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-Master Thesis-

Consumer Behaviour Analysis in Relation to CSR Activities of Cosmetics Brands

Students: Alev Selbes & Samira Mohamed Master of Science in Marketing Advisor: Karen Bruns, Professor PhD 30.08.2010 rhus School of Business Department of Marketing and Statistics

Abstract
Corporate Social Responsibility (CSR) has become an important topic in recent years, especially within the cosmetics industry. The consumers are becoming more involved with CSR and the demand for socially responsible brands is increasing. On the other hand, cosmetics brands are implementing more and more CSR activities. This paper focuses on the CSR activities of the cosmetics brands and how they affect consumer purchase behaviour. A qualitative research has been conducted, which consisted of in-depth interviews with cosmetics consumers and an interview with Estee Lauder Companies. Consumers find CSR an important topic in the cosmetics industry and would to like to see more socially responsible cosmetics brands. They would like to be informed more about what the cosmetics brands are actually doing in terms of social responsibility. However, they would like to be persuaded in a way that the CSR activities of the cosmetics brands are really meant to improve the society and the environment, not just used as a marketing tool. When it comes to buying cosmetics brands; quality, price and ingredients are considered to be the main purchase factors by consumers. However, it can be stated that even though CSR is not considered to be a purchase factor, it does have a significant impact on the purchase decisions. When it comes to purchasing cosmetics products, the majority of the consumers are searching for products that are fragrance free and allergy tested, and that do not contain unhealthy chemical additives (in relation to the purchase factors ingredient and quality). These issues are part of the environmental responsible activities that are provided by several green cosmetics brands, such Clinique and Aveda.

The cosmetics brands consider CSR as a way to differentiate themselves from their competitors in order to gain competitive advantage and to raise brand awareness. However, the activities need to be in alignment with the identity and the image of the brand. In this way, CSR activities contribute to the brand image while increasing the credibility of these activities in the consumers mind. Moreover, it is necessary for the cosmetic brands to communicate their CSR activities to the consumers, in order to inform them continuously and make them aware about the CSR commitment of the brands. In addition, the cosmetics brands can cooperate together through certain CSR initiatives in order to increase the credibility of the importance of CSR in the cosmetic industry. The industry initiatives raise CSR awareness and support the overall image of the cosmetics industry as well as the image of the cosmetics brands.

Acknowledgements
This thesis has been written as part of our Master of Science in Marketing study at the Aarhus School of Business, Aarhus University.

It was a challenge to pursuit and to determine the specific problems of the subject we have chosen for our thesis in the context of its complexity. Furthermore, searching and receiving the relevant information turned out be a great challenge as well. However, working on our thesis has been a great learning experience. We were able to explore and gain more knowledge about Corporate Social Responsibility in the cosmetics industry. We would like to thank Aarhus School of Business and our supervisor Karen Bruns for their time and support during our thesis period. Karen spent time and effort giving us useful feedback and support in our research. We would also like to thank Estee Lauder Companies for their contribution to our thesis. Especially our interview with Isabel Martin was very valuable for us in order to understand the importance of CSR from commercial point of view. We are grateful for her time and assistance.

Finally, we would like to thank our families for their support and all the consumers who participated in the in-depth interviews. Without them, this thesis would not have been completed.

Alev Selbes & Samira Mohamed Brussels, 26th of August, 2010

Table of Contents
1. INTRODUCTION ......................................................................................................................................... 1 1.1 BACKGROUND ...........................................................................................................................................................1 1.2 PROBLEM IDENTIFICATION....................................................................................................................................2 1.3 PROBLEM STATEMENT............................................................................................................................................3 1.4 STRUCTURE ................................................................................................................................................................4 1.5 DELIMITATIONS ........................................................................................................................................................5 2. LITERATURE REVIEW ............................................................................................................................ 6 2.1 DEFINING CSR ..........................................................................................................................................................6 2.1.1 Definition of CSR .................................................................................................................................................... 6 2.1.2 The Evolution of CSR ............................................................................................................................................ 6 2.1.3 Reasons to Implement CSR ................................................................................................................................. 7 2.2 ACTIVITIES OF CSR .............................................................................................................................................. 13 2.2.1 Internal and External CSR Activities ...........................................................................................................13 2.2.2 The 3C-SR Model..................................................................................................................................................16 2.3 CSR AND INNOVATION ........................................................................................................................................ 17 2.3.1 CSR-driven Innovation .......................................................................................................................................17 2.3.2 The Cosmetics Industry ......................................................................................................................................18 2.4 DEVELOPMENT OF CSR....................................................................................................................................... 19 2.4.1 Current Developments of CSR and Consumer Behaviour ...................................................................19 2.5 CSR AND CONSUMER BEHAVIOUR .................................................................................................................. 21 2.5.1 Need Recognition ..................................................................................................................................................21 2.5.2 Information Search ..............................................................................................................................................22 2.5.3 Evaluation of Alternatives.................................................................................................................................23 2.6 THEORETICAL FRAMEWORK .............................................................................................................................. 24 3. METHODOLOGY ..................................................................................................................................... 25 3.1 RESEARCH PURPOSE............................................................................................................................................. 25 3.2 RESEARCH APPROACH ......................................................................................................................................... 25 3.2.1 In-depth Interviews ..............................................................................................................................................26 3.3 RESEARCH DESIGN ............................................................................................................................................... 26 3.3.1 Company Interview ..............................................................................................................................................28 3.4 ANALYTICAL APPROACH .................................................................................................................................... 30 4. COMPANY ANALYSIS ........................................................................................................................... 34 4.1 COMPANY BACKGROUND AND HISTORY ....................................................................................................... 34 4.1.1 Isabel Martins Background ............................................................................................................................35 4.2 CSR AS A COMPANY CULTURE......................................................................................................................... 36 4.3 INTERNAL CSR ACTIVITIES ................................................................................................................................ 36 4.4 EXTERNAL CSR ACTIVITIES .............................................................................................................................. 37 4.4.1 Animal testing and product safety .................................................................................................................37 4.4.2 Environmental Activities....................................................................................................................................38 4.4.3 Breast Cancer Awareness Campaign...........................................................................................................39 4.4.4 MAC AIDS Fund ...................................................................................................................................................40

4.4.5 Social Activities of Aveda, Clinique and La Mer.....................................................................................40 4.5 CONSUMER INVOLVEMENT ................................................................................................................................ 41 4.6 COMPETITORS CSR ACTIVITIES...................................................................................................................... 43 4.7 CSR AND INNOVATION ........................................................................................................................................ 43 4.8 FUTURE CSR OPPORTUNITIES........................................................................................................................... 45 4.9 ESTEE LAUDER COMPANIES & 3C-SR MODEL ............................................................................................ 46 4.9.1 CSR Commitment of Estee Lauder Companies ........................................................................................46 4.9.2 CSR Communication of Estee Lauder Companies..................................................................................49 4.9.3 CSR Consistency of Estee Lauder Companies .........................................................................................53 4.10 CONCLUSION ....................................................................................................................................... 55 5. CONSUMER ANALYSIS ........................................................................................................................ 57 5.1 DEMOGRAPHIC ANALYSIS .................................................................................................................................. 57 5.2 ANALYSIS OF COSMETICS BRANDS ................................................................................................................. 57 5.3 COSMETICS BRANDS AND CORPORATE SOCIAL RESPONSIBILITY ......................................................... 59 5.3.1 CSR and The Body Shop ....................................................................................................................................60 5.3.2 CSR and MAC ........................................................................................................................................................62 5.3.3 CSR and Estee Lauder ........................................................................................................................................63 5.3.4 CSR and Clinique .................................................................................................................................................63 5.3.5 Limited CSR Awareness .....................................................................................................................................63 5.4 CSR ADVERTISING AND PERSUASION ............................................................................................................ 64 5.4.1 Persuasion and CSR Driven Cosmetics Brands ......................................................................................66 5.4.2 Consumers CSR Perceptions..........................................................................................................................70 5.5 CSR AWARENESS .................................................................................................................................................. 71 5.5.1 CSR Perceptions towards Information Sources .......................................................................................76 5.5.2 Consumers Value of CSR .................................................................................................................................78 5.5.3 CSR Related Cosmetics Consumptions........................................................................................................79 5.6 LOYALTY ASPECTS OF THE COSMETICS PRODUCTS .................................................................................. 81 5.6.1 Recommendation and Discouragement of Cosmetics Brands ...........................................................84 5.6.2 Loyalty and CSR....................................................................................................................................................86 5.7 BRANDING AND COSMETICS PRODUCTS ........................................................................................................ 87 5.8 CONCLUSION........................................................................................................................................................... 89 6. CONCLUSION ........................................................................................................................................... 92 6.1 OVERALL CONCLUSION....................................................................................................................................... 92 6.2 LIMITATIONS ........................................................................................................................................................... 93 6.3 FURTHER RESEARCH ............................................................................................................................................ 94 REFERENCES ................................................................................................................................................ 96

1. Introduction
The first chapter provides background information regarding the importance of Corporate Social Responsibility in todays world, especially within the cosmetics industry. Furthermore, the purpose of this thesis is described through the problem identification and the problem statement. Lastly, an overview of the thesis structure is shown and the scope the thesis is explained in the delimitation part of the introduction section.

1.1 Background
"A good company delivers excellent products and services, and a great company does all that and strives to make the world a better place." William Ford Jr., Chairman, Ford Motor Co.

Nowadays, Corporate Social Responsibility (CSR) is playing an important role in the rapidly changing global world. In terms of the word change, it can be said that consumers, companies and their strategies as well as the interaction between these two parties are evolving based on the characteristics of the globalization. Consumers are more selective and conscious about the products that they are purchasing and companies are also becoming more responsible about the products that they are producing, supplying and selling. The reasons behind these responsible activities are based on consumer demand, legal requirements that are developing rapidly in the last decade and, the competitive needs of the firms. Hence, CSR is at the intersection area of the debates about globalization, competitiveness and sustainability (COM, 2006).

