeholders has previously been studied. Mohr et al. (2001),
positively associated with consumers’ satisfaction (Chen, 2010). as mentioned, listed CSR to stakeholders as one of the two
The dominant driver for environmental CSR activity is major CSR types. CSR activities have the potential to
183
strengthen the relationship between firms and stakeholders 2010), and brand preference seems to be intertwined with
(Peloza and Shang, 2011). Communication of CSR concerns perceptions of brand quality (Liu and Smeesters, 2010).
and activities not only creates awareness for CSR and support Assessed that perceived quality influences brand loyalty and
for an image or a brand, it is also a way of creating a bond brand image related to hotels, the industry selected for this
between the company and its stakeholders (Maignan and study. With respect to customer responses toward product
Ferrell, 2004). Creyer and Ross (1997) found that corporate quality and CSR activities, early studies found that the societal
ethical behaviors (mainly related to stakeholders) were favored impact on customer responses became weak when the
by customers and considered an important factor when influence of product quality was introduced. Folkes and
making a purchase decision. The study demonstrated that Kamins (1999) stated that CSR’s effectiveness on a firm’s
consumers’ demand may be relatively more price inelastic for
evaluation significantly decreased if product quality was found
products produced by firms involved in ethical CSR actions.
to be inferior. Moreover, Brown and Dacin (1997) discovered
Rodriguez and Cruz (2007) examined the impact of CSR on
that customers’ corporate ability associations (customers’
companies’ return on assets performance and found a positive
cognitive associations regarding corporate expertise in
impact when stakeholders such as managers and executives were
studied. Stakeholders aware of a company’s CSR activities producing and supplying outputs) were more influential than
reacted positively by purchasing its products, but also had more CSR associations (company’s status and activities related to its
perceived societal obligations) on company evaluation and
positive perceptions about the company’s employment practices

and investment behaviors (Sen et al., 2006). Clarkson (1995) product perceptions. The mediating effects of brand-related
indicated corporate social performance and stakeholders’ elements are intensively studied in recent CSR studies. For
satisfaction can be analyzed and evaluated effectively by example, Marin et al. (2009) indicated that CSR activities
evaluating “management of a corporation’s relationships with its are mediated by company evaluation, identity attractiveness
stakeholders” (which is close to our definition about CSR to and identification. Hsu (2012) concluded that
stakeholders), and customer satisfaction and reference policyholders’ satisfaction for services offered by life
groups’[4] recognition to service provider both have a positive insurance companies partially mediates the influence of
impact on brand preference (Alamro and Rowley, 2011). CSR on corporate reputation. Additionally, the relationship
More recently, Torres et al. (2012) concluded that CSR to between CSR and brand performance was found to be
various stakeholders has a positive effect on global brand partially mediated by corporate reputation (Lai et al.,
equity. This particular study used panel data composed of 2010). Similarly, He and Li (2011) found a mediating effect
57 global brands from ten countries. In addition, the of brand identification between the relationship of CSR
authors concluded that global brands that respect local activities and service quality. To further investigate the role
communities’ social responsibility values obtain strong of perceived brand quality in the current study, we
positive benefits through the generation of brand equity, proposed the following hypotheses, each of which is related
enhancing the positive effects of CSR toward stakeholders
to one of the CSR domains. Based on the proposed
such as customers. In the current study, we summarized
hypotheses, a research framework is shown in Figure 1.
studies from Clarkson (1995), Mohr et al. (2001), Turker
(2009), and Torres et al. (2012), and applied their ideas to H4a. Perceived brand quality plays a positive mediating role
focus on the integrated domain (with several types of between the relationship of CSR related to the
stakeholders, e.g. government, final customers, employees, environment and brand preference.
suppliers and shareholders). In sum, there is strong
evidence from the literature that there is a positive H4b. Perceived brand quality plays a positive mediating role
relationship between CSR to stakeholders and customers’ between the relationship of CSR related to society and
brand preference. The following is hypothesized: brand preference.
H3. CSR related to stakeholders positively impacts brand H4c. Perceived brand quality plays a positive mediating role
preference. between the relationship of CSR related to stakeholders
and brand preference.
2.2 Perceived brand quality
Perceived brand quality is one of the most important elements
that influence consumer preference in most industries Figure 1 Research framework
(Kayaman and Arasli, 2007; Taylor, 2001). Specifically brand
quality was applied in some service industry-related CSR CSR to
studies recently (Chomvilailuk and Butcher, 2010; Boisvert environment
and Ashill, 2011). To study the relative strength of CSR’s H4a H1

