Recent orders
The Impact of Divorce on Children
The Impact of Divorce on Children
Stephane Lapeine
PSYC 210
Liberty University
Abstract
There is an enormous amount of research on the effects of divorce on children. All of these researchers point to the same fact: children suffer when parents separate. In the past few decades, the rates of marriage have been declining and the divorce rates have remained steady. This means that many families are continuing to break up. Unfortunately, the issue of divorce has many negative effects on children. For children, divorce is a harrowing experience full of stress, sadness, and confusion. Therefore, it is important to know the effects that divorce has on children. This paper will discuss the impact of divorce on children. The first section of the paper will briefly summarize the issue of divorce. The next section will highlight the effects of divorce on children including, but not limited to, drug abuse, poor social skills, susceptibility to illness, increased chances of dropping out of school, and early death. The last section of the paper will summarize and restate the points earlier discussed.
You are off to a solid start with your abstract. You have highlighted some key ideas about the impact of divorce on children. I am looking forward to reading your final paper and seeing the research you cover. Keep in mind that the abstract is a brief, comprehensive summary of the factual content of your paper. It is best to include the four or five most important concepts and/or implications that the reader can expect to see in the paper. You may find you need to fine tune your abstract once you have actually written your Research Paper. Please note the few edits/comments I made.
Thank you! Keep up the great work!
The Impact of Divorce on Children
With the subject of divorce hardly becoming an exception anymore, the immediate effects of this issue is on children. Over the past few decades, the rate of marriage has been dipping and divorce rates becoming steady. Studies on the effects of divorce on children show worrying results. Generally, divorce places children at a greater risk of many problems. Some of the impacts include drug abuse and crime, poor social skills, susceptibility to sickness, increased chances of dropping out of school, and early death.
First, divorce places children at a risk of drug abuse. Because of the stigma associated with separation of parents, children start to engage in irresponsible behavior such as smoking, alcohol abuse, and crime. Secondly, divorce affects children’s social skills based on the fact that they are likely to suffer from stress, anxiety, and low self-esteem (Hansen, 2013). Therefore, children who are victims of divorce will be socially isolated and in most cases, will fall behind their peers in academic work.
Divorce also affects the health and wellbeing of children. Coupled with stress associated with divorce, children who are victims are vulnerable to a myriad of health complications because they lack proper adult supervision and a safe environment to grow up in (Hansen, 2013). There are also chances that children can drop out of school when parents’ divorce. This is because there is lack of parental support, supervision, and financial assistance to help such children. Since the conditions that children are brought up in when parents’ divorce are not conducive, the chances of early death are high.
Generally, divorce has long term emotional and psychological damage on children. The effects of divorce on children cannot be underestimated. These effects include drug abuse and crime, poor social skills, susceptibility to illness, increased chances of dropping out of school, and early death. If not provided with adequate support, such children will not achieve their goals and aspirations.
References
Hansen, L. (March 2013). 9 negative effects divorce reportedly has on children. The Week. Retrieved from http://theweek.com/article/index/242059/9-negative-effects-divorce-reportedly-has-on-children
I appreciate your effort on your reference page. You did a great job with Hanging indent format and double spacing. Although you listed one of the references you are planning to use, please note that this paper requires using 5 sources. This cost quite a number of points for this assignment. As noted above, 2 need to be articles from Scholarly, Professional Journals.
Please compare each source you use to examples on the following websites to perfect APA formatting:
HYPERLINK “http://www.apastyle.org” www.apastyle.org
HYPERLINK “http://owl.english.purdue.edu/owl/resource/560/01” http://owl.english.purdue.edu/owl/resource/560/01
Thank you for your diligence on this assignment. I hope my comments are helpful as you complete your Research Paper. I look forward to reading it. Lydia Tchividjian
The Impact of Culture on Consumers Propensity to Innovate and Susceptibility to Interpersonal Influences
The Impact of Culture on Consumers’ Propensity to Innovate and Susceptibility to Interpersonal Influences
There is an increase in the number of businesses, which are becoming globalised, and this has provided a reason and need to have an understanding of the various cultural contexts with regards to consumer behavior. This paper will seek to investigate the impact that culture has on the propensity of consumers to innovate as well as their susceptibility to influences, which are interpersonal. This means that the research will focus upon informational and normative interpersonal influences. Previous research has been done in attempt to establish the factors that seek to influence the accepted rate of innovation. This means that culture is a key factor according to some researchers, but other researchers oppose this notion. Therefore, international marketers need to employ informational and normative interpersonal influences. This will assist them in attracting consumers who will accept innovations when marketing strategies are directed towards them. Some of the factors that the marketer should always consider include the long-term orientation, uncertainty avoidance, power distance and collectivism cultures.
Key Words: Culture, Consumer, Marketing, Interpersonal Influences, Innovate, Propensity, Normative Influences
Introduction
On an annual basis, a lot of money is spent in launching, developing and researching new services and products to consumers globally. Companies that constantly maintain a revenue growth that is higher than average are usually engaged in continuous and constant introduction of new services and products. Furthermore, these firms seek to expand and operate internationally as well. It has been found out that annually, the rate at which consumer products fail is at 90 percent. The nature of development and research is quite costly, as well as the expenses incurred when new products are launched into the market. This means that firms need to have a better understanding of all the innovators that they are involved with, as this is key when trying to understand about the concept of new product diffusion (Schuster & Harris 1999).
Innovators refer to consumers that have a high level of innovation in order to effectively adopt new services and products. Also, they are usually the first people to try out new offerings. Since innovators are responsible for determining the initial failure or success of various innovations, marketers have a goal to attract a large number of innovators during the introduction stage of services or products. When trying to obtain information about innovation, consumers tend to have differing propensities as they rely on interpersonal channels and media habits. This is in order to determine the speed which can be used to adopt innovation as interpersonal influences are extremely important. It is thus the reason why interpersonal influence is usually categorized as normative and informational interpersonal influence (Rorty, 1991).