Although it is hard to give a clear definition of CSR, the European Commission defines CSR as a concept where companies integrate social and environmental concerns in their business operations and interactions with their stakeholders voluntarily (COM, 2006). The voluntary word itself carries great importance since it renders companies to differentiate themselves from the ones, which cannot go beyond obeying the law. Another definition of CSR also overlaps this point of view by defining CSR as actions which appear to further social good, beyond the interests of the firm and the requirements of the law (McWilliams et al., 2001). The first models of CSR were introduced in the 1960s. These models linked the social aspect of CSR directly with responsibilities above and beyond economic and legal obligations (Meehan et al., 2006). Going beyond law can be exemplified as applying progressive human
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resources management programs, developing non-animal testing procedures, recycling, supporting local businesses, abating pollution and embodying products with social attributes or characteristics (McWilliams et al., 2001). Over the past 50 years, these models have been revised and new models emerged to explain the importance and value of CSR for a companys image as well as long-term growth. Also, as mentioned by William Ford, to be a great a company includes striving to make the world a better place. Having a successful CSR strategy is in alignment with striving to reach that goal.

Moreover, in the cosmetics industry it is very important that each and every product of a brand are produced and sold based on the law and the specific health requirements. But besides using the right ingredients and obeying the law, applying CSR is more than that. It is related with caring consumers demand, and the demand of other stakeholders such as employees, investors and the community (McWilliams et al., 2001).

1.2 Problem Identification


Cosmetics companies do not only implement CSR policies to make the world a better place, but also see it as way to achieve more growth and long term profit. In order to be successful in the cosmetics industry, which is growing very fast, it is important to differentiate from the competitors. CSR can be seen as a way of creating competitive advantage and as an innovative way in order to be unique in the market.

Moreover, in the cosmetics industry the CSR agenda is consumer driven whereas in other industries CSR activities are primarily based on compliance and reporting records. Because of this consumer driven aspect, the cosmetics industry is more aware of being socially responsible while launching new products. Consumers are becoming environmental friendly since they are more selective and socially responsible in their choices. They care about where, how and by whom the products are produced. Moreover, it is important for consumers to know what ingredients are used and if they add value to environmental institutions or NGOs by buying the specific product. For example the past couple of years have shown a cosmetics trend of natural and environment friendly products. Consumers have shown an increased interest in botanical extracts, minerals, oils and other natural ingredients. Furthermore, another debated issue is that consumers are also sensitive and responsive to animal testing in the cosmetics industry. If the specific product or brand has a negative reputation in terms of
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animal testing, ingredient quality or environmental unfriendly production processes; consumers are not willing to choose those products.

Also, internal CSR activities are just as important as external activities. For this reason CSR is closely related to employee satisfaction, which is a way of implementing internal CSR activities. Examples of these internal activities are how employees are attached to the brand, how they are trained, how they are treated and the benefits that the company can provide for them such as maternity leave, flexible hours for the working families, promotional opportunities, etc.

It can be said that creating and strengthening a strong brand image are very necessary in the globalized context. Therefore, CSR is a good way to enhance the brand value. Avoiding from irresponsible production processes and employee dissatisfaction will lead a company to a stronger brand image while protecting the brand name from bad reputation. Therefore, it can be concluded that not having the right and sufficient CSR activities/policies within the company may lead to competitive disadvantage. Moreover, competitive disadvantage will harm the brand image and the company will come up with lower profits. In addition, it can be said that since CSR is one of the important sources of innovation, in the long run lacking CSR activities and strategies will lead to company failures.

1.3 Problem Statement


Overall, the reasons mentioned above lead us to research how important CSR can be in consumers buying behaviour in the cosmetics industry. That it is the reason why, we have stated not having the right and sufficient CSR activities as the problem statement of this paper. The report is written from cosmetics companies point of view and how important it is for them to implement CSR activities and use these activities as a possible competitive advantage. Based on this, the central is formulated which is: How do Corporate Social Responsibility activities affect consumers buying behaviour in the cosmetics industry?

The research questions are stated with their sub questions below: RQ1) How do cosmetics brands define CSR? - Can CSR be used as a way to differentiate in the cosmetics industry? - Does CSR-related innovation have an influence on changing consumer behaviour? - How important is the consumer demand for cosmetics brands in terms of CSR activities?

RQ2) How do consumers interpret CSR in the cosmetics industry? - Is CSR an important purchase decision factor for cosmetics consumers? - How influential are the CSR activities in order to create brand awareness? - How influential is the peripheral route of persuasion to raise CSR awareness for the cosmetics brands?

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

Ch. 1 Introduction

Ch. 2 Literature Review

Ch. 3 Methodology

Ch. 4 Company Analysis

Ch. 5 Consumer Analysis

Ch. 6 Conclusion & Recommendation

Figure 1: Thesis Structure

The core of this paper consists of five sections, which are illustrated, in Figure 1. In the literature review, secondary data concerning CSR, consumer behaviour and the cosmetics industry are analysed. Furthermore, the methodology provides an overview of the chosen research approach and the research design. In addition, the company and consumer analyses
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are provided in order to understand how companies define CSR and how consumers interpret CSR. After the company analysis and the consumer analysis parts, which means after answering the research questions, an answer is given to the central question How do Corporate Social Responsibility activities affect consumers buying behaviour in the cosmetics industry? The answer of the central question is based on the results of the interviews and the analyses. Finally, recommendations are given on how companies can raise CSR awareness and how CSR can be more influential on consumers buying behaviour.

1.5 Delimitations
This thesis focused on the central question and the research questions that are formulated above and did not take other factors of consumer behaviour in consideration due to lack of time and resources. Furthermore, based on the researchers accessibility, the research was conducted in Brussels while the results were analysed from a companys perspective. The limitations of this thesis are discussed in the 6th chapter of this thesis.

2. Literature Review
2.1 Defining CSR
This paragraph focuses on the definition of CSR, how it evolved over the past 50 years and the reasons as to why companies implement CSR activities. Also, a short overview is given about the role CSR plays in the cosmetics industry.

2.1.1 Definition of CSR Over the years the CSR concept has been defined, redefined and extended. Since the first modern concepts in the 1950s, it can be concluded that there is no single definition of CSR. Many different definitions can be found in existing literature regarding CSR, which come from economists, researchers, organisations, governmental bodies and other institutions concerning the society. The definition that is used throughout this report comes from the European Commission that defines CSR as a concept where companies integrate social and environmental concerns in their business operations and interactions with their stakeholders voluntarily (COM, 2006).

2.1.2 The Evolution of CSR In this paragraph information is given about the several definitions of CSR and how it has evolved throughout the last 50 years. A lot of literature has been written about CSR and every decade has its own ideas and themes related to this concept.

Howard R. Bowen wrote one of the most significant literatures concerning CSR in 1953. In his work he questioned what social responsibilities companies may be expected to assume. Through this question he came up with the following definition of CSR: it refers to the obligation of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objective and values of our society (Carroll, 1999). Archie B. Carroll argued that this definition marks as the beginning of the modern period of literature on CSR and describes Bowen as the Father of Corporate Social Responsibility (Carroll, 1999).

Furthermore, Carroll claims that 1960s marked a significant growth in attempts to formalize, or more accurately, state what CSR means (Carroll, 1999). One of the prominent writers of that time was Keith Davis who defined CSR as decisions and actions taken for reasons that are partially beyond the companys direct economic or technical interest. Davis argued that there is a significant relationship between social responsibilities and the power that companies have over the society.

In the 1970s, more attention was given to stating exactly what the responsibilities of a company were. An example is the emphasis on anticipating and promoting desirable changes in the business-society relationships, which became associated with the term social responsiveness (Meehan et al., 2006). Sethi (1975) formulated a corporate social performance model distinguishing different corporate behaviours. His model consisted of three behavioural approaches that reflect different attitudes towards conducting social responsible activities. These three approaches are social obligation, social responsibility and social responsiveness. The social responsiveness approach is a corporate behaviour in which both societal and economic objectives are achieved while having the obligation to anticipate upcoming social problems and to work actively to prevent them from happening.

Carroll believed that the 1980s and 1990s stood for fewer definitions, but for more research and alternative themes such as the stakeholder theory, which was made most famous by R. Edward Freeman. He defined a stakeholder as any group or individual who can affect or is affected by the achievement of the activities of an organization (Carroll, 1999). Freeman argued that different stakeholders are relevant to a companys operations.

Additionally, Carroll expects that in the 2000s more research will be done on how to measure CSR. More empirical research will be conducted and researchers will focus on how to implement CSR successfully (Carroll, 1999; Meehan et al., 2006).

2.1.3 Reasons to Implement CSR Keith Davis (2008) created a model consisting of 5 propositions that describe how and why companies should take action to protect and improve the welfare of society as well as that of their businesses. These 5 propositions are the following:

1. Social responsibility arises from social power. Companies have power over and influence on the society, since they are able to make decisions that will have impact on external factors such as the environment, employment (more jobs or less jobs) and local development (stores, buildings etc.). Due to this influence and power, Davis argues that companies can and should be hold responsible for sustaining and improving the society.

2. Business shall operate as a two-way open system, with open receipt of inputs from society and open disclosure of its operations to the public. To improve the welfare of the society, Davis proposes an ongoing and open communications between the companies and the society representatives. This means that the companies need to listen to what should be done to maintain and improve social welfare. On the other hand, the society needs to listen to the companies and what they have done so far in terms of social responsibility.

3. The social costs and benefits of an activity, product or service, shall be thoroughly calculated and considered in deciding whether to proceed with. The technical feasibility and economic profitability as well as the short term and long term impact of all business activities on society need to be taken into consideration before undertaking them.

4. The social costs related to each activity, product or service shall be passed on to the customer. Financing activities to improve the welfare of the society might be profitable for companies. Therefore, it can be expected that companies should pass the extra costs made by having social activities to consumer. This can be done through higher price for socially responsible products and services.

5. Business institutions, as citizens, have the responsibility to become involved in certain social problems that are outside their normal areas of operation. If a company has the expertise and the know-how to solve or prevent a social problem, it needs to be held responsible for solving that problem. It should not matter whether or not a

company is directly associated to a societal problem. In the end, all citizens and companies will benefit from a generally improved society.

Also, the importance of CSR is not only related to improving social welfare but also to a companys motivation to take CSR actions. According to Lynes and Andrachuk (2008) the possible motivations for a company to be committed to CSR are: long-term financial strategy (e.g. investing in efficient and low-emission technologies), eco-efficiencies (e.g. reduction in expenses as a result of savings achieved through waste reduction), competitive advantage, good corporate citizenship, image enhancement, stakeholder pressures and a desire to avoid or delay regulatory actions. Especially the pressures from stakeholders form an important motivation for a companys CSR involvement.