impact on brand preference, we included perceived brand
CSR to H2
quality as another predictor. Zeithaml (1988) defined society
Brand
CSR Performance
perceived brand quality as the “consumer’s judgment about a H4b Perceived
Preference
Brand Quality
product’s overall excellence or superiority” and it is
considered a component of brand value. Perceived brand H4c H3
CSR to
quality was reported as the primary influential factor in stakeholders
customer-based brand evaluation (Chomvilailuk and Butcher,
184
3. Methodology total variance ⫽ 63.349 per cent; four items were kept with
one item deleted due to low factor loading) are also
3.1 Measurements satisfactory and related to those reported by Chomvilailuk and
The measures used in this study were adopted from Butcher (2010) (␣ ⫽ 0.86 for perceived brand quality; ␣ ⫽
well-established scales. With regard to CSR, the literature
0.87 for brand preference). Factor loadings of all items are
acknowledges that the construct commonly pertains to aspects
acceptable (⬎ 0.6) based on Hair et al. (1998).
relating to the environment, society and stakeholders (Mohr
et al., 2001; Kotler, 2008; Dahlsrud, 2008; Matten and Crane,
2005; Pedersen, 2010; Turker, 2009). These three major 3.3 Samples and procedures
domains of CSR play significant roles in the hotel industry This study focuses on the hotel industry, one of the most
worldwide. In China, the government used these three CSR common and typical service providers in China. The Chinese
domains in the “National Standards for Green Hotel”, the hotel industry has developed rapidly over the past three
official rating guidelines, to evaluate hotels’ CSR performance decades, largely as a result of it being one of the industries
(China Hotel Association, 2010). We adopted a six-item scale initially opened to foreign investments in the 1980s.
of environmental CSR concerns from Holcomb et al. (2007) Consequently, it has become a highly commercialized,
and “National Standards for Green Hotel (2010)”. market-oriented and internationalized industry (China Hotel
Additionally, we used a four-item measure of societal CSR Association, 2010). CSR efforts are major concerns for hotels
concerns from Clarkson (1995) and Holcomb et al. (2007) and have been implemented by many hotel operators in
and an eight-item measure of CSR to stakeholders concern China. For example, InterContinental Hotels Group (IHG)’s
from Turker (2009) and Clarkson (1995). Each item was programs include greater efforts for energy efficiency, water
assessed on a 7-point Likert-type scale ranging from 1 conservation, climate change awareness campaigns and
(strongly disagree) to 7 (strongly agree). To guarantee the face procuring coffee (one of the most consumed products at their
validity, a pilot study was conducted using a Chinese sample hotels) from suppliers practicing sustainable operations. As a
prior to administering the formal survey. result IHG (China) won the Eco-lodging Award at the China
Brand preference is defined as the relative preference for Hotel Investment Summit. Similarly, Marriott hotels practice
choosing and using the brand and operationalized as a the “Green Marriott program” for environmentally conscious
five-item scale adapted from Yoo et al.’s (2000) overall brand hotel operations to conserve and protect the environment and
equity scale. Perceived brand quality was adapted and resources[5]. Marriott hotels also have pledged to dedicate a
extended to a five-item measure from the perceived quality day to helping others during the third week of May since 2000.
scale reported by Erdem et al. (2006). The current study This initiative involves 15 Marriott lodging brands and
improves the wording of each item to better suit the hotel/ businesses (Lee and Park, 2009)[6]. The leading hotel brand
hospitality context. Each item was assessed on a 7-point in Asia – Banyan Tree Hotels and Resorts – effectively
Likert-type scale ranging from 1 (strongly disagree) to 7 differentiates itself in the market and enhances brand equity
(strongly agree). The questionnaire concluded with through incorporating significant CSR programs and featuring
demographic questions. The scale items used in this study are them in their marketing strategies (Roll, 2006).
presented in Table I. To rule out possible bias (e.g. concerns over price or
convenience), the current study focused on independent
3.2 Scale assessment travelers (non-group visitors) who chose to patronize locally
For each variable, Bartlett’s test of sphericity was significant managed three-star or four-star hotels. These parameters were
(p ⬍ 0.001), which indicates the presence of non-zero chosen for following reasons:
correlation among the items, and the overall measure of ● Group visitors’ hotel selection may be limited by the
sampling adequacy was above the cutoff value of 0.5. These offerings provided by travel agencies that organize trip
results satisfied the fundamental requirements for factor package and details, so this segment was eliminated from
analysis (Hair et al., 1998). Furthermore, all the estimates for consideration.
the average variance extracted (AVE) were greater than 0.50 ● Individual travelers who choose low-cost hotels or
(Table II), in support of convergent validity. Moreover, the lower-rated hotels (or restaurants) are mostly price-driven
AVE for each construct was greater than the squared customers (Law et al., 2008); in this case, it is difficult to
correlations between constructs, thereby satisfying the investigate how much they care about CSR if price is their
discriminant validity criterion (Fornell and Larcker, 1981; sole or primary criterion. Most Chinese are poor (GDP per
Eisingerich et al., 2011). The face validity values of the three capita ⫽ US$5,430) (World Bank, 2011) and 50.05 per
CSR domains (all ⬎ 0.80), brand preference (0.82) and cent Chinese (about 670 million) earn less than US$3,600
perceived brand quality (0.85), are also acceptable. annually (National Bureau of Statistics of China, 2011);
As shown in Table I, the reliability assessment and we avoided focusing on this group because of its
confirmative factor analysis were significant. Three factors price-driven orientation.
were extracted from the 18 items of CSR performance. ● People who are able to stay at five-star hotels are generally
Cronbach’s alpha (␣) for the three factors was satisfactory very wealthy (and can afford any hotel) or are traveling on
(0.89, 0.94 and 0.92, respectively) and related to those business (with accommodation reimbursement) so luxury
reported by Turker (2009). Regarding CSR to stakeholders, or convenience may be their top priority for choosing
only six items were kept and two items were deleted due to low hotels without thinking too much about CSR.
factor loading. Perceived brand quality (␣ ⫽ 0.85, total ● Besides, wealthy people comprise a very small portion (0.04
variance ⫽ 68.803 per cent) and brand preference (␣ ⫽ 0.85, per cent) of the total Chinese population[7] (Capgemini and
185
Table I Factor analysis and reliability test