There is an increasing trend that is directed towards business activities globalization and this provides a powerful reason that is useful in understanding the consumer behaviors’ cultural context. The trend has further more been heightened because of the importance associated with the impact of national cultural influences on the diffusion of innovations and consumers’ innovativeness. It is unfortunate that many authors have not researched about this issue to a large context. Some of the researchers who have provided their findings concerning the relationship between product diffusion and national culture rate tend not to be consistent. These researchers include; Sean Dwyer, Hani Mesak and Maxwell Hsu (2005), Detmar Straub (1994) and Jain and Takada (1991). They suggest that culture has an influence when it comes to diffusions of innovations. At the same time, Jedidi et al (1993) and Kumar et al (1998) all have a little support for the diffusion of innovations and culture correlation.
A comparison between the Eastern-Western culture influences on the propensity of a consumer to innovate as well as their interpersonal influences still does not have sufficient research on it. A lot of research has been focused on the cultural influence, which is western when referring to diffusions of innovations and innovativeness. This study will make a comparison between China and Sweden in attempting to find out the topic of interest.
Many Swedish companies depend on international business and this ensures that they have to find new markets that will increase their market share internationally. At the same time, China is a force to be reckoned with in the world’s economy. In turn, international companies in Sweden have planned and rushed to enter the Chinese market with their many new services and products. China is now known for being a global operations production site as well as being an extremely large market. According to a report on the Chinese business climate, the Swedish market has expanded rapidly into China (Tellefsen & Hirokazu 1998). There has been an increase in the number of people who have been employed in China based, Swedish firms. Also, an increase in revenues has been witnessed and this is mostly as a result of the sector involved in the production of industrial goods. The services sector has also experienced an increase, which has been of benefit to the two countries. Therefore, the cultural differences between China and Sweden have to be known. Based upon the presented information, it is vital to know about the impact that culture has on the propensity to innovate by consumers, as well as on interpersonal influences between China and Sweden. Marketers will benefit from the increased knowledge concerning this issue at hand.
Thesis: This paper will seek to establish the impact that culture has on interpersonal influences and innovativeness of the two cultural groups, which are diverse. Furthermore, this paper will ensure that marketers have an understanding about the impact of national culture on product diffusion. This will in turn guide marketers that want to launch new services and products cross-nationally between Eastern and Western countries.
Research Questions: This paper will attempt to answer the following questions in order to gain insight into the topic being discussed:
What impact does culture have on the consumers’ propensity to imitate or innovate between China and Sweden?
What impact does culture have on the consumers’ susceptibility to informational and normative interpersonal influence between China and Sweden?
Literature Review
Two Propensities and Adopter Categories- This refers to a known classification scheme which indicates the position of a consumer with regards to the other consumers based on time. Also, it is the same as finding out how a consumer adopts to new products. In the literature involving diffusion, there are five known adopter categories. They are laggards, late majority, early majority, early adopters and innovators, and innovativeness is what is used in this particular adopter categorization. This adopter categorization is often depicted as one of the normal distribution characteristics, which describe a known total population that will adopt a product. It is estimated through a percentage of the entire population, Laggards (16%), Late Majority (34%), Early Majority (34%), Early Adopters (13.5%) and innovators will be at 2.5%. Roger has described certain dominant characteristics that exist in all the named categories. They are traditional laggards, skeptical late majority, deliberate early majority, respectable early adopters and venturesome innovates.
(Roger, 2003)
According to Bass, adopters can often be categorized into two unique groups of imitators and innovators. The laggards, late majority, early majority and early adopters make up the imitators. On the other hand, the group that has the innovators has relations with part of the population, which tends to innovate. These people act mainly based upon purchasing independency and sources that have external influence in their social system. The imitators make their decision to adopt based upon the influence they receive from others. According to Gatigon et al these two groups are referred to as the ‘Propensity to imitate’ and ‘Propensity to innovate’. The provided classification is well in accordance with an earlier conceptualization. It claimed that a predisposition occurs when innovation is adopted and it is not a consumer personality trait, which is inherent.
Innovativeness and Innovators- Consumer innovators refer to small populations of consumers that are early purchasers of any innovation. According to Roger (2003), innovators are the initial 2.5 % of people in a social system that adapt to innovations. According to other researchers, innovation has been defined with regards to innovativeness. For example, innovators can be described as people who fall into an arbitrary proportion of the entire market. In this paper, innovators will be consumers that are characterized by the highest level of innovativeness. Innovators are extremely important because they are responsible for initiating cash flow processes and also, early adopters copy them. These innovators use products quite intensively and they represent a significant market with reference to product volume. It is thus why they are referred to as being opinion leaders. Roger goes ahead to describe innovativeness as being the degree at which individuals or other units of adoption are relatively early when adopting to innovation as compared to other members of any social system. Midgley and Dowling (1978) describe innovativeness as being innate in individuals, as well as being different and that it is a key component of the innovation diffusion theory.
Interpersonal Influence- Traditionally, the diffusion theory has been referred to as the theory of communications. It tends to focus on certain communication channels and this means that information concerning innovation is usually transmitted among or to members in a social system. The available means are interpersonal communications and mass media. The members of any given society have various propensities that rely on interpersonal channels or media habits. This is when they want to find out about information, which relates to innovation. Interpersonal influences are mostly used when trying to find out about the speed of the adoption of innovation. This influence is extremely significant when new products are being diffused as it the driving force that promotes the spread of many new things.
It is already known that interpersonal influence is categorized into normative and interpersonal influence. Informational influence exists as a result of individuals having the tendency to accept and believe that information is evidence that exists from others. At the same time, normative influences refer to the tendency among people to conform to other people’s expectations. On the other hand, when referring to informational influence susceptibility, it means that there is a tendency to always trust the information that is received from others as being the accurate truth. Therefore, information influence results from observing other people’s behaviors or research obtained from people who are thought to have knowledge on certain issues. The tendency of an individual to conform positively relates to normative interpersonal influence.
In the year 1989, Netemeyer Teel and Bearden (1986) tested and developed an informational and normative (two-factor), 12 items measure of the issue of consumer susceptibility with regards to interpersonal influence. They wanted to find out some of the personality traits that vary across certain individuals. In the year 2002, it was claimed that most of the high scores of susceptibility to interpersonal influence signify the tendency that people have to be influenced in making decisions by others. This means that if the score is low, it suggests that there is more independence when people are making decisions.