2.1.3.1 Stakeholders Nowadays, companies are facing the globalisation of markets, increasing intensity of competition, rapid technological changes, demographic changes, environmental challenges, changing value systems and changing consumer preferences (Karna, et al., 2001). These changes in the society influence companies to consider various interest groups in its decisionmaking. The interest groups can be referred to as stakeholders. As mentioned before, stakeholders are identified as any group or individual that can affect, or is affected by, the performance of the organisation (Freeman, 1999). Examples of stakeholders are employees, shareholders, customers, governments, communities, suppliers and unions. Companies often face demands from the different stakeholder groups to invest in CSR policies. Also, recognizing the importance of stakeholders and their demands has benefits for the companies as well. Building relationships with customers, suppliers and other stakeholders can create a competitive advantage. Furthermore, it can result to a new proactive corporate strategy that anticipates societal issues instead of only reacting to them. Based on this, the importance of CSR is becoming a more significant tool for companies (Karna, et al., 2001). This report focuses primarily on the stakeholder group consumers and how the CSR activities of cosmetics companies affect their purchase behaviour. Consumers have several preferences and views to influence a companys CSR activities. As mentioned by McWilliams and Siegel (2001), there is strong evidence that many consumers value CSR attributes.

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

To meet the consumer demands and to benefit economically, a company can implement CSR as a differentiation strategy. Examples of differentiation via CSR are recycled products or organic products. In this way a company can create new demand or can even charge a premium price for the socially responsible products. It might be necessary to invest in R&D in order to achieve differentiation. However, these R&D investments can lead to process and product innovations. There are some consumers who want the products that they purchase to have certain socially responsible attributes (product innovation), while other consumers also value knowing that the goods they purchase are produced in a socially responsible manner (process innovation) (McWilliams et al., 2001). The CSR differentiation strategy can only be successful if customers know about a companys CSR policy. Advertising is therefore an important tool to create and enhance awareness. According to Nelsons (1970) description of experience goods and search goods, it can be said that cosmetics products belong to the experience goods category. Consumers can only understand the true value of cosmetics products after they purchase and use it. Advertising for experience goods entails more information in which the product is often linked with a recognized brand name. This association provides the consumer with information about the product by connecting it with the reputation of the brand. By implementing and creating consumer awareness concerning CSR, a company is able to create a reputation of reliability and honesty. More often than not, consumers assume that the products of a reliable and honest company will be of high quality. Therefore, advertising that provides information about CSR attributes can be used to build and sustain a reputation for quality, reliability, or honesty (McWilliams et al., 2001).

Other possible factors of consumer demand are tastes and preferences and the price of substitute products. The taste and preferences of consumers are influenced by mass media. Over the years, CSR has become a popular topic in the media where free publicity is given to a companys commitment or lack of commitment to CSR. Also, mass media is able to provide consumers with new information regarding social attributes and methods of production. It

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enhances consumer awareness and therefore influences demand for CSR (McWilliams et al., 2001).

It has to be said that not all consumers value CSR attributes, which means that the price of competing products will still affect the demand for socially responsible products. On the other hand, those consumers who do value CSR are willing to pay a higher price for a product with additional social characteristics than for an identical product without these characteristics. A consumer survey conducted on behalf of the European Commission showed that 70% of consumers find it important that a company is committed to social responsibility, while 44% are willing to pay a higher price for products that are socially and environmentally responsible (CSR Europe, 2000).

Figure 2 gives a short overview of several stakeholders and their demands as well as a companys reward when implementing CSR activities based on the stakeholders views.

Stakeholders Consumers

Demands

Rewards consumption (through

Products with socially responsible Increased

attributes and products produced in a differentiation and innovation), brand or socially responsible manner. company reputation of being reliable, honest and of high quality. Employees & Equality unions and diversity; working Increased employee loyalty, morale and

conditions (e.g. safety); financial productivity. security; work place facilities. Proactive environmental practices, Increasing consumption of the companys certain level of CSR investments. products. Either their own consumption or that of the consumers they influence.

Government

Community

Support for local social services

Increasing consumption of the companys products. Either their own consumption or that of the consumers they influence.

Figure 2: Overview of stakeholders demands and companies rewards

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2.1.3.2 The Cosmetics Industry CSR has a significant role in the cosmetics industry. Since the consumers use cosmetics products on themselves (face and/or rest of the body), it creates a personal interaction with the industry. The consumers are more willing to be informed about the CSR activities of the cosmetics companies. These activities, in a consumers mind, shows whether a cosmetics brand is reliable, honest and/or of high quality. The cosmetics industry is known for pioneering in CSR committed activities and policies. Examples are small-medium enterprises such as The Body Shop and Aveda, which are considered as pioneers in green marketing that introduced and reported on their CSR activities. The ambition of these companies was to change consumers purchase behaviour. They were able to gain consumers trust and market shares and as a result they were able to compete with large cosmetics companies. The SMEs (Small Medium Enterprises) have set the standards for CSR and multinational cosmetic companies are now following suit (OECD 2007).

The main CSR focus for cosmetics companies are: Environmental protection such as the control of environmental impact on production sites and shipping centres, use of bio substances in product formulas and use of recycled materials. Ecological issues such as the preserving the ecosystem. Since cosmetics companies often use many and different plants in their product formula, it has become an important focus issue to maintain a positive CSR image. Social standards, which can be internal such as empowering employees (to increase employee satisfaction) and non-discrimination of employees (by sex, age, race, and/or culture). Social standards can be external as well, for example protecting cultures abroad by funding local agricultural projects and local agricultural economies.

The majority of the CSR topics in the cosmetics industry are linked with the ingredients used in the products. Consumers find it important to know what ingredients are used, if they are healthy ingredients and whether or not they are tested on animals. Furthermore, consumers like to know where the ingredients come from and if a company is a participant of fairtrading. The buying decision of cosmetics products is often linked with habit, loyalty or social status. Therefore, by focusing on consumer demand and raising awareness on other social responsible issues not only increases consumer loyalty and brand image, but gives a company
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a competitive advantage through differentiation (OECD, 2007).

As mentioned before, advertising is important to create consumer awareness and gain competitive advantage. Even though the advertising budget is often limited, a part of the budget is used to communicate the social and environmental view and the activities of the company. Advertising is done through mass media as well as through guerrilla marketing (i.e. direct promotion and product placement in movies and television shows). Another example of guerrilla marketing is advertisement through the cosmetics stores. Consumers can find information regarding a companys CSR activities in the stores via leaflets, posters or cosmetics consultants who stress the CSR advantages of the brand. In addition, by using mass media the companies are able to communicate their CSR messages and use their logo to increase their positive image. The companies receive free publicity from printed media as well as through research and reports, consumer guides and CSR-related awards (OECD, 2007).

In addition, cosmetics companies inform their customers through their CSR reports. The Body Shop was the first company to publish a stakeholder report in 1995. The issues that are highlighted in the reports are ethical trade, animal testing, supply chain, ecology, human rights, protection of the planet, packaging, partnership with NGOs, employee treatment and involvement, ingredients and internal CSR (OECD, 2007).

2.2 Activities of CSR CSR is becoming a more important concept for companies instead of considering it as a trend concept. The CSR activities of companies are divided into two parts, which are internal and external CSR activities, in order to explain how it works into more detail.

2.2.1 Internal and External CSR Activities Although CSR is usually perceived, recognized and related with end results such as creating a responsible company, product and/or brand image and focused on the effect on consumers, internal CSR activities help to create the part under the iceberg for companies. To be more specific, in the cosmetics industry consumers are becoming environmental friendly since they are more selective and socially responsible in their choices. They care about where, how and by whom the products are produced. Easy access to Internet, television and other media
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enables consumers to gain knowledge about the roots of the products as well as the production processes and this situation leads consumers to responsible buying. Moreover, it is important for consumers to know what ingredients are used and if they add value to environmental institutions or NGOs by buying the specific products. Furthermore, another debated issue is that consumers are also sensitive and responsive to animal testing in the cosmetics industry. If the specific product or brand has a negative reputation in terms of animal testing, ingredient quality or environmental unfriendly production processes, consumers are not willing to choose those products. In addition, it can be said that all safety, energy consumption and pollution control related activities can be grouped under external CSR activities.

Lately, organizational commitment is considered as one of the most important success indicators for companies. In that case, internal CSR activities play an extremely important role to attract the very best employees and to sustain them for the good of the companies in the long term. Matthews says: As the media draws attention to environmental and sustainability issues, consumers are questioning the ethics of companies that may mislead in their green or fair trade positioning. As consumers become more knowledgeable and critical about these issues, they are increasingly sensitive to issues or claims that can be considered green washing, a term used to describe unfounded or irrelevant environmental claims (Matthews, 2008). Therefore, internal CSR activities can be stated as a proof for companies to show that what they are doing is not a green washing but the real self-interest of the companies towards responsible behaviour. Even though there are companies that do not truly believe in importance of internal CSR, it creates the basis for implementation of successful external CSR activities.

Therefore, Meehans and Richards (2006) stress the importance of developing international management processes for effecting social responsiveness in order to make the organization more flexible and to have greater responds to external change in the social environment. Sookram (Guardian, 2009) explains what internal CSR is by saying: Internal CR refers to all the practices that are implemented within a company, such as employee development programmes, health and safety policies, governance practices, creating a motivating and productive work environment within the organization, and reducing the impact of a companys operation on the environment and product responsibility. Moreover he adds that too many companies were placing emphasis on external CSR and were ignoring the
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opportunities and benefits that can be easily derived and quantified from internal CR. Since many companies are more focused on financial benefits of the outcomes of corporate socially responsible behaviour, they pay more attention on external CSR activities. On the other side, it shouldnt be forgotten that creating the strong image of being a socially responsible company comes from applying internal CSR activities which in the end persuades consumers that all the CSR activities of the company is just not a green washing. Internal CSR activities are also a very important investment for the companies in the long run which will lead to high financial benefits through strong organizational commitment. Early models of CSR emerged in the 1960s and typically held the social aspect of CSR as referring directly to those responsibilities above and beyond economic and legal obligations. Thus for many, CSR was and still is synonymous with voluntary and philanthropic acts by business organizations designed to alleviate social ills or benefit a disadvantaged group chosen by the corporations managers (Meehan et al. 2006). On the other side, real life business cases show that this belief cannot go further than creating a green washing image in consumers mind. When companies consider CSR as strength and the social resources are considered as an asset through successful competitive strategy, the real meaning of CSR is understood and companies will come up with cost benefits, which are their primary focus.

