Consumer Social Responsibility Notes

Consumer Social Responsibility

Definition

  • Consumer Social Responsibility (CNSR) is defined as the "conscious and deliberate choice to make consumption choices based on personal and moral beliefs" (Devinney et al. 2006). Responsible consumers consider the ecological and social consequences of their purchasing decisions.

Ethical Consumerism

  • Ethical consumerism has two basic components:
    • An ‘ethical’ component relating to the importance of non-traditional and social components of a company’s products and business processes.
    • A ‘consumerism’ component implying that consumer preferences and desires are partially responsible for the increasing influence of ethical or social factors.
  • Ethical consumerism has evolved over the last 25 years from focusing almost exclusively on environmental issues to more broadly incorporating matters of conscience.
  • There has been a growing debate about the importance of ethical consumerism and the impact of large-scale strategies on consumer awareness and spending.

Manifestations of CNSR

  • CNSR is expressed in three ways:
    • Expressed activity with respect to specific causes, such as donations or willingness to participate in protests and boycotts.
    • Expressed activity in terms of purchasing or non-purchasing behavior.
    • Expressed opinions in surveys or other forms of market research.

Aligning CSR and CNSR

  • Organizations need to be more proactive with respect to Consumer Social Responsibility to increase the impact of their Corporate Social Responsibility initiatives.

Steps for Companies to Be More Proactive

  1. Select Social Issues Carefully
    • Consumers are concerned about specific issues and are unlikely to react to social product features that are “too broad.”
    • The relevancy of the issue is crucial, as consumers’ evaluations of social product features tend to be context-specific (e.g., child labor in athletic shoes vs. animal testing in bath soap).
  2. Don’t Believe the Surveys
    • Companies often rely on surveys to determine needs and preferences.
    • Most consumers will indicate they care about most issues because there are socially acceptable answers, and the cost of lying is zero.
  3. Don’t Underestimate Functional Product Features
    • Consumers purchase products to fulfill specific needs and wants.
    • Consumers will not sacrifice functional features for more socially acceptable ones and will not react to an appeal to do so.
    • Social product features must have functionality.
  4. Communicate to the Specific Segment in Its Specific Language
    • Consumers possess little knowledge of the social aspects of products and seek out culturally embedded rationales to justify their behavior.
  5. Focus on the Natural Incentive to Change
    • Don’t force consumers to drink from the CSR cup.
    • Effective communication should not only make consumers aware of your product’s social features but also educate them about how such choices are better for them, independent of the benefit to society.

Corporate Social Responsibility Towards Consumers

  • The responsibilities towards consumers that Corporate Social Responsibility includes are as follows:
    • Providing goods of standard quality.
    • Charging fair prices.
    • Providing prompt and courteous after-sale services.
    • Handling consumer complaints and grievances quickly.
    • Avoiding unfair trade practices like adulteration, black marketing, and hoarding.

Connection between Corporate Social Responsibility and Consumer CSR

  • CSR is a strategy used by companies to attract consumers and has a close connection with consumers.
  • Organizations that engage in CSR have more secure growth, development, and profit margins.
  • Consumers receive significant assistance from CSR.
  1. Community Development
    • In developing countries like India, CSR contributes to the development of villages and slums by providing basic amenities.
  2. Fair Pricing
    • CSR focuses on fair treatment of consumers, including pricing.
    • The price of a commodity is determined according to affordability, especially for necessities.
  3. Quality
    • CSR ensures that goods meet predetermined standards of quality, ensuring consumer safety.
  4. After Sale Services
    • After-sale services allow consumers to voice feedback and grievances, with the assurance that the company will make changes accordingly.
    • Prompt and efficient after-sale service is highly valued by consumers.
  5. Unfair Practices
    • CSR policies often include strict deterrents against unfair trade practices, ensuring consumer protection.
    • The Consumer Protection Act, 1986, includes specific provisions for unfair trade practices, as mentioned in Sec 2(1)(r).
  6. Social Change
    • Various movements are initiated in the name of CSR.
    • Goods are distributed to consumers to promote urbanization, and awareness of consumer protection is spread, leading to a more developed society.

Five Consumer Responsibilities

  1. Inform Yourself Before Purchasing
    • Consumers must inform themselves about product and service knowledge to the best of their abilities.
    • Whether purchasing equipment or receiving treatment, consumers need to know what comparable products are on the market.
  2. Read and Follow Instructions
    • Products come with instructions, warnings, and fine print.
    • Consumers have a responsibility to read all literature that comes with the product or service.
    • Consumer injury, misuse, and breakage often occur when instructions are not followed or fine print is not read.
  3. Use Product and Service Properly
    • The intentional misuse of products is punishable by law in some cases.
    • Consumers have the responsibility to use the service and product for its intended purpose.
  4. Speak out Against Wrongdoing
    • This is an ethical choice to prevent other consumers from being wronged by the same business.
    • Most companies have a complaint department to address grievances.
    • Consumers can also contact the Better Business Bureau, which can resolve customer disputes and inform businesses of customer service problems.
  5. Know Customer Responsibilities for Purchasing
    • This includes not only stealing a product but also buying goods in secondary markets, such as prescription medication from a street dealer.