Scholars claim that there is a preference among innovators to rely and use interpersonal sources, rather than obtaining information from interpersonal sources. Sangeeta Singh (2005) came up with four dimensions that were derived from Hofstede in an attempt to distinguish the influences that national cultures have on consumer’s interpersonal choices and behavior. She found out in her study that the consumers from the various national cultures have varying levels of susceptibility to interpersonal communications and normative influence. She focused on consumers that come from a culture with a power distance that is large, are feminine as well as strong uncertainty avoidance. These people will most likely be influenced by the existing interpersonal communications. The effect of innovativeness and attention to information for social comparison on normative and informational was examined by Clark and Goldsmith (2003). Their respondents were from American public universities and they were a total of 326 students that were administered with self-report surveys. They found out that innovativeness has a negative relation to susceptibility to interpersonal influences.
Culture- This word originated from ‘cultura’ a Latin word that means spiritual cultivation or ennoble. This concept is of great interest and diversity and quite a number of researchers have come forward to try and define it based on the world’s cultural aspects. Hofstede (2001) is one such researcher who came up with the definition of culture. He referred to culture as being a collective programming that assists the mind to distinguish the members of a certain category with each other. In matters that concern culture, Hofstede is referred to as a famous researcher and this study will focus on his five dimensions. Another prominent researcher that came up with his definition of culture is Kluckhohn. He suggested that culture tends to consist of different uniform ways of reacting, feeling and thinking. Later on, this ways are transmitted and acquired through symbols that constitute human achievements (Lowrey, 1991).
Cultural differences between China and Sweden- Hofstede’s cultural dimensions will be used when clarifying the differences between Sweden and China. The comparison will be based upon the scores of the cultural dimension. China (20) has lower scores in individualism as compared to Sweden (71), and this means that the Chinese people have a culture that is collectivist. This means that that Sweden is not highly likely to have cooperative ventures. The power distance in Sweden (31) is not as high as that in China (80). Power distance is used to measure how unequally or equally power can be distributed in a society and how it is accepted unequally. Since China has an extremely high power distance, it means that it has a centralized system, while that of Sweden is decentralized.
Sweden (5) has a lower value than China (50) with regards to femininity or masculinity. This means that the society of China is quite masculine as compared to Sweden. This dimension refers to the social manifestation of behavior and individual personality elements related to human gender. With regards to uncertainty avoidance, Sweden (29) has a lower value when compared to China (60). This shows that Swedish people are more likely to take risks as compared to the Chinese. The high values means that the particular society puts a lot of effort in order to reduce risks than compared to the one, which has a low value. Chinese consumers with high levels of uncertainty avoidance do not have an adventurous spirit as well as having a sense or risk. This is contrary to Swedish consumers with low-uncertainty avoidance that will take risks because they believe that risks are natural. Lastly, China (118) has an extremely strong traditional orientation as compared to Sweden (33). This is based upon the dimension of short-term versus long-term orientation. The Chinese tend to focus on the long-term view of some outcomes as compared to the Swedish who focus on the short-term (Leon& Lazar, 2004).
Methodology
This study has used a deductive approach that involves using an already established theoretical framework. Furthermore, it has established certain predictions and hypotheses before coming up with practical solutions. A quantitative method has been used in this research because it has many advantages as compared to a qualitative method (Mugenda & Mugenda, 2003). It is easy to formulate questions that will be based upon the existing theory and when using a statistical analysis. Questionnaires have been used in order to test the presented theory. Furthermore, the quantitative method will be used to collect information concerning the customers from the two countries. The most appropriate sample design in this study is the snowball and convenience samples.
Secondary sources and primary sources have been to collect information. The primary data will assist in addressing certain specific research questions or objectives. The secondary data has already been obtained from other researchers who earlier on did a similar study. Secondary and primary sources have been employed in this research in the most effective manner. The secondary data has been obtained from internet sources, scientific articles and written literature (Sekaran, 2003). They have been used in order to provide an in-depth knowledge, and gain information on data and improved methods to be used in this research. The university data base has been quite useful in providing credible sources. Since it was not possible to go to Sweden and China, the respondents were students from this university, and were Chinese and Swedish nationals (Berg, 2001). This analysis was to ensure that more knowledge about the impact of culture on the propensity of consumers to innovate and their susceptibility to various forms of personal influences.
Discussion
It is evident that from this research there are no cultural differences with regards to consumers’ susceptibility to informational and normative interpersonal influence. There are no significant or note-worthy differences with regards to consumers’ propensity to engage in innovation. None of the five cultural dimensions by Hofstede have a correlation with innovativeness. This finding is different from the one Sangeeta Singh had in the year 2005. She had found out that masculinity, weak uncertainty avoidance and small power distance effectively demonstrates innovativeness. Similar findings as the ones that I have found are supported by Echambadi and Ganesh (1998) as they found out that culture cannot be easily identified as being a variable, which affects the process of diffusion.
Cultures have no impact on the imitation of propensity that is present among consumers. Furthermore, China and Sweden have significant differences with reference to normative influence. It means that there is a link between the four cultural dimensions except for the Femininity and Masculinity dimension with normative influence (Herbig, 1998). Consumers that come from cultures that have long-term, strong uncertainty avoidance, large power distance and collectivist orientation usually are highly likely to be susceptible to normative influences.
Informational influence is greatly affected by culture based on this research. Informational influence is used in measuring the extent at which consumers seek information and observe others. There are four dimensions of culture that have an association with the influence degree that people derive from others except for the Femininity and Masculinity dimension. Cultures that are more masculine tend to be easily influenced by the informational influence. Therefore, consumers who are from cultures that have long-term, strong uncertainty avoidance, large power distance and collectivist orientations are susceptible to the informational influence (Keith. & Housden, 1998).
It was possible to identify the fact that culture acts as a variable, which affects consumers’ propensity to imitate and consumer innovativeness. Additionally, consumers that are from various national cultures have varying sensitivity levels to informational and normative influence. Specifically, consumers from cultures that have long-term, strong uncertainty avoidance, large power distance and collectivist orientations are easily persuaded to adopt new products. This is as a result of informational and normative influence. Females and males have significant differences with regards to innovativeness as this element is quite high among females. Also, the occupation of an individual has an impact on interpersonal influences. This means that employees will be swayed by informational and normative influences.