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2.2.2 The 3C-SR Model Moreover in order to have a better understanding of CSR, its effect on consumer behaviour and mutual advantages for the stakeholders Meehans and Richards 3C-SR model is going to be examined. The three components of this model are: ethical and social commitments, connections with partners in the value network and consistency of behaviour over time to build trust (Meehan et al., 2006). The model suggests that in order to be a good corporate citizen it is impossible to separate these three elements of the 3C-SR model. Figure 3 shows an overview of the 3C-SR model.

Figure 3: The 3C-SR Model

The model suggests that ethical and social commitments stand for the social resources, which are ethical standards, social objectives of the organizations such as its mission, strategic objectives, strategy programmes, organizational policies and corporate culture. Furthermore, connections with partners in the value network can only be sustained by having it as complex constellations but not in sequential chains. The right fit between customers and the competencies of the companies has to be achieved and improved. And lastly, consistency of
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behaviour has been mentioned as the behavioural element of social resources over time and observed in all facets of organizational operations.

2.3 CSR and Innovation


This paragraph describes whether CSR can be used as an innovative tool and how CSR-driven innovation can play a role in the cosmetics industry.

2.3.1 CSR-driven Innovation CSR-driven innovation builds on the ideas of user-driven innovation (input from consumers) and company-driven innovation (internal ideas and development). It results from a companys ambition to improve social or environmental conditions. Also, an innovation can be further encouraged by introductions of new technologies, the development of engineering skills and consumer demand as well as the local, national and global concern for CSR-related issues and stakeholders wishes. To create socially responsible innovations depend on a companys level of CSR involvement. There are different levels of CSR involvement. The importance of CSR depends on how far companies implement the concept into their business structures. For example (Clarkson, 1995): Companies with reactive CSR strategies do not take social responsibility and do less than what their stakeholders require. Companies with defensive CSR strategies acknowledge social responsibility but conduct the minimal obligations. Companies with accommodative CSR strategies accept social responsibility by conducting all that is required. Proactive companies anticipate social responsibility and do more than is required.

In addition to the examples above, Porter and Kramer have defined another type of CSR, namely strategic CSR (Porter and Kramer, 2006). Companies that use a strategic CSR not only accept and anticipate social responsibility (and therefore proactive) but also integrate it into their core business strategies. This means that CSR is integrated into the companys innovation process as well.
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Four types of CSR-driven innovations can be indentified based on todays literature: Corporate social innovation (CSI), as discussed by Kanter (1999), refers to the fact that companies can use social issues as an opportunity to learn and develop their business supported by R&D. In this way, innovation can arise from social knowledge. A company is able to create new products, new solutions and new market opportunities, while meeting societal needs. The bottom of the pyramid (BOP) refers to disruptive innovations targeting the poorest consumer group, who live on less than 2$ per day (Prahalad, 1994). In this way, companies are able to generate growth and satisfy societal and stakeholders needs by creating profitable and future growth markets as well as focusing on the poor and their urgent needs. This is done by directing technology and product-development resources on the needs of the poor and building long-term relationships with local communities and companies as well as NGOs. Ecological innovation focuses on environmental issues (Hockerts, 1999). Companies are able to profit from ecological innovation by not only following current consumer demand, but also by anticipating future environmental developments. Social entrepreneurship aims at indentifying socially responsible opportunities to create public goods. Social entrepreneurs are often associated with voluntary and non-profit sectors (Hockerts, 1999).

2.3.2 The Cosmetics Industry The cosmetics industry is a saturated industry in which competition is quite high. A significant part of the growth is achieved through innovation. Innovation is necessary to maintain competitiveness, to improve product performance, to increasing safety issues and to reduce the environmental impact of the products (OECD, 2007). Beertil Heerink of the European cosmetics association Colipa confirms this notion by stating that the cosmetics industry thrives on the capacity to innovate (Nichol, 2010). Examples of drivers of innovation are the diverse population and the changing consumer needs. Examples of innovation are new formulations of products and new testing methods.

As it has been mentioned before, consumers want to be informed about the ingredients used in the cosmetics products. These ingredients need to be traceable. That is why it is necessary to know who is doing what in the supply chain. To create consumers awareness and consumers
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trust regarding natural or biological ingredients, cosmetics companies need to be able to make clear where those ingredients come from, who is producing them and how they are processed into the final products. The supply chains are quite short for small-medium sized companies. This also counts for the companies that specialise in natural ingredients in which the distributor can be the producer. The supply chain can be quite long and complicated for larger enterprises. The ingredients might come from abroad or from a wholesaler, processed in another company. In some cases, the final packaged product is bought from the distributing brand (OECD, 2007).

Also, the supply chain can play an innovative part in socially responsible packaging. The cosmetics industry is looking for new techniques to reduce packaging waste. Examples of the new ways of packaging are making use of biodegradable plastics and recycled materials. Other packaging techniques are upcycling (reusing an object in a new way) and lightweighting (use of less material) (Organic Monitor, 2010).

2.4 Development of CSR


Development is an important term for Corporate Social Responsibility. Therefore, it is seen that sustainable development is mostly linked with it. The world has limited resources and increasing population. Due to the increasing competition companies cannot create value for consumers and for the society without responsible behaviour. Moreover, changing the ongoing attitude and developing CSR activities create differentiation and a win-win situation for all stakeholders. Therefore, Meehans and Richards (2006) agree with this idea by saying: An organization that commits to widely recognized standards of social performance and seeks to promulgate them across its entire value network will, if the effort is perceived to be genuine (i.e. consistently maintained over the long term), benefit from enhanced competitive resources deriving directly from its social orientation. In effect, CR orientation becomes a meaningful basis for marketplace differentiation.

2.4.1 Current Developments of CSR and Consumer Behaviour International Institute for Sustainable Development has set 6 drivers for the development need of CSR which are: The shrinking role of government, demands for greater disclosure, increased customer interest, growing investor pressure, competitive labour markets and supplier relations (BSDglobal, 2010). Moreover, the 3C-SR models three components related
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to ethical and social commitments, connections with partners in the value network and especially consistency of behaviour element are crucially important in terms of developments in CSR. Development of social resources requires organizations to take a holistic or strategic view of their values and the management policies they underpin. This in turn implies consistent adherence to externally recognized and accredited standards (Meehan et al., 2006). Therefore, it can be said that having loyal customers is no more related about providing the expected products with the best quality and the best price. Credibility of the product, the production processs effects on nature, the credibility of the suppliers, strategic CSR views of the company and its reactions towards the developments carry an important role.

Furthermore, being a proactive firm in terms of developments in CSR is very important. Companies may choose to be adaptive, interactive or proactive. And managers of the socially responsive companies are proactive (leaders) while dealing with social issues (Goodwin, 2007). For example, Shiseido as one of the biggest cosmetics companies claims that they apply both reactive and proactive CSR activities but emphasizes that proactive CSR activities are the ones, which makes Shiseido unique (Kataoka, 2009). Moreover, some of the proactive CSR implications of Shiseido can be listed as: providing make up and massage seminars for elderly and disabled people, having social contributions for funds by Shiseido employees, donating environmental associations, supporting tree planting programs and so on.

Furthermore, it can be said that being a proactive company reflects the intention of the companys interest towards developments in the CSR area, which makes it unique and competitively successful as well. Meehans and Richards (2006) say: Strategically astute organizations are today aware of significant changes in consumer attitudes to organizations themselves and the brands they seek to develop. And they continue by saying: Where negative perceptions of organizations prevail, brand boycotts often follow as consumers, particularly in wealthy industrialized countries, seek to punish parent organizations. But herein lies an opportunity for a new approach to competitive strategy based around social resources. Therefore, CSR implications and developments should be taken as opportunities for companies in order to increase their competitiveness as well as creating value for customers, society and the environment.

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Moreover, the article gives examples of how consumer behaviour is affected by the social performance of the companies. Many consumers place primary emphasis on company social performance in deciding whom to favour with their spending. Environics Internationals Corporate Social Responsibility Monitor 2001 (a survey of 26,000 people across 20 countries) found that CSR-related factors accounted for 49 per cent of a companys image while brands and financial management accounted for only 35 and 10 per cent, respectively (Meehans et al., 2006). This example shows how brand awareness in terms of social responsibility changes consumers decisions as well as cost benefits and images of the companies.

2.5 CSR and Consumer Behaviour


Understanding consumer behaviour is vital in every industry. An important area of consumer behaviour is how consumers choose and make decisions and steps that lead to the purchase of a particular product or service. These steps consist of need recognition, information search, evaluation of alternatives, and purchase.

2.5.1 Need Recognition When it comes to social responsibility, a consumer need can be a product that satisfies individual needs as well as improves social welfare. It has to be said that not every consumer experiences this need. The recognition of this need depends on personal moral views, also called as ethical obligation, and whether or not this obligation forms an essential part to ones self-identity (Valor, 2008). Another obstacle regarding need recognition is bounded responsibility, which refers to the fact that not all consumers are equally aware of or involved with all social issues. For example, one consumer might be more involved with the preservation of the environment while the other cares more for human rights. It shows that consumers have different views of corporate social responsibility.

Also, the perceived efficacy of consumer action is important. Consumers are willing to purchase a socially responsible product if they believe that it will contribute to solving a social issue. There is a greater chance of purchase if it makes a difference.

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2.5.2 Information Search The sources of information influence a consumer perception of efficacy. For example, mass media often focuses on the drama regarding a social issue (e.g. the harm inflicted) than on the solutions (reasons why it happened and possible strategies to solve it). It reduces the consumers believe of change. On the other hand, information coming from formal sources (e.g. university classes), informal sources (NGOs, seminars, campaigns, magazines etc) can be more educational and empowering for consumers and might increase the perceived selfefficacy (Valor, 2008). In addition, consumers might buy responsibly if they are able to find out about a companys impact on social welfare. However, studies have shown consumers face difficulties in finding this information. Also, this is due to that fact that ethical/social attributes of a product are often credence attributes, which cannot be judged before, during or after product use due to lack know-how and expertise and the level of difficulty.

There are consumers that would like to buy responsibly but do not make the effort to inform themselves for all product categories. For example, they may be willing to find information about one product category, but care less about finding information regarding another socially responsible product category. Even though they might be aware that the information is available, they see it as a huge investment in time and effort to retrieve and process it. Those consumers who feel the ethical obligation are more willing to search for information. On the other hand, too much information can lead to overload and to difficulty in combining information about companies. Moreover, consumers are more sensitive to negative information than to positive information. Examples of negative information are a companys lack of CSR involvement or a companys violations and opposition to a social issue.