Factor Cronbach’s
Factors Measurements loading Eigenvalue ␣
CSR to environment This hotel promotes environment protection and green consumption concepts to 0.77
customers and participates in related activities
This hotel has environmental-friendly design to protect natural landscapes, places of 0.77
cultural and historical interest
The hotel implements special programs to reduce consumption, e.g. decrease usage of 0.71 1.07 0.89
disposable goods
This hotel implements special programs and uses relevant facilities to improve public 0.74
security, fire control and food safety
This hotel implements special programs and uses relevant facilities to save and use 0.75
energy efficiently, and utilizes renewable energy, such as solar and wind energy
This hotel implements special programs and uses relevant facilities to reduce polluted 0.74
water, noise and rubbish emissions as well as white pollutions
CSR to society This hotel supports nongovernmental organizations working in problematic areas 0.85
This hotel contributes to campaigns and projects that promote the well-being of the 0.91 1.04 0.94
society
This hotel makes investment to create a better life for future generations 0.90
This hotel targets sustainable growth which considers future generations 0.90
CSR to stakeholdersa This hotel respects consumer rights beyond the legal requirements 0.72
This hotel provides full and accurate information about its products/services to customers 0.76
Customers’ satisfaction is highly important for this hotel 0.75
This hotel provides a healthy and safe working environment for employees 0.83 1.05 0.92
This hotel complies with legal regulations completely and promptly 0.79
Pornography, gambling and drug abuse are prohibited in this hotel 0.70
Perceived brand The quality of services at this hotel is very high 0.71
quality In terms of overall quality, I’d rate this hotel as an exceptional good one for the industry 0.76 1.15 0.85
I think this hotel has far better quality than other hotels 0.79
This hotel’s performance is first class 0.73
Brand preferencea It makes sense to always choose this hotel, even if other hotels have slightly better services 0.70
Even if another hotel has a better range of services as this hotel, I strongly prefer to use 0.88
this one
If there is another hotel offering more convenient services, I still prefer to choose 0.80 1.21 0.85
this hotel
This hotel would easily be my first choice for hotel services 0.68
I have a very strong preference for this hotel 0.64
Notes: a Regarding “CSR to stakeholders”, only six items were kept and two items were deleted due to low factor loading. As to “brand preference”,
four items were kept, with one item deleted due to low factor loading
Table II Squared correlation and AVE improving the education and loyalty of their employees (Luo
1 2 3 4 5 and Bhattacharya, 2006).
CSR to environment 0.55 In addition, the rating and scale of hotels are considered
CSR to society 0.41 0.80 external factors that influence hotels’ branding or CSR
CSR to stakeholders 0.40 0.48 0.56 performance. Based on reasons mentioned, this study mainly
Perceived brand quality 0.35 0.17 0.30 0.62 focuses on individual travelers staying in locally run
Brand preference 0.20 0.24 0.25 0.39 0.73 middle-level hotels with a formal CSR program in place.
Notes: The squared correlation and AVE between constructs is To better represent the population of Chinese hotel
provided off-diagonally; constructs’ average variance extracted (AVE) customers, data were collected from hotels located in five
can be read diagonally Chinese cities: Beijing, Shanghai, Guangzhou, Chongqing
and Kunming. These cities cover a wide socio-cultural
Merrill Lynch Global Wealth Management, 2011). diversity of the nation and should help to generalize findings of
Choosing five-star hotel guests for the study would not reflect the study to the rapidly growing population of relatively
the Chinese reality and would have weakened the affluent Chinese. Convenience sampling was employed. In
generalizability of the study. each city, we randomly chose one hotel from a list in the
● Larger firms could invest more in pursuing their CSR yellow pages. Then we checked whether the selected hotel had
objectives such as CSR-consistent product innovation and a CSR program in place by browsing its Web site and
186
inquiring by phone. If the hotel had a formal CSR program 4. Results