Conclusion
Research that focuses consumers’ innovativeness and innovators is extremely beneficial to the marketing theory. Also, it is helpful in the practice of marketing because many firms rely on their new product’s success in order to promote profitability and future growth. The Eastern and Western cultures have different susceptibility to interpersonal influences among consumers. This has a strong implication for marketers especially those who want to have a career in the international market. The findings of this research prove that firms have high chances of coming up with effective strategies, which will be implemented to ensure that innovations are successful. Consumers should not be extremely sensitive to interpersonal influences. When coming up with a marketing strategy that is aimed at a specific culture, a lot of research needs to be done. For example, cultures that have long-term, strong uncertainty avoidance, large power distance and collectivist orientations, information on interpersonal influences need to be known. This will assist in attracting consumers that will be willing to accept new ideas and products.
In cultures that have a collectivist orientation, consumers tend to be integrated into groups, which are cohesive and are characterized by trust and loyalty. They have a spirit that advocates for teamwork and they are most likely to continue with their usual behaviors when making purchases. The required strategy when marketing to such cultures is to focus on interpersonal communication. This will ensure that new services and products are diffused into the various markets. In cultures, where the power distance is high, the relationships of consumers with regards to communication tend to be closer. Here, consumers will make the decision to purchase items based on the suggestion of other people. A communication strategy that is targeted towards this culture needs to ensure that role models are included so that they persuade people to accept products, which are new.
Lastly, in cultures where uncertainty avoidance is strong, consumers’ concern themselves with information regarding the risks associated with certain new products. This sort of orientation is often quite appropriate when trying to provide information and encourage the feelings that will influence cognitive control which will in turn reduce stress levels among consumers. When marketers want to introduce their new products in cultures with a long-term orientation they should be informed about influences. They should keep in mind that fact that consumers tend to be influenced by the informational and normative influences and thus they should be taken advantage of. Indeed, this research has provided me with more insights concerning how marketers need to be aware of the culture that they intend to penetrate new products into.
References
Aaker D. & Kumar, V. & Day, G. (2004). Marketing Research. New Jersey: John Wiley & Son.
Bearden, William & Calcich, Stephen . & Netemeyer, Richard. & Teel, Jesse. (1986), An
Exploratory Investigation of Consumer Innovativeness and Interpersonal Influences,
Advances in Consumer Research, 13, 1, 77-82.
Bearden, William. & Netemeyer, Richard. & Teel Jesse. (1989), “Measurement of
Consumer Susceptibility to Interpersonal Influence”, Journal of Consumer Research,
15, 4, 473-482.
Burnkrant, Robert. & Cousineau, Alain. (1975), “Informational and Normative Social
Influcence in Buyer Behavior”, Journal of Consumer Research, 2,3, 206-215.
Berg, Bruce.(2001). Qualitative Research Methods for the Social Sciences. Boston: Allyn
and Bacon.
Czinkota, M. (2001). Global Business. Orlando:Harcort.
Clark, Ed. “Speak Local, Brand Global.” Brandspeak. Retrieved from
<http://www.brandchannel.com/brand_speak.asp?id=18>.
Goldsmith, Ronald. & Leisa R. & Goldsmith, Elizabeth.(2003), “Innovative
Consumers and Market Mavens”, Journal of Marketing Theory & Practice, 11 4,
54-64.
Georgia, Bonny. (1999). “The World is your Marketplace.” Home Office Computing Nov.
108-109.
Hall, Edward.(1976). Beyond Culture. New York: Doubleday.
Hofstede, Geert. (2001), “Culture’s Consequences: Comparing Values, Behaviors,
Institutions, and Organizations across Nations” New York: Sage Publications.
Herbig, Paul.(1998). Handbook of Cross-Cultural Marketing. New York: The International
Business Press.
Sekaran,Uma. (2003), “Research Methods for Business: A skill Building Approach”, New York: John
Wiley Sons.
Laroche, M . & Papadoulos, N. & Heslop, L.& Bergeron, J., (2006). “Effects Of Subcultural Differences On Coutry And Product Evaluations”, Journal of Consumer Behavior, 2, 232-247.
Lewis, Keith. & Matthew, Housden.(1998). An Introduction to International Marketing, A
Guide to Going Global. London: Kogan Page Limited.
Lowrey, TinA. (1991), “The use of Diffusion Theory in Marketing: A Qualitative
Approach to Innovative Consumer Behavior”, Advances in Consumer Research, 18
1, 644-650.
Leon, G. & Leslie, Lazar.(2004), “Consumer Behavior”, New York: Prentice Hall.
Mugenda, Olive. & Mugenda. Abel. (2003). Research Methods: Quantitative & Qualitative Approaches. Nairobi. Acts Press.
Rorty, Richard. (1991). “Letter 4.” Cultural Otherness. Ed. Anindita Niyogi Balslev.
Atlanta: Scholars Press.
Schuster, Camille P.& Phil Harris. (1999). Newer Insights into Marketing: Cross-Cultural
and Cross-National Perspectives. New York: International Business Press,
Tellefsen, Thomas. & Hirokazu, Takada. (1999), “The Relationshipbetween Mass Media
Availability and the Multicountry Diffusion of Customer Products,” Journal of
International Marketing, 7 1,77–96.