How consumers process information can depend on their involvement with a product or a brand. If a consumer has a strong commitment to a brand, he/she is able to show more resistance to negative information and might have difficulty remembering ethical attributes of a product.

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2.5.3 Evaluation of Alternatives Consumers will only buy responsibly if these products can perform at least as good as the irresponsible products. Another factor influencing the purchase decision is the price of a socially responsible product. The additional costs resulting from responsible producing processes are often passed on to the consumer by charging a premium price (Valor, 2008). As mentioned before, reports have shown that consumers are willing to pay a higher price for a socially responsible product. However, this counts as long as they have a budget for it. If their income cannot support responsible purchasing, consumers will buy competing products with a lower price. Other factors that have an influence on a consumers purchase behaviour are travelling a distance to buy the product and spending too much time locating the product in the store.

After seeking information and considering the alternatives, consumers make the decision to choose a socially responsible product. As mentioned before, it is hard to judge the ethical attributes of a product. That is why it is important for companies to raise awareness and provide information about their CSR developments and their impact of improving social welfare.

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2.6 Theoretical Framework


Figure 4 shows a summary of the theoretical outline that is used throughout the thesis. The figure shows the literature used to answer the research questions, which are vital for answering the central questions.

CQ: How do Corporate Social Responsibility activities affect consumers buying behaviour in the cosmetics industry

RQ1) How do cosmetics brands define CSR?

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

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

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

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

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

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

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

Figure 4: Theoretical Framework

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3. Methodology
The theoretical framework of this thesis was presented in the previous chapter. The methodology of this work will be explained in this section.

3.1 Research Purpose


As it has been mentioned before, the central question of this paper is: How do corporate social responsibility activities affect consumers buying behaviour in the cosmetics industry? Therefore, the purpose of this research can be stated as the following: to have a better understanding of CSR and its impact on consumer behaviour. Moreover, as the literature review has shown, the cosmetics industry has been chosen as the area of research since CSR activities are playing an important role for the firms as well as for the stakeholders in this specific sector.

3.2 Research Approach


Qualitative research method is chosen in order to analyse the research aim of this study. The reason why the qualitative approach is selected depends on its constructionist and interpretivist character. Bryman states: qualitative research can be construed as a research strategy that usually emphasizes words rather than quantification in the collection and analysis of data; has rejected the practices and norms of the natural scientific model and of positivism in particular in preference for an emphasis on the ways in which individuals interpret their social world; and embodies a view of social reality as a constantly shifting emergent property of individuals creation (Bryman, 2004). Therefore, based on the purpose of this research, consumers interpretations, values, and attitudes towards responsible consumption, environmental awareness and voluntary actions in terms of societal and environmental issues of cosmetics companies are topics, which needed to be explored by conducting qualitative research. Davies (2007) says: Much qualitative research aims to do just that: to reflect upon the feelings and experiences relative to the research question, to explore the nature of the relationship between person and situation, and to take account of the effect of the research analysts own background and role.

In addition, qualitative research provides the opportunity and flexibility- to the researcher- of learning consumers expectations, experiences and current elaborations within their own

words rather than just focusing on numbers gathered by quantitative surveys. Davies (2007) supports this idea by saying: Qualitative research feels more human than methods that can sometimes be portrayed as reducing everything to thick boxes and tables. In qualitative research, the researcher wants rich and more detailed answers while quantitative research is supposed to generate answers that can be coded and processed quickly. (Bryman, 2004)

3.2.1 In-depth Interviews Furthermore, the chosen qualitative method is conducting in-depth interviews. In-depth interviews can be conducted in an unstructured or semi-structured way. It is preferred to use a semi-structured interview for this research based on the following reasons. Firstly, semistructured interviewing gives the opportunity to ask specific topics to be covered in the interview guide while providing flexibility at the same time. Since this research has specific questions to explore, semi-structured interviewing enables to cover more specific issues. Moreover, semi-structured interviewing provides flexibility for the interviewer to come up with new and/or follow up questions or to reformulate the questions based on the replies and reactions of the interviewee. Secondly, since two people conducted this research, the semistructured aspect of the interview ensures a way of comparing interviewing styles. Thirdly, qualitative interviewing gives the opportunity to interview the participants more than once when it is necessary and to have a pre-test of the questions in order to be sure if the questions are understood in the right way. (Bryman, 2004)

On the contrary, the biggest disadvantage of having in-depth interviews is that it is time consuming. Moreover, the type of the questions may create disadvantage if they are not prepared in the appropriate way. For example if the questions are too long and complex to remember, the participant may not give their ideal answers. And lastly, face-to-face interviews are vulnerable to bias since participants may be influenced by the interviewer and vice versa. During this thesis study, the advantages of in-depth interviews are valued more compared to the disadvantages.

3.3 Research Design


The semi-structured interviewing method has been planned for the consumers as well as for the company interview in the following way. First of all, in terms of consumer interviews the participants are identified as female cosmetics consumers who, in the age range of 18 to 40

years old, are living in Brussels. Having a broad age range is because of the fact that the cosmetics industry targets all female consumers. In the cosmetics industry it is often observed that consumers are divided into consumer segments based on their economic, geographic, or cultural differences but not based on the age differences. On the other hand, it has to be kept in mind that, there are some exceptional categories such as anti-aging creams and anti-aging make-up products. However, most cosmetics product categories do not aim to segment female consumers based on their ages.

Moreover, Brussels has been chosen as the area in which the interviews are conducted. The reason for this is that the researchers of this study are located in Brussels. Therefore, personal interviews were only possible to conduct in Brussels. Time restriction was also the reason that the interviews were restricted within this specific region. On the other hand, it is assumed that the information gathered from the interviews, meaning consumers perceptions related to CSR, can be seen as homogenous for the rest of Belgium and Europe.

In terms of the interview guide, it is prepared to follow a certain protocol of questions starting with couple of introductory icebreaker questions to make the interviewee more comfortable and continuing with several transition questions, which explain the purpose of the interview and asking for permission to use a tape recorder. After being confirmed by the interviewee, starting with some demographic questions and keeping up with thirteen main questions that address the core subjects of the research. Moreover, the interviewees answers are summarized during the interview in order to be sure that the answers are understood in the right way (Gubrium et al.). One other issue that has to be mentioned is about the number of the interviews conducted. Normally, literature shows that there is no fixed number of interviews while doing qualitative research. Moreover it is suggested that, the interviewers should continue interviewing until they have learned all there is to be learned from the interviews (Gubrium et al.). Therefore, 25 interviews have been conducted since this amount led the interviewers to collect sufficient information in order to answer the research questions. In addition, test interviews were held in order to avoid confusion and misunderstandings and to reduce the level of bias. By doing so, the findings of the in-depth interview are expected to be more reliable.

During the test interviews it was noticed that consumers had difficulty in understanding the term CSR, since the majority of the interviewees were not familiar with the term. Even after the explanation was given, and examples of the CSR activities were mentioned; the interviewees still had hard time processing the information and giving examples of CSR activities in the cosmetics industry. Based on this, it was decided to aid the interviewees by showing examples of CSR advertisements of cosmetics brands. In this way, consumers were able to recognize and fully understand the meaning of CSR activities. On the other side, it has to be mentioned that while showing the CSR advertisements, the name and logo of the cosmetics brands were hidden in order to prevent interviewee bias of focusing too much on these cosmetics brands shown in the CSR advertisement. In addition, in this way the answers of the interviewees can be considered more reliable. The advertisements shown during the consumer interviews can be found in the Appendix 1. After a quick glance on the advertisements (around 5 10 seconds), the interviewees were able to give more examples of CSR activities and were able to recall socially responsible cosmetics brands. Furthermore, they were able to give detailed answers to the other questions, such as how they find out about socially responsible cosmetics brands, whether they find CSR important and believe that it makes a difference, what type of CSR activities will lead them to change their loyal cosmetics brands, whether they would recommend a socially responsible cosmetics brand and if they would discourage socially irresponsible cosmetics brands to someone else.

Moreover, the test interviews showed that the interview questions were difficult to understand and to answer in the first instance. Some of the questions were too long or formulated in a difficult way to understand. After the test interviews, the interviewee questions were reformulated in order to make them easier for the interviewees to answer and to make sure that interviewees feel comfortable in answering those questions. The consumer interview guide can be found in the Appendix 2.

3.3.1 Company Interview The second target group to interview were the cosmetics brands. The same kind of guide is used, which was mentioned above for consumers, in terms of the interviewing style.

Due to lack of time and cooperation, only one company interview was conducted. The interview was held with Estee Lauder Companies. Even though there is only one company interview, it did have a significant importance on the thesis report. First of all, Estee Lauder Companies is a multinational enterprise that plays an important role in the cosmetics industry, with 27 cosmetics brands. Secondly, during the consumer interviews, the companys prestige beauty brands such as Estee Lauder, MAC, Bobbi Brown, Clinique and Aveda were mentioned as favourite cosmetics brands or as socially responsible brands by a large group of interviewees. As a result, by interviewing Estee Lauder Companies, information was gathered about the perception on CSR on corporate level and about the brands CSR initiatives. This means that, although Estee Lauder Companies is the only company, which the interview has been conducted, it provided remarkable amount of information through its wide range of brands.

The contact person of Estee Lauder Companies in relation to the CSR topic is Isabel Martin. Martin is the Vice President Governmental Affairs-EU of the Benelux. The total number of questions for the company interview was 14. However, the first 3 questions were basic questions related to the background information of the interviewee. The other eleven questions focused on the perceptions of Estee Lauder Companies on CSR. The CSR-related topics discussed during the interview were companys culture, consumer involvement, competitive advantage, innovation and future CSR developments in the cosmetics industry. These topics were discussed in order to answer the research question and in the end the central question.

Unfortunately, test interviews were not possible for the company interview. However, to make sure that all information gathered and that the answers of the interviewee were valid and reliable, the website of Estee Lauder Companies, the brands websites and the Annual Report of 2009 provided additional information to analyse and evaluate the companys CSR commitment. In addition, the answers of Isabel Martin were summarized during the interview to check whether the interviewers understood her answers and in order to avoid any confusion. The company interview guide can be found in the Appendix 2.