indeed, it was retained; if not, we drew from the lot again until
Regression analyses were used to test the impact of CSR
we found a qualified hotel. The respondents were interviewed performance and perceived brand quality on brand
when waiting for check-out in the hotels selected for the study. preference. Results indicate that the overall model for each
In this environment, respondents had sufficient time to regressed equation has a good fit with a highly significant F
respond to the questionnaires patiently and efficiently. Qualified value and satisfactory R2 (0.171⬃0.423) and adjusted R2
respondents were those whose purpose of the current hotel stay (0.167⬃0.419). All variance inflationary factor values of
was non-business and had stayed at least twice previously in that independent variables in this model are ⬍ 3; therefore, no
hotel (to ensure respondents’ familiarity to the hotel). The significant multicollinearity problem exists. The results are
questionnaire was initially developed in English and was illustrated in Table IV, where all CSR variables and brand
subsequently translated to Chinese; the back-translation was quality (␤ ⫽ 0.63, p ⬍ 0.001) produce significant and positive
performed by two English-native marketing scholars, and two effects on brand preference. Among these three CSR factors,
Chinese marketing scholars who earned their doctorates in the the domain of CSR to stakeholders displayed the strongest
USA. After three months (May to July 2011), the 303 survey influence on brand preference (␤ ⫽ 0.58, p ⬍ 0.001). The
responses were gathered from the five cities being studied. After influence exerted from the other two CSR domains of
removing some incomplete and disqualified questionnaires, 243 environment (␤ ⫽ 0.48, p ⬍ 0.001) and society (␤ ⫽ 0.46, p ⬍
questionnaires were identified as eligible for further analysis, 0.001) was on a lower level. The results indicate that H1, H2
yielding a final response rate of 80.2 per cent. Among all the and H3 are all supported. The mediating effect of perceived
subjects, 57.7 per cent were female, 71.2 per cent were above 32 brand quality on the relationship between CSR performance
years old and 80.7 per cent reported being college educated and brand preference was tested based on Baron and Kenny’s
(1986) method. In Table IV (H4a, H4b and H4c), the results
(Table III).
show that the beta values all decreased when perceived brand
quality was introduced in each regression equation (CSR to
Table III Samples’ demographic data (N ⫽ 243) environment decreased from 0.48 to 0.14; CSR to society
from 0.46 to 0.26; and CSR to stakeholders from 0.58 to
Demographics Frequencies Percentage 0.27). All R-square values increased with perceived brand
Age quality’s influence. In this sense, the results suggest the
18⬃21 years 9 3.7 presence of a partial mediating effect of perceived brand
22⬃31 years 61 25.1 quality on the relationship between CSR performance and
32⬃41 years 160 65.8 brand preference.
> 41 years 13 5.3
Gender 5. Discussion
Female 138 56.8
Male 105 43.2 5.1 Theoretical implications
This study analyzed the relationship between three major
Educational level
domains of CSR and brand preference in the context of
High school or below 47 19.3
Chinese hotel service providers. The results suggest that
College or undergraduate 149 61.3
service providers can enhance customer brand preference by
Postgraduate 41 16.9
undertaking various CSR practices. Some studies commonly
Doctor 6 2.5
suggest that CSR can provide firms with an insurance-like
protection and lower idiosyncratic risk (Luo and
Table IV Regression analysis coefficients