The Impact Of Corporate Social Responsibility Practices On Customer Loyalty Of Haier Group In China Market
The Impact Of Corporate Social Responsibility Practices On Customer Loyalty Of Haier Group In China Market
Contents
TOC o “1-3” h z u HYPERLINK l “_Toc376332761” 1.0 CHAPTER ONE: INTRODUCTION PAGEREF _Toc376332761 h 1
HYPERLINK l “_Toc376332762” 1.1 Background Information PAGEREF _Toc376332762 h 1
HYPERLINK l “_Toc376332763” 1.2 Rationale PAGEREF _Toc376332763 h 4
HYPERLINK l “_Toc376332764” 1.3 Research Aim and Objectives PAGEREF _Toc376332764 h 5
HYPERLINK l “_Toc376332765” 1.4 Structure of the Study PAGEREF _Toc376332765 h 6
HYPERLINK l “_Toc376332766” 2.0 CHAPTER TWO: LITERATURE REVIEW PAGEREF _Toc376332766 h 7
HYPERLINK l “_Toc376332767” 2.1 Theoretical Review Concerning Customer Loyalty PAGEREF _Toc376332767 h 7
HYPERLINK l “_Toc376332768” 2.1.1 Definition of Customer Loyalty PAGEREF _Toc376332768 h 7
HYPERLINK l “_Toc376332769” 2.1.2 Dimensions of Customer Loyalty PAGEREF _Toc376332769 h 8
HYPERLINK l “_Toc376332770” 2.1.3 Factors Influencing Customer Loyalty PAGEREF _Toc376332770 h 11
HYPERLINK l “_Toc376332771” 2.2 Theoretical Review Concerning Corporate Social Responsibility PAGEREF _Toc376332771 h 12
HYPERLINK l “_Toc376332772” 2.2.1 Definition of Corporate Social Responsibility PAGEREF _Toc376332772 h 12
HYPERLINK l “_Toc376332773” 2.2.2 Aspects of Corporate Social Responsibility PAGEREF _Toc376332773 h 12
HYPERLINK l “_Toc376332774” 2.2.3 Practices of Corporate Social Responsibility PAGEREF _Toc376332774 h 14
HYPERLINK l “_Toc376332775” 2.3 Influence of Corporate Social Responsibility Practices On Customer Loyalty PAGEREF _Toc376332775 h 17
HYPERLINK l “_Toc376332776” 2.3.1 Community Support and Customer Loyalty PAGEREF _Toc376332776 h 17
HYPERLINK l “_Toc376332777” 2.3.2 Employee Relations and Customer Loyalty PAGEREF _Toc376332777 h 19
HYPERLINK l “_Toc376332778” 2.3.3 Product and Service Oriented Responsibility and Customer Loyalty PAGEREF _Toc376332778 h 20
HYPERLINK l “_Toc376332779” 2.3.4 Environment Support and Customer Loyalty PAGEREF _Toc376332779 h 21
HYPERLINK l “_Toc376332780” 2.4 Summary PAGEREF _Toc376332780 h 22
1.0 CHAPTER ONE: INTRODUCTION
1.1 Background Information
The entry into the World Trade Organisation (WTO) in 2001 opened many opportunities for Chinese companies. This entry was flagged by the 1979 government-sponsored open door policy. This policy catapulted Chinese companies to global fame in terms of their ability to export high quality products to overseas markets. One of the most notable developments since the start of the open door policy and the subsequent entry into the WTO is the expansion and diversification of the local home appliances market (Fernadez & Fernadez-Stembridge, 2006).
Broadly, the Chinese home appliances market has grown tremendously since 1979. The demand for critical home appliances such as washing machines, refrigerators, vacuum cleaners, television sets, and audio equipments has been amazing compared to the situation before 1979 (Zhang, 2011). Major manufacturers and retailers of home appliances such as Haier and Gome have shown phenomenal growth in both local and international markets (Li, 2005). This however is coming at a time when both local and international markets are beginning to slow down courtesy of the ongoing market recovery slow-down (Zhang, 2011), stiff competition among major players (Li, 2005), and the saturation of major markets due to unfavourable demographic factors such as stagnant population growth and changing social values (Zhang, 2011).
Nevertheless, home appliances continue to occupy the leading position among Chinese consumer market products. Specifically, white goods are the most popular trade goods in the country (Li, 2005). This has contributed to the maturity of the Chinese home appliances industry to the levels of most European and American standards – it has formed a robust industrial chain that consists of large manufacturing and retailing industrial outlets out to promote economic development sustainable healthy lifestyles among consumers (Zhang, 2011).
Based on recent data gathered and analysed by the National Bureau of Statistics between January and June 2009, the local home appliances manufacturing industry registered a total output of 353.4 billion Yuan, with total sales amounting to 343.65 billion Yuan (Hao, 2012). During this period, the overall washing machine production output amounted to over 20,056, 000 units (4.1 percent growth), refrigerators amounted to 30,044,000 units (9.2 percent growth), home freezer output grew to 6,332,400 units (9.6 percent growth), colour television output was 41,742,000 units (1.3 percent) mobile handsets output was 267,881,500 units (5.1 percent decrease), air-conditioning equipments amounted to 45,328, 000 units (20 percent decrease), computer machine output was 76,623,300 units (10.9 percent growth). The overall industrial output was 68.62 billion Yuan (Hao, 2012), a relatively stable growth given the prevailing economic and demographic conditions.
Analytically, the Chinese home appliance industry has shown strong momentum and stability in recent years. This strong market stability has been buoyed by the Chinese government’s strategy to pump in 4 trillion Yuan in support of locally owned industries to make them more competitive at the face of large multinational companies such as LG, Sony, and Samsung (Li, 2005). Moreover, this market momentum has been buoyed by the decision by the Chinese government to offer subsidies to local companies that engage in energy efficient manufacturing practices such as triple energy air-conditioning as well as those who venture into the global markets (Fernadez & Fernadez-Stembridge, 2006). As a matter of fact, China has encouraged its companies to venture into the international market through subsidies as well as by improving its overall international business reputation. Overall, the Chinese home appliances industry is currently in a critical phase of its growth (Zhang, 2011). The demand for home appliances in both rural and urban markets is low yet robust – the rural market has been opened up following many infrastructural developments undertaken in the marginalised regions (Li, 2005). Urban markets on the other show signs of saturation but it is still robust following the increase in urban population.
Both the local and international market for home appliances have been opened and diversified to accommodate new home appliances. For instance, between 1989 and 2000, there was a 101 times growth in the world’s possession of home refrigerators in the local market. This growth was flagged by a 78.14 percent annual growth. The world’s washing machines possession rose by 287 times buoyed by a 102.88 percent growth. From a domestic standpoint, the possession of household refrigerators increased by a 92.23 margin while that of washing machines grew at a margin of 84.82 percent (Hao, 2012). A large chunk of this growth, about 90 percent of the industry’s total sales was made up by the major home appliances such as Coloured TV, washing machine, microwaves and air conditioners.