3.4 Analytical Approach


The results of the interviews were analysed by using several models and theories. An important theme in the consumer analysis is awareness consisting of recognition (aided awareness) and recall (top-of-mind awareness). Analysing CSR awareness is necessary in order to understand how CSR activities affect consumer purchase behaviour. Another important theme in the consumer analysis is persuasion. Persuasion can be described as change brought either by reason or by indirect factors that do not involve any reasoning (Tellis, 2004). Examples of these factors are the use of cues such as endorsers and emotional cues (fear, humour, joy, shock etc.). Persuasion is an important subject for this thesis in order to answer the central question: How do corporate social responsibility activities effect consumers buying behaviour in the cosmetics industry? Moreover, during the consumer interviews, questions were asked in relation to how consumers find out that a brand is socially responsible and how they feel about being informed. These questions in general are related with the routes of persuasion. Companies can use CSR as a way of differentiation to gain competitive advantage. However, in order to do that, they need to communicate to consumers about their CSR activities and persuade them about the legitimacy and the credibility of their advertisement.

In terms of persuasion, the most important model used is the Elaboration Likelihood Model (ELM). ELM is a framework that summarizes the different routes of persuasion and explains the reasons for each routes of persuasion. The explanations are based on how much a consumer thinks about the message of the advertisement. The routes of persuasion that are discussed in this paper are the central route and the peripheral route. For example, when a consumer has the motivation and the ability to evaluate a message, the likelihood that she will think about it will be high. The consumer will look for and respond to strong arguments in favour of the message and counter what she considers are weak reasons. This route of persuasion is called the central route. On the other hand, if a consumer has the motivation but lacks the ability to evaluate a message, she will more likely respond to cues associated with the message, which is called the peripheral route of persuasion (Tellis, 2004). The routes of persuasion can be found in figure 5.

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

The routes of persuasion are closely linked with the communication channels used by cosmetics companies. These channels are discussed in the consumer analysis section as well. There is a special focus on the point-to-point communication since this is an important communication channel for the cosmetics industry. In addition, Vaughn presents a model called Foot-Cone-Belding (FCB) grid, which shows how purchase decisions are made for specific products.

Figure 6: FCB Grid

In Figure 6, four different situations are illustrated based on the high-low involvement and the think-feel dimensions. Based on this figure, it is clear to observe that consumers reflect different decision mindsets in terms of the sequence of learning, feeling and doing for specific product categories. Cosmetics products consumption can be classified in the second quadrant. The second quadrant concerns product decisions of high involvement, but for which less information is needed. In this case, the consumer first wants to be emotionally attracted by the brand image, and then he or she collects information, and finally undertakes some action. Jewellery, perfume, fashion and holidays may be examples that fit in this category (De Pelsmacker et al., 2007).

In addition, in relation to the peripheral route, the importance of repetition and the advantages of using endorsements in the cosmetics industry and for CSR advertising are analysed as well. The structure of the consumer analysis is done based on the results of the interview questions. The order of the interview questions remains the same as the interview guide and subjects such as persuasion, repetition, communication channels and loyalty are analysed while evaluating the answers of the interviewees. At the end of the consumer analysis, an answer is given to the research question How do consumers interpret CSR?

The company analysis section consists of short background information of Estee Lauder Companies and its CSR activities. Moreover, the answers of the company interview with

Isabel Martin are analysed. In addition, the 3C-SR model is used to analyse whether Estee Lauder Companies is a good corporate citizen. The aim of the 3C-SR model is to point out that it is necessary for a socially responsible company to be committed, to share these commitments with its value network and that it is consistent with its performance. These three components of the 3C-SR Model are inter-related and it is impossible to separate the elements and claim to be a good corporate citizen (Meehan et al, 2006). In the end, an answer is given to the research question How do cosmetics brands define CSR?

4. Company Analysis
This chapter focuses on analysing the results of the interview, which was conducted with Estee Lauder Companies.

4.1 Company Background and History


Estee Lauder Companies is one of the leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. Mrs. Este Lauder founded the company in 1946. Estee Lauder Companies has been a family-owned company until 1995 when it became a public held company. Until this day, the Lauder family is still very much involved in the companys operations. The flagship cosmetic brand of the company (Estee Lauder) is named after Mrs. Este Lauder. Currently, the company has 27 cosmetics brands.

The cosmetics products of Estee Lauder Companies are sold over 140 countries and territories. The net sales of 2009 were $7.3 billion. The vision of Estee Lauder Companies is Bringing the best to everyone we touch. The company defines the best as the best products, the best people and the best ideas and has built its success on these pillars since its establishment.

The brands of Estee Lauder Companies are: Este Lauder, Aramis, Clinique, Prescriptives, Lab Series Skincare for Men, Origins, Tommy Hilfiger, MAC, Kiton, La Mer, Bobbi Brown, Donna Karan, Aveda, Jo Malone, Bumble and Bumble, Michael Kors, Darphin, American Beauty, Flirt!, GoodSkin Labs, Grassroots Research Labs, Sean John, Missoni, Daisy Fuentes, Tom Ford, Coach, Ojon and Smashbox.

It has to be said that this report focuses primarily on the high-end prestige beauty and makeup artist brands of Este Lauder, MAC, La Mer, Bobbi Brown and the prestige skincare brands of Clinique and Aveda.

4.1.1 Isabel Martins Background The company interview was conducted with Isabel Martin on 05/07/2010. Question 1 was asked to learn her position at the company. Martins position is Vice President Government Affairs-EU at the Benelux Office of Estee Lauder Companies. Her main task consists of following regular legislations with the focus on product regulations. Product regulations refer to composition of the ingredients, packaging of the products and safety conditions. Moreover, her tasks are closely linked with the distribution issues for the company, online sales regulations, R&D and product development, consumer communication and PR. Within question 2, it is aimed to learn Martins background with Estee Lauder Companies.

Martin has a lawyer background. Moreover, she has been working in the cosmetics industry for 12 years and working for Estee Lauder Companies for 7 years. Martin mentioned that before, she used to be the legal director for the Trade Association. After working at this position, she started to work for Estee Lauder Companies as being the first person to hold the title Vice President Government Affairs-EU.

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

She mentioned that her position is not directly a CSR Management position. Moreover there is not a CSR department in the Benelux Office. Martin mentioned that there is a global CSR policy in terms of energy, waste minimization and packaging of Estee Lauder Companies. On the other side, the individual brands of Estee Lauder Companies have their own CSR activities. Since Martins tasks are focused on regulations and legislations of the cosmetics products she is highly involved and linked with CSR policies and activities for 7 years.

4.2 CSR as a Company Culture


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

Estee Lauder Companies is an enterprise that has been involved with CSR activities since its establishment. CSR is a part of the identity of the company and has strong links with the vision and the mission of Estee Lauder Companies. Since it is a family owned company, it has been involved with external and internal CSR activities (employee satisfaction, product quality, product safety, environmental friendliness, etc.) for many years. As a family owned company, the company culture of Estee Lauder Companies was not to expose its name in order to protect its reputation for many years. For the last 20 years, there has been a huge pressure from the NGOs in terms of implementing CSR activities. Therefore, consumers also became aware and developed demand towards the subject. As a result, CSR became as a competitive advantage for the cosmetics companies. So, although the strategy of Estee Lauder Companies was not to expose its name in terms of the CSR activities, it became necessary for the company in the end.

In addition, although there is a global policy at corporate level in terms of energy, waste minimization and packaging at Estee Lauder Companies, having the regional structure makes it easier to implement the CSR policies and set it as a company standard. Moreover, the Annual Report aims to centralize information in terms of CSR and to put the information in a systematic manner in order to have a global picture of the CSR activities.

4.3 Internal CSR activities


As mentioned before, one of the pillars of Estee Lauder Companies is employing the best people. The company is highly involved in empowering its employees and making them feel part of the family oriented company. We embrace diversity and global exclusiveness and take pride in providing a work environment in which individuals of different races, genders and gender identities, sexual orientation, ethnicities, religions and backgrounds can excel (Estee Lauder Companies Annual Report, 2009). Estee Lauder Companies has several programs to empower its employees and to make them feel committed to the company. These programs are:

Most Valuable People (MVP) Volunteer Program supports several institutions that focus on health, education, literacy and institutions that give support to women. The goal of the MVP Volunteer Program is to give the employees of Estee Lauder Companies the opportunity to help local communities and other people in need. For instance, employees of Estee Lauder Companies supported the literacy organization Reach Out and Read by helping children to get prepared for school.

Think Smart is a program that encourages employees to submit ideas on how Estee Lauder Companies can operate more efficiently and more cost effectively. Since its relaunch in 2005, the program has received thousands of ideas from employees.

Health & Wellness Programs focus on the well being of the employees by giving health check-up, skin cancer screenings, mammograms, fitness programs and other onsite activities.

At the moment, Estee Lauder does not have standardized policies regarding safety issues. However, the companys aim for the next 3 years is to standardize the behaviour-based safety program and the workplace policies and procedures. In addition, the company aims to increase safety trainings and to maximize communications through all its facilities.

Moreover, the employees are very much involved with the CSR activities organized by the individual brands. The commitment to the external CSR activities originated from examples set by the employees, for example the Lauder family. Estee Lauder Companies believes that the employees are the core of doing good and represent the companys dedication of being socially responsible.

4.4 External CSR activities


Estee Lauder Companies is as much committed to its external CSR activities as it is to the internal activities. The external CSR activities of Estee Lauder Companies are implemented at corporate level while the brands have their own CSR initiatives as well.

4.4.1 Animal testing and product safety One of the most discussed topics in the cosmetics industry is the testing on animals. Estee Lauder Companies decided to act against animal testing 20 years ago. Instead, the company evaluates its products with the help of volunteers and aims for the complete elimination of

animal testing in the cosmetics industry. Moreover, in order to secure the safety of the cosmetics products, the ingredients and the product formulas are continuously evaluated. Furthermore, the chemicals used in the product formulas comply with the chemical management plans of the European chemical program REACH (Regulation, Evaluation, Authorization and Restriction of Chemicals).

4.4.2 Environmental Activities Being environmental friendly is a topic that Estee Lauder Companies as well as the consumers care greatly about. One of the ways that the company strives for an environmental production is through the packaging process. Estee Lauder Companies is one of the founding members of the Sustainable Packaging Coalition (SPC). The SPC is an industry-working group that aims for a packaging system that provides economic prosperity and the use of sustainable materials. This means that packaging material is sourced responsibly, and the packaging is designed to be safe. Moreover, renewable energy is used during the production processes and packaging is recycled efficiently. One of the green brands of Estee Lauder Companies is Aveda, which is one of the first prestige cosmetics brands that developed sustainable packaging. For example, the brand uses 96% of Post-Consumer Recycled plastic in the packaging of new products. The Key Packaging Achievements of Estee Lauder Companies can be found in the Appendix 3.