Independent variable Dependent variable Beta R2 (Adjusted R2) F-value
ⴱⴱⴱ
H1 CSR to environment Brand preference 0.48 0.204 (0.200) 61.62ⴱⴱⴱ
H2 CSR to society 0.46ⴱⴱⴱ 0.237 (0.234) 74.88ⴱⴱⴱ
H3 CSR to stakeholders 0.58ⴱⴱⴱ 0.254 (0.251) 81.96ⴱⴱⴱ
Perceived brand quality 0.63ⴱⴱⴱ 0.386 (0.383) 151.43ⴱⴱⴱ
H4a CSR to environment Perceived brand quality 0.61ⴱⴱⴱ 0.345 (0.343) 127.05ⴱⴱⴱ
CSR to environment Brand preference 0.14ⴱⴱ 0.397 (0.392) 79.09ⴱⴱⴱ
Perceived brand quality 0.55ⴱⴱⴱ
H4b CSR to society Perceived brand quality 0.38ⴱⴱⴱ 0.171 (0.167) 49.53ⴱⴱⴱ
CSR to society Brand preference 0.26ⴱⴱⴱ 0.450 (0.445) 98.13ⴱⴱⴱ
H4c CSR to stakeholders Perceived brand quality 0.62ⴱⴱⴱ 0.303 (0.300) 104.90ⴱⴱⴱ
CSR to stakeholders Brand preference 0.27ⴱⴱⴱ 0.423 (0.419) 88.12ⴱⴱⴱ
Notes: ***
p ⬍ 0.01, **
p ⬍ 0.05, *
p ⬍ 0.1
187
Bhattacharya, 2009); however, Eisingerich et al. (2011) country. Examples include the Recommended CSR Standards
contend that CSR practices can only protect firms from for Chinese Corporations and the Compilation of Best Practices
negative information in regard to socially related contents and published by the China Enterprise Confederation and the China
not from negative information regarding customer service and Business Council for Sustainable Development (CBCSD), as
product quality. The findings of the current study are well as the Ministry of Commerce’s guidelines for the
consistent with prior research in the Western context, in that preparation of CSR reports. CSR in China is moving rapidly
CSR is a driver of branding consequences (Brown and Dacin, from conceptual study into implementation and the evaluation
1997; Hoeffler and Keller, 2002; Luo and Bhattacharya, of CSR initiatives at individual companies. During the first
2006; Ricks, 2005; Sen and Bhattacharya, 2001; Singh et al., quarter of 2012 alone, many international companies
2008). Findings of this study also support the notion that operating in China implemented CSR-related actions. To
Chinese consumers are beginning to use CSR information to name just a few, Oracle signed an educational technology pact
evaluate brands (Tian et al., 2011). Offering consumers more in China and joined with the Computer and Information
information and demonstrating convincible evidence about Science Institute of Southwest University to establish a new
service providers’ CSR practices will enhance not only education center in Chongqing. British retail giant Tesco
consumers’ brand preference but other possible critical signed its first collective labor contract with employees in
dimensions as well, such as perceived service quality or China. According to the contract, Tesco will establish an
customer loyalty (Mandhachitara and Poolthong, 2011). This annual collective wage consultation system, based on the
study also suggests that enhancing customers’ understanding increase of China’s consumer price index, the profit
about service providers’ CSR performance and strengthening conditions of the company and the wage level of the entire
customers’ brand quality perception will be a good way to industry. HTC has announced plans to set up a new Faith
increase customers’ brand preference. Another contribution to Hope Love Foundation, with an investment of about US$30
the literature is the effect of each domain of CSR performance million, based on top technical platforms to provide a more
on brand preference. The findings reveal that CSR to convenient learning environment to the next generation in
stakeholders has the strongest influence on Chinese Taiwan China (CSR China.com, 2012). The right balance of
customers’ brand preference among the three CSR domains strategy, brand management and CSR can lead to a
analyzed. One possible reason might be that because hotel sustainable competitive advantage for the firm (Werther and
guests are by definition stakeholders, hotel CSR to Chandler, 2005). The concept of CSR in China has gained
stakeholders is more relevant – and therefore more valuable – considerable support and intensive media attention in the past
to them. On the other hand, Chinese customers currently decade. Chinese consumers tend to have increasing awareness
regard hotels’ societal and environmental CSR practices (e.g. and expectations about business obligations toward the broader
treatment of employees, energy conservation, recycling, etc.) society (Ramasamy and Yeung, 2009). To derive branding
as less important. These two CSR domains are relatively less benefits beyond economic transactions, service providers could
well-known and/or more difficult to evaluate due to their research their market positions and resource allocations for
complex nature and lack of information by hotel guests. In this voluntarily incorporating CSR programs. Properly executed
case, consumers probably show a lower level of sensitivity to CSR programs reflect a strong commitment to business ethics,
CSR matters if their awareness is more limited (Singh et al., improve internal and external stakeholders’ interests and support
2008; Mohr et al., 2001). The current research contributes to the community’s sustainable development.
the literature by finding that not all CSR activities are equally The current study concludes that relatively more CSR
effective. Customers in emerging markets still appear to be attention needs to focus on improving stakeholders’interests.
focused more on the quality of brands and, to some extent, Among the three major aspects of social responsibilities, CSR
stakeholder CSR practice, as these provide direct benefits to to stakeholders produced the strongest contribution of
customers. The current research also contributes further increasing the level of brand preference. CSR to stakeholder
evidence about the importance of brand quality in influencing activities can include fair trade relationships with suppliers,
brand preference in a services context. Results indicate that safe workplace conditions and programs to improve
respondents’ brand preference levels are directly influenced by
conditions in the local community (Vermeir and Verbeke,
perceived brand quality. Although CSR performance is an
2006; Marin and Ruiz, 2007; Peloza and Shang, 2011). In this
important predictor of brand preference, the causal
regard, service providers should strive to enhance community
relationship between perceived brand quality, introduced as a
member satisfaction, ameliorate working conditions and
mediator, and brand preference is even stronger.
establish a law-abiding image, as suggested by McWilliams
and Siegel (2001). This is perhaps because promoting societal
5.2 Managerial implications and environmental CSR performance has become increasingly