Historically, the Chinese household appliances can be broken down into four major phases. The first phase started in 179 and ended in 1983. This phase was also known as initial development stage. The second phase was referred to as the fast-growing stage and started in 1984 and ended in 1988. The third phase was the stable adjustment stage and started in 1989 (Li, 2005). This is the ongoing phase and it is characterised by low demand and market consolidation among the leading manufacturers (Zhang, 2011). Overall, the leading manufacturers of home appliances have consolidated their market share through capitalistic synergy building strategies such as mergers and acquisitions and supply chain partnerships. Haier, for instance, has acquired many local manufacturers of home appliances and has also entered into many mergers to boost its overall market standing in the local and international markets. The company merged with Germany’s Liebherr Group in the 1980s and has since acquired local companies such as Qingdao Electroplating Company, Qingdao Air Conditioner Plant, Red Star Electric Appliance Factory, and Huangshan Electronics Group (Haier, 2012). This has catapulted it to great heights and currently the company occupies the largest market share in the domestic home appliances market.
The growth in the domestic demand for home appliances can be attributed to a robust economy and change in consumption habits. According to Kotler (2008), the development of consumer products industries in emerging markets is usually occasioned by increase in disposable income and shift from traditional ways of life to modern ways. As a matter of fact, the most important of the factors influencing the recent developments in the Chinese household appliances is the large growth in the phenomenal household income (Li, 2005). This large income growth has been as a result of various government economic and socio-cultural programmes that have increased employment and investment opportunities while decreasing inflation rates. Currently, the Chinese economy is relatively stable compared to what is happening in the international landscape.
On the other hand, the opening up of Chinese culture to accommodate western cultural values has led to change in consumption habits among Chinese households. Currently, there is more inclination to leisure spending than any other time in the history of Chinese economy. Both urban and rural households tend to spend a big chunk of their disposable income buying non-basic commodities such as television sets, smart phones, washing machines, and home freezers (Zhang, 2011). Moreover, there is demand for high-end and efficient products that can improve the quality of life experiences among Chinese households. Following this phenomenal change in economic and social fortunes, it is expected that the demand for high-end home appliances will definitely rise to cushion the high production costs incurred by large manufacturers such as Haier.
1.2 RationaleA desk survey conducted by the researcher unearths many studies addressing the relationship between CSR practices and customer loyalty. The most comprehensive and recent of these studies is done by Mandhachitara and Poolthong (2011) who divide CSR practices into four major components of community support, employee relations, product and service-oriented, and environment support. The authors then show that these practices shape customer’s attitudinal loyalty. On their part, Carroll (1991), Mohr et al. (2001), del Mar Garcia de los Salmones et al. (2005), Maignan (2001), and Matten and Crane (2005) show that CSR comprise of economic, legal, ethical, and discretionary functions. The authors argue that these practices enhance customer loyalty and firm’s profitability.
On their part, Ailawadi et al. (2011) and Luan and Ailawadi (2011) find that though not all CSR practices lead to customer loyalty, those CSR practices related to products and the employees who directly serve consumers enhances loyalty. On his part, Kotler (2008) argues that a socially responsible firm is responsive to its stakeholders and many firms today employ CSR as part of their customer retention efforts. On their part, Berens et al. (2007), Bhattacharya and Sen (2003), Folks and Kamins (1999), Lichtenstein et al. (2004), Luo and Bhattacharya (2006), and Mohr et al. (2001) reason that CSR practices have a direct influence on consumer attitudes towards a particular firm and its products.
Nevertheless, there is a shortage of empirical studies tackling the relationship between CSR and customer loyalty from a Chinese home appliances perspective in general, and from Haier standpoint in particular. Even the studies that address Haier as a leading market player in China do not factor in the relationship between CSR and customer loyalty. For instance, in his Bachelor’s thesis, Yidan (2009) finds the correct brand building strategy Haier’s globalisation pursuits. It is therefore important to study how CSR, a proven critical customer retention strategy applies in the case of Haier and how such CSR practices can be better employed by the company for better results.
1.3 Research Aim and ObjectivesThis study aims to investigate and report the impact of CSR practices on customer loyalty of Haier Group in China market. From this overarching aim, the study will also pursue the following objectives:
Analyse the impact of community support on customer loyalty in Haier;
Analyse the impact of employee support on customer loyalty in Haier;
Analyse the impact of product and service oriented responsibility on customer loyalty in Haier;
Analyse the impact of environment support on customer loyalty in Haier;
1.4 Structure of the StudyThis study is structured into five main chapters. The first chapter offers a general overview of the Chinese home appliances industry – it presents a comprehensive account of the history and future as well as the present developments of the industry in the face of the ingoing economic and social developments such as local and global economies, changing consumer habits and strategies employed by large home appliances manufacturers such as Haier to enhance customer loyalty. The second chapter covers the dynamics of CSR as it pertains to the case of Haier. This chapter is divided into three main sections. The first section addresses customer loyalty, the second section addresses CSR, while the last section addresses the relationship between CSR practices and customer loyalty.
The third chapter covers the study methods and methodology. Here, the study philosophy, approach, strategy, sampling methods and methods of data collection and analysis are addressed. In addition, the chapter covers the ethical obligations and the limitations experienced during the course of the study. The fourth chapter is perhaps the most important because it presents in a detailed and structured manner, the findings of the study as well as the discussions underpinning such findings. Finally, the fifth chapter wraps up the study findings and offers a set of recommendations on how Haier can employ the various components of CSR to enhance customer loyalty.
2.0 CHAPTER TWO: LITERATURE REVIEW
2.1 Theoretical Review Concerning Customer Loyalty2.1.1 Definition of Customer Loyalty
Customer loyalty involves attracting customers, encouraging them to purchase much often, making them to purchase in large quantities, and encouraging them to make successful purchase referrals (Kotler, 2008; Mandhachitara and Poolthong, 2011; Schlesinger & Heskett, 1991). Organisations build customer loyalty through keeping a good rapport with their customers through constant communication, creating a team of competent and well motivated employees (Schlesinger & Heskett, 1991), showing care and empathy towards customers by partaking of activities that add value to their lives (Luan & Ailawadi, 2011), and rewarding customers regularly for shunning competing products (Kotler, 2008; Kotler & Armstrong, 2008).