Furthermore, the R&D Department of the company created a program called Green Chemistry. This program consists of 40 scientist and engineers who focus on developing sustainable product design. In addition, the company founded an Environmental Affairs and Safety (EAS) Committee. This Committee is concerned with making sure that the companys processes and policies comply with all applicable laws and with the accredited ISO 14001 Environmental Management System. Also, the Committee cooperates with environmental organizations and governmental institutions in order to improve the companys environmental programs. Moreover, the Committee developed an environmental program that aims to reduce energy usage, for example through installations of on-site renewable energy. Another environmental activity is the improvement of the companys global water usage. Estee Lauder Companies tracks the water usage at all locations and implements conservation measures to reduce the water used for processes such as cleaning, sanitation and irrigation.

The company is currently developing a program to further minimize the water usage (Estee Lauder Companies Annual Report, 2009).

4.4.3 Breast Cancer Awareness Campaign One of largest social activities of Estee Lauder Companies is the Breast Cancer Research Foundation (BCRF), which was founded in 1993 by Evelyn H. Lauder (Senior Corporate Vice President of Estee Lauder Companies). The independent foundation aims to fund for innovative clinical and translational research. The foundation supports universities and medical centres to conduct advanced breast cancer research in order to find a cure and prevention of breast cancer. Funding collected through the foundation goes to breast cancer research and worldwide awareness programs. One of those programs is the Breast Cancer Awareness (BCA) Campaign created by Estee Lauder Companies. This campaign aims to raise awareness for the importance of breast health and early detection though several communication channels. First of all, Pink Ribbons and informational brochures on breast health are distributed. The Pink Ribbon has become a worldwide symbol for breast health of which 85 million have been distributed so far. The informational brochures provide information about breast health and give instructions on how to screen the breast cancer individually. The information brochure can be found in the Appendix 4. Second of all, the Global Landmark Initiative is an initiative where landmarks, famous buildings and monuments (e.g. JFK Airport, Tower of Pisa, Niagara Falls etc.) are lit up in pink, which is the colour associated with breast health. The pink lights can be seen as a symbol of hope, empowering and enlightening millions of women everywhere (Estee Lauder Companies Annual Report, 2009). In 2009, over 200 landmarks where lit up in pink. Lastly, the company appoints World Pink Ribbon Ambassadors to support the BCA Campaign. One of the current Ambassadors is actress and model Elizabeth Hurley. In addition, advertisements are placed in magazines to promote the foundation and the BCA Campaign and more information can be found on the companys website.

The campaign is implemented in more than 70 countries and is supported by 14 brands of Estee Lauder Companies. These brands create and sell unique Pink Ribbon Products in order to represent their own brand contributions to the Breast Cancer Research Foundation. The Pink Ribbon products are sold every October, which is the month of breast cancer awareness. The primary brand that supports the Breast Awareness Campaign is the Estee Lauder brand.

4.4.4 MAC AIDS Fund Another large social activity of Estee Lauder Companies is an initiative of the brand MAC, the MAC AIDS Fund (MAF). This foundation was established in 1995 and supports men, women and children who are affected by HIV/AIDS. MAC raises awareness for its foundation with Viva Glam Campaign. The brand introduced the Viva Glam Lipstick consisting of 8 different shades, in which all the money raised through the sales will go to the MAC AIDS Fund. In addition to this, the brand organizes a volunteer day for World AIDS Day on the 1st of December. During this day, the MAC employees volunteer at local organizations. Furthermore, MAC appoints ambassadors for the Viva Glam Campaign to raise further awareness for the MAC AIDS Fund. The current ambassadors of the Viva Glam Campaign are the artists Cyndi Lauper and Lady Gaga. In addition, both artists developed a limited-edition lipstick for the Viva Glam Campaign in which sales are donated to the MAC AIDS Fund.

4.4.5 Social Activities of Aveda, Clinique and La Mer In addition to developing sustainable packaging, Aveda also has created the Aveda Program for the collection of plastic bottle caps at different locations. These plastic bottle caps are then recycled into new caps and containers. The program aims for recycling of plastic caps and preventing these caps to be dumped in landfills, beaches, rivers and oceans. Aveda is the first cosmetics brand in the world to have received a Cradle to Cradle (C2C) sustainability certification.

Clinique is known for being 100% fragrance free and allergy tested. Especially testing on allergies is very much appreciated by consumers. The consumer interviews showed that when it comes to purchase decision factors, ingredients is rated very highly. In addition, with ingredients it is also meant no unhealthy chemicals and no allergic reactions. Clinique tests every product 12 times on 600 people. This means a total of allergy 7200 tests per product. If one of these tests results into an allergic reaction, the product formula will be reformulated in order to reduce allergic reactions to a minimum. In this way, Clinique is able to produce quality and healthy cosmetics products while keeping consumers wishes in mind.

The cosmetics brand La Mer is committed to ocean conservation by promoting the regeneration of the sea kelp forest. The brand promotes this issue in collaboration with

Oceana, which is an international ocean advocacy organization. La Mer and Oceana raised awareness together for Wold Oceana Day, which was officially recognized by the United Nations on June 8th 2009. In addition to the World Oceana Day, La Mer participated on Oceanas Habitat Protection Campaign and developed a special limited-edition crme in which all the money raised is donated to the Oceana.

4.5 Consumer Involvement


Question 5 was asked to learn about the results of implementing CSR strategies on consumer behaviour.

Martin mentioned that each Estee Lauder brands have unique identities and different CSR activities, which are specific and in alignment with the image of the brands. For example since Origins, Clinique and Aveda position themselves as environmental and natural brands, consumers of these brands are also sensitive and involved with the CSR topic. Moreover, the feedback gathered from consumers also shows variety in terms of CSR activities based on the regional differences. UK and Scandinavian countries are stated as the regions where consumer awareness in terms of CSR and environmental involvement are the highest. Martin mentioned that: The consumer in Europe has more ethical values. During the recruitment process, I observed that many applicants were interested in the CSR activities of the company and I was quite impressed by their knowledge in terms of the CSR activities of Estee Lauder Companies. This shows that Estee Lauder is communicating with their consumers in terms of their CSR activities in the right way. In addition to this, the CSR impact on consumer behaviour depends on the identity of the brands. Martin exemplified by saying: MAC has a young and trendy identity while positioning itself. There is a direct relation with the brand identity and the CSR activities such as the HIV foundation- applied by the brand. Therefore, it is important that the CSR activities and the brand image have links within the consumer segment it has targeted. To sum up, the implemented CSR activities have successful effect if only the brands communicate with their consumers based on the CSR campaigns, which are in alignment within the brand image.

Question 6 was asked to find out the kind of feedback Estee Lauder Companies receives from consumers about their CSR activities.

Since Martin is not working for a CSR department, she wasnt able to share statistics about consumer feedback. But she shared her personal observations on consumer behaviour in the cosmetics industry. Martin said, she observed that there is a growing number of perfumeries dedicated to natural cosmetics products in Paris where can be an important spot for cosmetics industry. Moreover, magazines and Internet are highly influencing cosmetics consumers in terms of the green market. In addition she said that: The more the markets for organic products are increasing, the more consumers become aware and support organic production. Furthermore, it is not about safety, it is about being socially and environmentally aware. Therefore, if consumers become more aware about these issues for a specific industry they spread their knowledge and awareness for the other industries and product categories. Additionally, Martin explained that it is harder to measure consumers reaction and involvement in terms of social awareness. But, still the new generation is considered more reactive and sensitive towards social and environmental issues. She said: New generation of consumers are different. The age that they have grown up in, is continuously highlighting the problems related to the environment and the society. Therefore, they are more aware as well as interested in giving reactions towards these subjects.

Question 7 was asked to understand how important consumer demand is while creating and implementing CSR activities for Estee Lauder Companies.

Martin said that consumer demand is very much important towards CSR activities within Estee Lauder Companies. Therefore, as it has been mentioned before, family owned structure of the company has lead Estee Lauder Companies to keep its name behind in terms of CSR activities. But lately, since CSR activities became a competitive advantage for cosmetics companies, Estee Lauder also chanced its strategy regarding this issue. The company also communicates with their consumers and make them aware of what the company is doing in terms of CSR. In relation to this Martin said: CSR is a competitive advantage for cosmetics companies in general. As a cosmetics company, if you dont communicate with the consumers they dont have the chance to know about the companys contribution about social an environmental responsibility.

Furthermore, Martin mentioned about the growing pressure of NGOs in the cosmetics industry. NGOs set high standards and push for more regulations in terms of safety issues for the cosmetics products. As a result, CSR topic creates attention and awareness in the media as well as in the public. In relation to this, consumer awareness and demand is increasing for the cosmetics products.

4.6 Competitors CSR Activities


Question 8 was asked to find out Martins opinions about other cosmetics brands, which apply successful CSR strategies. Moreover, question 9 was asked to learn if CSR is a way to differentiate from competitors. Martin stated that LOreal, Unilever and PG are the companies, which apply successful CSR strategies. The reason behind their success is that these companies are aware of the importance of communicating with their consumers regarding their CSR activities. Moreover, she took attention towards the financial advantages of CSR applications in the long run. These companies are aware of the difference, which CSR activities can bring for them in the stock exchange. Martin said: A global company has no other choice than communicating with their consumers regarding their CSR activities in order to gain competitive advantage.

On the other side, she mentioned that it is very important to apply the same safety and environmental regulations at the all regions where the company operates. Therefore, she said that in the cosmetics industry the safety regulations are significantly varied from region to region. Estee Lauder Companies applies the strictest regulations for all regions in order to treat every customer in the same way. As a result, she considers Estee Lauder Companies as a responsible company while comparing it to the competitors in an objective attitude.

4.7 CSR and Innovation


Question 10 is asked to learn if CSR is an innovative idea/strategy to change consumer behaviour for Estee Lauder Companies.

