Gies College of Business Study: How Luxury Brands Can Successfully Integrate Corporate Social Responsibility

A University of Illinois professor is proposing a solution that could help the world's most luxurious brands join the CSR movement

Carlos Torelli

Corporate social responsibility (CSR) is becoming an important marketing tool; many consumers today expect corporations to prioritize the well-being of society and the world around them. Historically, luxury brands have failed to successfully incorporate CSR initiatives, largely because they promote two seemingly incompatible values: self-enhancement (which is promoted by luxury brands) and self-transcendence (benevolence and social concern shared by those pushing corporate social responsibility). Now, for the first time, a University of Illinois professor is proposing a solution that could help the world’s most luxurious brands join the CSR movement. In their study “Value instantiation: how to overcome the value conflict in promoting luxury brands with CSR initiatives,” Gies Business professor Carlos Torelli and his coauthors provide a roadmap to help luxury brands successfully integrate CSR into their corporate strategy.

“Luxury brands have traditionally lagged behind in CSR for natural reasons,” said Torelli, professor of business administration and an expert in global brand management. “When we think about brands through a value-based framework in that the values brands endorse are the same values people endorse, it becomes clear that self-enhancement and self-transcendence are not compatible. This is why CSR actions sometimes backfire because they promote these incompatible values. This is a big reason why luxury brands are some of the last to come to this game.”

So what can luxury brands do to successfully incorporate CSR into their marketing strategies? Torelli’s research introduces two approaches to bringing self-transcendence values into a culture of self-enhancement. The first is showing consumers an example of a successful celebrity who is synonymous with philanthropic activities. In this study, when participants were presented with the example of Brad Pitt and Angelina Jolie, who regularly engage in philanthropy, they responded more positively to the luxury brand they were evaluating.

The second tactic is encouraging consumers to visualize themselves engaging in philanthropic activities while also pursuing self-enhancement values. When consumers were told that purchasing “your own” pair of luxury sunglasses can help out others in need, they responded more favorably to the luxury brand in question.

Torelli offers two strategies for luxury brands. The first is utilizing a celebrity spokesperson, who is also famous for philanthropy, like Bill Gates or Oprah Winfrey. The second is using a sub-brand that is easily differentiated from the main brand. It’s a good way to segment the customer base and expose CSR to the segment of consumers most likely to respond favorably.

“This is not a short-term strategy,” Torelli cautioned. “Companies need to show that they’re committed to this cause over the long run. They also need to be careful in designing and communicating the campaign.”

Media Contact: Aaron Bennett | aaronb5@illinois.edu | 217-300-8124

Source: Gies College of Business

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Categories: Corporate Social Responsibility

Tags: corporate social responsibility, luxury brands, marketing