2.1.2 Dimensions of Customer Loyalty
Normally and as Mandhachitara and Poolthong (2011) find, there are three core models of customer loyalty. These three models amount to measures used by marketers in evaluating the propensity for customers to buy again and bring their friends with them when making repeat purchases. These are “attitudinal, behavioural and combinational loyalty measures” (p.122). The main contention underpinning the attitudinal, behavioural and combination models is that customer attitudes towards a product influence their purchasing behaviours (Kotler & Armstrong, 2008). The attitudinal approach contends that for customer loyalty to be sustained in the long run there must be a strong attitudinal commitment or genuine consumer intentions to purchase a specific product or service from a specific firm (Jacoby & Chestnut, 1978; Uncles & Dowling, 2003). On the other hand, behavioural approach posits that behavioural indicators such as the propensity to exclusively purchase from a certain firm as may be shaped by attitudes towards that firm is critical for the enhancement of genuine consumer loyalty (Chaudhuri & Holbrook, 2001). As the name suggests, the combinational model is derived from both attitudinal and behavioural approaches. It posits that the propensity to make a repeat purchase is determined by the expectations customers have on a certain product and the ability for them to affiliate the quality of a certain product with their expectations (Kolter & Armstrong, 2008).
Other models include the service quality model advanced by Storbacka, Strandvik and Gronroos (1994). This model posits that customer satisfaction is a function of recent experiences about a certain product or even a service – the more the recent experiences surpass customer expectations, the more the customer loyalty, the more strong the relationship, the more the customer loyalty (Dawkins & Reichheld, 1990). This is an indicator that customer loyalty can still be achieved even with low quality products especially when customer expectations are low or when the price of the product is low compared to its performance (Storbacka et al., 1994). This approach holds that the strength of business relationships is a function of customer satisfaction. Such satisfaction is built around the quality of a product, the quality of stakeholders’ relationships, and the consumer commitment towards a product (Buchanan & Gilles, 1990). Overall, so as to achieve a sustainable customer loyalty firms should ensure their products are relevant to their consumers experiences all the time, their consumers stay within their operation regions, there no suitable alternative products, and that there no unexplainable price changes.
Another popular customer loyalty model is the loyalty business model. This model can be described to be more of a strategic management strategy than a marketing one. This is because it is argues that customer loyalty is a long term strategic competitive advantage gimmick and should therefore be built around a company’s core resources, core capabilities and core competences (Mandhachitara & Poolthong, 2011). Moreover, this model argues that customer loyalty is a corporate strategy that helps organisations to achieve corporate goals (Kotler & Armstrong, 2008).
According to Figure 2.1.2.1 below, customer loyalty can be described as a multidimensional approach. It is multidimensional because it incorporates the gains made in the realms of product and service delivery, employee satisfaction and competence, customer satisfaction, product of prices, and relationship with the local communities (Schlesinger & Heskett, 1991). This model perceives customer loyalty to be a gradual process that begins from how a product or a service is presented in the market, the ability of such product to satisfy customer needs, and the ability of the customers to keep coming back for more or the product or service, and the overall impact of such repeat purchases on a firm’s profitability.
Figure 2.1.2.1 A Typical Customer Loyalty Model.
Source: Schlesinger and Heskett (1991).
However, for purposes of this dissertation, the combination loyalty measure of customer loyalty as argued by Mandhachitara and Poolthong (2011) will be employed. The decision to pursue this measure is based on the fact that it captures two main determinants of consumer decisions. Specifically and as Mandhachitara and Poolthong (2011) argue this measure captures the product quality and CSR constructs. Reliable evidence show that product quality and CSR have been noted to be major profitability constructs in a high competitive and saturated home appliances market (see for example Chaudhuri & Holbrook, 2001; Kotler, 2008; Jacoby & Chestnut, 1978; Kotler & Armstrong, 2008; Mandhachitara & Poolthong, 2011).
Moreover, behavioural and attitudinal models have weaknesses. Each of them cannot independently explain the reasons behind loyalty in an exhaustive manner. Attitudinal model for instance only shows the attitudes customer build towards a product but does not explain why such attitudes are built (Chaudhuri & Holbrook, 2001). On the other hand, behavioural approach explains why these attitudes are formed but does not explain how they are formed. A combination approach is therefore the most suitable for this study. Moreover, though each of these three models is independent, they are in most cases perceived to be interlocking. They are interlocking because they are built on each other – the combination model for instance is built on both attitudinal and behavioural models (Mandhachitara & Poolthong, 2011).
The above arguments are derived from Kotler and Armstrong’s (2008) position that customer loyalty is a critical facet of today’s marketing strategies that help firm’s to achieve long term competitive advantage. This is so since Jacoby and Chestnut (1978) posited that “the success of a brand in the long term is not based on the number of consumers that buy it once, but on the number of consumers who become regular buyers of the brand” (p.1). This is true since organisations incur more costs in obtaining one new customer than retaining an existing customer and that profitability increases with the increase in customer loyalty (Chiou & Droge, 2006).
2.1.3 Factors Influencing Customer LoyaltyThe combination model of customer loyalty adopted by this study argues that customer loyalty is determined by attitudinal and behavioural factors. The behavioural measures include the propensity to make repeat purchase, the propensity to make exclusive purchase, and the propensity to spread a good word about a production among friends. On the other hand, the attitudinal indicators include the level of commitment, the intention to buy, and the intention to spread a good word about a product (Chaudhuri & Holbrook, 2001). These measures are occasioned by among other things the quality of the existing relationships between firms and their consumers, the quality of products, the prices of products, lack of suitable substitute products, proximity of products/firm to the customers, and the perceived relevance of products.
Several studies have acknowledged that customer loyalty is enhanced by the quality of a product – a high quality product will attract more repeat customers while low quality ones will not (see for example, Berens et al., 2005; Carroll, 1999; Chiou and Droge, 2006; Mandhachitara & Poolthong, 2011 and Maignan, 2001). Several studies too argue that the relationship between firms and their customers, lack of suitable substitute products, proximity of products/firm to the customers, and the perceived relevance of products are responsible for increased customer loyalty (see for example Buchanan & Gilles, 1990 and Storbacka et al., 1994). The studies posit that the propensity for customers to make repeat purchases is shaped by their expectations which in turn are advised by product-related factors.
Moreover, other studies posit that customer loyalty is shaped by the prices of products. For instance, Storbacka (1994) argues that highly priced products rarely attract repeat purchase unless they are perceived to be of excellent quality. On the other hand, it has been argued that lowly priced products tend to attract repeat customers especially when the customers perceive the quality of the products to be irrelevant to the purpose they serve (Chiou and Droge, 2006; Mandhachitara & Poolthong, 2011). This is true especially for basic commodities like food stuff among poor communities who have few choices, if any when fulfilling their daily needs.