Empirical results from this study show service providers could common among various service providers, and customers are
learn from customer responses to their CSR practices. The gradually getting accustomed to seeing service providers’ CSR
principal finding is that a brand can become more preferable practices. The trend toward higher visibility of CSR
to Chinese consumers through CSR efforts and investments. performance will make service providers to “do more” or “do
Government ministries and agencies, their affiliated research something unique” to differentiate their brand image.
institutions, economic organizations and other groups are Having a brand perceived to be socially responsible does not
publishing theoretical research on CSR, case study guarantee a competitive advantage. In practice, a socially
compendiums of CSR initiatives and guidelines for evaluating responsible brand image may enhance Chinese consumers’
CSR. These are being furnished to companies throughout the preferences toward the brand. However, CSR’s effect, no
188
matter how positive, cannot offset negative factors such as discussed in this study, including shareholder, competitor and
customer perceptions of low product quality. In particular, supplier concerns. Future studies might include inquiry into
CSR endeavors should be devoted to stakeholder (rather than whether such factors influence brand outcomes.
environmental or societal) concerns and societal obligations
(i.e. support for NGO operations, commitment to sustainable
growth and contributions to social well-being). This
Notes
recommendation is slightly at odds with service providers’ 1 There are only three papers discussing topic links between
more common CSR focus on appearing “green” (Lyon and CSR and service issues in two major service journals
Maxwell, 2008), and focusing on environmental protection ( Journal of Service Marketing and Journal of Service
practices (e.g. pollution levels) (Peloza and Shang, 2011). Research) in the past five years.
While an NGO may either issue threats (such as boycotts or 2 Of course, numerous factors influence brand preference,
negative media campaigns) or promise rewards (such as including innovativeness of a firm/brand (Boisvert and
endorsements) to induce a company to accede to its demands, Ashill, 2011), brand trust (Ha and Perks, 2005), brand
actively informing consumers and NGOs about companies’ familiarity (Baker et al., 1986) and so on; however, current
commitments to engage in CSR to environment activities is an study tries to just focus on CSR performance as center of
effective and quick way to show corporate determination. In the study without paying too much attention on other
addition, larger corporations and global companies typically factors. No matter what, the mentioned studies still
engage in CSR in more than one area, simultaneously inspired the authors very much and provided a profound
contributing funds to humanitarian, social service and understanding about brand preference to authors.
environmental conservation, while undertaking CSR programs
3 Mohr et al.’s (2001) work, one of the most cited CSR
that are integrated into business planning and operations
papers, was cited by more than 540 refereed journal
(Rangan et al., 2012). Smaller service providers face resource
papers since its publication, while the tenth most cited
restrictions and may elect to concentrate their CSR performance article in the Journal of Marketing), “Understanding the
into corporate core values or a business operational concern Customer Base of Service Providers: An Examination of
(Porter and Kramer, 2006). the Differences Between Switchers and Stayers”, was cited
by 659 refereed journal articles (from 2000 to 2009).
5.3 Limitations and future studies 4 Sometimes stakeholders of a service provider could be
This study analyzed how CSR performance influences brand people of reference group to a consumer. For example, a
preference in the Chinese hotel industry. Results may not be professional hotel senior manager, who is an employee of a
generalizable to other industries without further study. The hotel with expert effect, or Donald Trump, a business tycoon
conclusions might be applied to other CSR programs in who also owns several hotels and restaurants with celebrity
different industries by widening product categories in future effect, both may influence one’s brand preference.
studies (Liu and Brock, 2011). In addition, the sample size 5 For example, further reducing energy and water
was relatively small and does not accurately represent China’s consumption by 25 percent per available room by 2017,
general population. It is known that with investigations creating green construction standards for hotel
dealing with CSR or sustainability, social desirability bias can developers, educating associates and guests to support the
be an issue. In the presence of an interviewer or other environment and investing in innovative conservation
consumers, a respondent is likely to rate CSR or sustainability initiatives including rainforest protection and water
initiatives higher. Future research can consider using other conservation.
approaches (e.g. projective techniques) to control for such
issues. This study focuses on middle-income customers who 6 Marriott hotels’ “Spirit To Serve Our Communities Day”
patronize middle-level hotels. It could be useful to replicate enlists more than 150,000 employees in more than 2,000
the results across the different “segments” (rich/middle/ locations in 60 countries, including China, to deliver
low-income classes) to improve generalizability for the needed community services through volunteer efforts.
Chinese hotel customers’ perceptions about CSR activities. 7 There are about 521.3 thousand high net worth
Many interesting issues remain unexplored in this area. individuals (HNWIs). HNWIs are defined as those having
Because branding strategy and CSR programs differ in their investable assets of US$1 million or more, excluding
objectives, design and execution across industries, future primary residence, collectibles, consumables and
research might analyze effectiveness of programs based on consumer durables. The total population in China is
these attributes. Comparison studies of the CSR performance about 1.34 billion, so the wealth people only occupied a
demonstrated by different companies (e.g. foreign hotels vs very small portion (approximately 0.04 per cent).
local hotels) or their effectiveness across different user groups
in China could also be valuable for marketers. In addition,
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Appendix
Matthew Tingchi Liu et al.
Table AI t-statistics in parentheses (detailed)