2.2 Theoretical Review Concerning Corporate Social Responsibility2.2.1 Definition of Corporate Social ResponsibilityCSR is a self-regulating obligation fulfilled by firms to a set of legal and ethical standards informally set forth by stakeholders. According to Mandhachitara and Poolthong (2011), CSR comprises of four major components of practices which are aimed at enhancing community support, employee relations, quality of products and services, and environmental support. On their part, Carroll (1991), Mohr et al. (2001), del Mar Garcia de los Salmones et al. (2005), Maignan (2001) and Matten and Crane (2005) show that CSR comprise of economic, legal, ethical, and discretionary functions. On the other hand, Berens et al. (2007), Bhattacharya and Sen (2003), Folks and Kamins (1999), Ailawadi et al. (2011), Kotler (2008), Kotler and Armstrong (2008), Lichtenstein et al. (2004), Luan and Ailawadi (2011), Luo and Bhattacharya (2006), and Mohr et al. (2001) reason that CSR Comprise of a set of social and moral obligations to their stakeholders. Overall, these authors agree that CSR practices have a direct influence on consumer attitudes towards a particular firm and its products.
2.2.2 Aspects of Corporate Social ResponsibilityTwo major aspects can be drawn from the above operational definitions of CSR. These aspects are based on the notion that CSR is a voluntary yet a necessary strategic competitive advantage-building tool that determines firm’s long term survival in a competitive and unpredictable business world (Kotler, 2008). BDA (2006) offers that the two major aspects of CSR are its ability to lobby national and international policy makers in ensuring that companies remain committed to their voluntary social obligations as well as its ability to offer non-obligatory advice and other informational support to companies so as to help them become committed to their social obligations without having to explicitly stipulate a specific code (Ailawadi et al., 2011). The authors suggest that CSR can be described in terms of its voluntary approach and its ability to turnaround company’s fortunes through relationship building.
From these two major aspects, a number of minor issues emerge. These minor aspects include the fact that CSR is voluntary, it helps organisations to achieve competitive advantage, it helps organisations to relate well with their society, it is a form of long term strategic driver among large multinational companies such as Haier, and there are no “best” CSR practices (BDA, 2006). Companies are not required by any existing law to honour their CSR obligations yet cases of huge sponsorship deals litter the corporate world today. Wal-Mart, for instance spent about $512 million between February 2009 and January 2010 on CSR activities (Ailawadi et al., 2011). It has been shown in earlier parts of this study that companies do this with the hope of improving their public image, increasing market share, and building good relationships with their stakeholders.
However, how each company undertakes their CSR obligations differs across the corporate divide. While western companies are known for their generous philanthropic contributions to the society, Asian and African companies have a rather laid back approach. Reliable evidence shows that this difference is as a result of the market maturity, competition as well as the increased participation by social organisations such as labour unions, consumer watch groups, media bodies, environmental groups, and government agencies (Jamali, Safieddine, & Sabbath, 2008; O’Laughlin, 2008). The western market is more open to criticism than its Asian and African counterparts – there is immense media scrutiny in the western world than there in Asian and African countries (BDA, 2006). For instance, large multinational companies such as BP and its subsidiaries have been on the recovering end in the recent years for alleged poor working conditions and poor operating processes that endanger the environment yet Chinese energy firms have the worst work conditions and environment conservation records but they continue to make good business especially in their Asian and African based operations. While drawing from the fact that CSR is a form of capitalistic market penetration strategy (Kotler, 2008; Kotler & Armstrong, 2008), it is arguable that, large Chinese firms such as Haier which were initially owned by the state and are still considered as partly-private and partly-public may feel less obligated to fulfil their CSR obligations as they enjoy state patronage and a monopolistic market dominance.
On a different note, it is arguable that the impacts of CSR efforts differ across the market divide. CSR efforts carried out by multinational companies operating in emerging countries such as China with pressing social issues related to disease, security, child labour, and poor education and health standards may not be easy to quantify when compared to the case in the western world with strong social systems – a CSR budget of say, $2 billion in China will make little impact compared to a similar budget in the western world (BDA, 2006). Overall, CSR is becoming a major theme among leading multinational companies with a footprint in both mature and emerging markets (O’Laughlin, 2008). Even in Asian and African markets where western and local companies have been in the past somehow relaxed to undertake huge CSR projects, trends are changing and companies are sponsoring large projects such as green energy, disease control and eradication as well as infrastructure development.
2.2.3 Practices of Corporate Social ResponsibilityCSR practices can be grouped into four main components. This grouping is advised by Mandhachitara and Poolthong (2011) arguments that CSR is meant to serve four major stakeholders which are the consumers, immediate community, employees, and the environment. Analytically, these four major stakeholders comprise of the four major components of CSR which according to Mandhachitara and Poolthong (2011) are community support, employee relations, product and service-oriented, and environment support. Overall, it is arguable that CSR practices covered in Mandhachitara and Poolthong (2011) model as well as in other models seek to create a friendly business climate that allow for maximisation of profits while making the world a happy place to live in.
Each of these four components is broken further to include other specific practices. As Figure 2.2.2.1 below shows, community support is divided into five specific practices of donations made charities, help to the disadvantaged, disaster relief, anti-drug campaigns, and provision of education scholarships (Mandhachitara & Poolthong, 2011). On the other hand, employee relations is divided into four specific practices of provision of safe working environment, support to employees family values, provision of fair compensation, and upholding of the equal employment opportunities policies (Mandhachitara & Poolthong, 2011). Product and service-oriented practices are broken down into two specific practices of provision of quality products and services as well as the provision of customer-satisfying products and services (Mandhachitara and Poolthong (2011). Lastly, environment support practices can be conceptualised into three specific activities of support to forest preservation efforts, support to environmental preservation efforts and support extended to water resources preservation efforts (Mandhachitara & Poolthong, 2011). These specific practices can be assumed to be the benchmarks against which organisational competitive advantage should be measured. Since customer loyalty is one of the major facets of competitive advantage, then it is right to clarify that the specific practices builds to customer loyalty.
Figure 2.2.2.1: A Typical CSR Mo