CSR and perceived brand quality
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
Variable BP BP BP BP BP PBQ BP PBQ BP PBQ BP PBQ BP
CSR to environment 0.487ⴱⴱⴱ 0.160ⴱⴱ 0.617ⴱⴱⴱ 0.142ⴱⴱ 0.455ⴱⴱⴱ 0.276ⴱ
(7.85) (1.97) (11.27) (2.13) (6.23) (2.98)
CSR to society 0.465ⴱⴱⴱ 0.199ⴱⴱⴱ 0.383ⴱⴱⴱ 0.265ⴱⴱⴱ 0.296ⴱ 0.249ⴱⴱⴱ
(8.65) (2.61) (7.04) (5.28) (2.40) (3.67)
CSR to stakeholders 0.587ⴱⴱⴱ 0.309ⴱⴱⴱ 0.624ⴱⴱⴱ 0.270ⴱⴱⴱ 0.392ⴱⴱⴱ 0.305ⴱ
193
(9.05) (3.32) (10.24) (3.95) (4.68) (3.22)
PBQ 0.639ⴱⴱⴱ 0.559ⴱⴱⴱ 0.521ⴱⴱⴱ 0.507ⴱⴱⴱ 0.519ⴱⴱⴱ
(12.31) (8.78) (9.64) (8.40) (8.16)
Constant 1.759ⴱⴱⴱ 2.005ⴱⴱⴱ 1.179ⴱⴱⴱ 0.944ⴱⴱⴱ 1.169ⴱⴱⴱ 1.574ⴱⴱⴱ 0.879ⴱⴱⴱ 2.735ⴱⴱⴱ 0.581ⴱⴱ 1.398ⴱⴱⴱ 0.470 0.857ⴱⴱⴱ 0.499ⴱ
(6.19) (8.66) (3.79) (2.98) (5.04) (6.28) (3.29) (11.64) (2.36) (4.79) (1.64) (3.01) (1.75)
Observations 243 243 243 243 243 243 243 243 243 243 243 243 243
R-squared 0.204 0.237 0.254 0.302 0.386 0.345 0.397 0.170 0.450 0.303 0.423 0.402 0.455
*** ** *
Notes: p ⬍ 0.01, p ⬍ 0.05, p ⬍ 0.1, PBQ ⫽ perceived brand quality, BP ⫽ brand preference
Volume 28 · Number 3 · 2014 · 181–194
About the authors Guicheng Shi, PhD, is Associate Professor and

Department Head of Marketing, Macau University of
Matthew Tingchi Liu, PhD, is Associate Professor of
Science and Technology. He published several papers in
Marketing, University of Macau. His work has appeared in
Industrial Marketing Management, Journal of Business Ethics,
several journals, including Industrial Marketing Management,
Psychology & Marketing, International Journal of Market
European Journal of Marketing, Journal of Consumer Marketing,
Research, Journal of International Consumer Marketing and
Journal of International Consumer Marketing, Journal of
others. Shi received his doctoral degree from Hong Kong
EuroMarketing, International Journal of Contemporary
Baptist University. Guicheng Shi is the corresponding author
Hospitality Management, Asia Pacific Journal of Marketing and
and can be contacted at: gcshi@must.edu.mo
Logistics and International Journal of Mobile Communications,
among others. Prior to joining academia, he was the Chu Rongwei, PhD, is Assistant Professor of Management
consultant of Ernst & Young. School, Fudan University. Chu has published his work in Journal
on International Management, The International Review of Retail,
Ipkin Anthony Wong, PhD, is Assistant Professor of
Distribution and Consumer Research, Asia Pacific Journal of
Institute for Tourism Studies, Macau. Wong received his
Marketing and Logistics and so on. Chu is also a visiting scholar in
doctoral and master degree from University of Hawaii (Manoa),
University of California, Irvine, USA (2012).
USA. His research covers marketing and hospitality. He has
published in Marketing Intelligence and Planning, Journal of James L. Brock, PhD, is Dean and Professor of the School of
Services Marketing, Journal of Service Management, Journal Business at Pacific Lutheran University, USA. He is the former
of International Consumer Marketing, International Journal of Dean of the Sigmund Weis School of Business at Susquehanna
Contemporary Hospitality Management, UNLV Gaming Research University, USA, and former Dean of the College of Business at
& Review Journal, International Journal of Hospitality Montana State University. His publications appear in European
Management, Journal of Convention & Event Tourism, Journal of Journal of Marketing, Journal of International Consumer Marketing,
Hospitality and Tourism Research and Journal of Hospitality International Journal of Bank Marketing, Asia Pacific Journal of
Marketing & Management. Marketing and Logistics and others.
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints
194
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preference features in all of the major texts on brands and

positive perceptions about the company’s employment practices

and Ashill, 2011). To study the relative strength of CSR’s H4a H1

Table I Factor analysis and reliability test

inquiring by phone. If the hotel had a formal CSR program 4. Results

Table IV Regression analysis coefficients

Rangan, K., Chase, L. and Karim, S. (2012), “Why every

Table AI t-statistics in parentheses (detailed)

About the authors Guicheng Shi, PhD, is Associate Professor and

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

International Review on Public and Nonprofit Marketing 14:4, 513-533. [Crossref]

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