Martin mentioned that CSR can be considered as a stimulus to innovate. Therefore she said: We push our suppliers to innovate, to provide more environmental friendly packaging materials. For example Aveda, which is a unique cosmetics brand in terms of its

organic/natural image, has been bought by Estee Lauder Companies. Aveda products consist of natural ingredients as well as innovative recycled packaging. After the purchase of Aveda, Estee Lauder Companies changed and adopted all packaging processes into recycled packaging materials. However, based on the characteristics of the cosmetics production, it is impossible to produce fully natural products for all the cosmetics industry. Martin explains this issue by saying: Not all cosmetics products can be pure organic because of the unavailability of the ingredients. The production of the organic ingredients is very limited. This is because the plants have to grow for a time period and this will limit the availability to produce pure organic products. Therefore, even though consumer demand for organic products is growing, it is impossible to expect all cosmetics products to be 100% organic. As a result, the innovative contributions for the cosmetics products are being accomplished more based on the packaging. In relation to this, consumers who are sensitive about environmental issues will appreciate the innovations in recycled packaging and waste minimisation as well.

Question 11 was asked to learn more about the innovative CSR activities in the cosmetics sector and also specifically the contribution of Estee Lauder Companies towards the issue.

The most well known topics within innovation in the cosmetics industry can be listed as innovation through the environmental packaging, supporting employees and social causes. In addition, Estee Lauder Companies is performing innovative CSR activities through its packaging processes, societal contributions and empowerment of internal commitment. For example, Aveda has been running a recycled packaging policy and La Mer has been promoting the regeneration of the sea kelp forest. Moreover Estee Lauder Companies helps kids and adults how to read in USA. Since the headquarters of the company is located in New York, Estee Lauder Companies donates money to protect and to clean the Central Park voluntarily. In addition, the company gives humanitarian support such as rebuilding schools in Haiti. One of the reasons for this aid is to support the employees of the company since Estee Lauder Companied has many Asian employees. By doing so, the company aims to create synergy and emotional links with the employees who in turn feel more committed to the company. These activities are contributions for the societal causes, which have no relation to the cosmetics industry. As a result, Estee Lauder Companies applies innovative environmental activities in relation to its production processes as well as societal activities,

which are not related to the cosmetics industry. Therefore, the consumers appreciate these contributions as a responsible cosmetics company.

4.8 Future CSR Opportunities


Question 12 is asked in order to learn if CSR will play a bigger role for cosmetics companies in the future.

Martin mentioned she truly believes that CSR is and will become more important in the cosmetics industry. She added by saying: There is a tendency in underestimating the importance of cosmetics products. Moreover, this is a blind judgement in the sense of underestimating because consumers can never stop using them as well. For example, consumers may never stop using soap even though they may underestimate the value of the product. In addition to this, Martin said that NGOs role over the cosmetics industry is remarkable in terms of changing the attitude of the consumers towards the industry. NGOs are striving for more regulations that take great attention in the media, which in turn will increase awareness and sensitivity of consumers. As consumer awareness and sensitivity increase, CSRs role will increase more in the future based on the demand from the stakeholders including customers. Although cosmetics industrys role shouldnt be underestimated, the word cosmetics reflects a superficial meaning for many people Martin explained. And she continued explaining, since the majority of the people who are involved in making regulations are male, this also triggers the underestimation of the cosmetics industry. Therefore NGOs play a crucial role in order to change this attitude. Martin also mentioned that the Trade Associations involvement within cosmetics industry is quite important in the sense of introducing industry guidelines. To sum up consumers, media and legal authorities awareness will lead to more CSR activities in the cosmetics industry in the future.

Furthermore, within question 13 it is aimed to figure out what can be done in terms of CSR activities in the future for the cosmetics industry.

Martin mentioned that currently, CSR implications are used as a way of creating differentiation and gaining competitive advantage. This means that the cosmetics companies have their own CSR policies and activities rather than being a part of the industry approach towards social responsibility. It is very important for a cosmetics company to have initiatives

in terms of CSR at the corporate level. Having CSR initiatives at the corporate level stand for having CSR visions, which are applied, in all the regions that the company operates in the same way. Moreover, these initiatives of each cosmetics company should be a part of the industry approach. By having an industry approach, the impact on the environment and the society will be greater and more effective.

4.9 Estee Lauder Companies & 3C-SR Model


CSR has become a way to differentiate and to gain competitive advantage. As mentioned in the Literature Review, the 3C-SR Model is a way to evaluate whether a company is a good corporate citizen by analysing its CSR strategy and activities. The model emphasizes that CSR can be a means for a company to be socially responsible and to achieve long-term success and competitive advantage. The model consists of 3 components, which are ethical and social commitments, connections with partners in the value network and consistency of behaviour over time to build trust (Meehan et al, 2006). These three components are interrelated with each other and are equally important in order to be a good corporate citizen.

Estee Lauder Companies has a broad range of CSR activities at corporate level as well as at the brand level. The CSR policy of the company can be evaluated with 3C-SR Model in order to analyse whether the company is a good corporate citizen. In relation to this, the companys commitment, connections and consistency of CSR are analyzed.

4.9.1 CSR Commitment of Estee Lauder Companies With ethical and social commitment is meant the ethical standards and social objectives of Estee Lauder Companies. These standards and objectives can be translated into the mission, strategic objectives, strategy programmes and policies and the companys culture. The standards point out how committed a company is to being socially responsible in the long run instead of focusing on short-term profits and benefits of CSR.

The social responsibility commitment of Estee Lauder Companies consists of two parts. The first part is to maintain the companys own production processes in order to reduce negative impacts on the environment. The second part is to continue to be an active member of sustainability by supporting people, projects and causes outside the company. The second part

in particular, shows the voluntary aspect of the companys commitment towards social responsibility. As mentioned in the companys background, the mission of Estee Lauder Companies is stated as the following: Bringing the best to everyone we touch. The word best is described as the best people, the best products and the best ideas. These 3 pillars form the core of the companys culture and the companys strategy. The CSR activities are necessary for Estee Lauder Companies to have the best people, the best products and the best ideas. In terms of the internal CSR activities such as the Think Smart Program and Health & Wellness Program the company shows its commitment to its employees and is able to empower them to stay committed to the company. Moreover, through these programs Estee Lauder Companies is able to attract and keep the best employees. In terms of the external CSR activities such as the product safety & no animal testing and environmental activities, the company is able to bring the best products (quality as well as socially responsible) to the consumers. Also, the company touches people by helping local communities as well as through their foundations (Breast Cancer Research Foundation and MAC AIDS Fund).

In addition to the mission of the company, Estee Lauder Companies builds its vision and reinforces its position as the leader of prestige cosmetics on three factors: Imagine, Integrate and Innovate. Everything the company can imagine will be achieved. Estee Lauder Companies further integrates and spreads its knowledge, experience and resources throughout its brands, regions and functions to become more powerful. Finally, by innovating, the company is able to maintain being the forefront of the latest cosmetics innovative ideas/products/services. These three factors are also incorporated into the companys CSR activities. First of all, with the Think Smart Program the employees are able to share their ideas on how the company can operate more cost effective. Also, the brands have their own CSR initiatives, which reflect the brands identity. These are examples of the factor Imagine, which show that the company is very much open to new ideas and initiatives and these ideas can be realized as well. Secondly, a good example of integration is sustainable packaging. Aveda is the first brand of Estee Lauder Companies that started a sustainable packaging policy. Based on the experience and knowledge gained through Aveda, Estee Lauder Companies decided to develop a corporate policy for sustainable packaging. Thirdly, innovation is achieved with imagining and integrating. Estee Lauder Companies believes that

having satisfied and committed employees is necessary for the growth of the company. In the Annual Report 2009 it is stated that hundreds of groundbreaking product and program innovations over the years come from the collaboration efforts and commitment of the diverse employees who bring different approaches and ideas to the company. Sustainable packaging and the conservation measures to reduce water usage are examples of process innovation, while Avedas natural products are examples of product innovation. This shows that internal and external CSR activities are inter-related. The link between internal and external activities is best described by Estee Lauder Companies itself when it mentions that the goal of its corporate citizenship is to increase both shareholder and community value by stating: The progress of its environmental and safety programs, coupled with its philanthropic initiatives, helps to make certain the company will be able to continue to Bring the Best to Everyone We Touch (Estee Lauder Companies Annual Report, 2009).

Meehan et al mention that the societal validity of a company commitment will be greater when they are in alignment with emerging external frameworks for ethical and social values. Estee Lauder Companies has received several external frameworks and certificates for its CSR activities. For example, seven products of Aveda have received the Gold Level Cradle to Cradle (CSC) certification, which made it the first cosmetics brand to have been awarded the Gold Level C2C certification. The C2C certification verifies that a company uses healthy materials and/or has eco-intelligent design (MBDC, Cradle to Cradle). Aveda received the Gold Level certification for the ingredients used in its products and the Silver Level certification for its packaging. In addition, Estee Lauder Companies received the ISO 14001 certification for its manufacturing sites. This certification gives requirements for environmental management systems and shows that Estee Lauder Companies desires to operate in an environmental friendly way. These standards can be seen as endorsements and can be used as communication tools since they are a measure of the companys commitment to environmental friendly activities.

In order to ensure long-term commitment and positive corporate image, it is necessary to have business networks that share the same commitments. The business network consists of suppliers, business partners, allies and customers. The shared commitments with upstream and downstream partnerships are necessary to implement a companys CSR activities and to

increase a companys credibility. Estee Lauder Companies communicates its CSR commitment to its suppliers in terms of environmental and safety standards of raw materials.

Furthermore, commitment is closely linked to consistency. A company can have a mission and objectives related to CSR but if these objectives are developed for short-term profits, corporate legitimacy and credibility will decline. Consumers are able to find out through different media channels (internet forums, articles, TV documentaries, NGOs) about the lack of CSR commitments of companies. In terms of consistency, the company describes its CSR commitment by stating the following: The Estee Lauder Companies realizes that to ensure the long-term success of our Company, our financial goals need to be integrated with the human and ecological impacts of our business.1 Furthermore, Martin mentioned that the company has been socially responsible since its establishment, but was late in communicating its CSR activities to the consumers. For example, the first CSR report of Estee Lauder Companies was published in 2007. This means that even though the company has been socially responsible for years, consumers were not fully aware of what the company is exactly doing in terms of CSR for a long time.

In conclusion, it can be said that Estee Lauder Companies has a long-term CSR commitment. The CSR strategy of the company can be defined as the activities that are managed at corporate level (and therefore apply to all brands) and activities that are managed by the individual brands. The internal CSR activities are all at corporate level while the social activities are categorized at corporate and/or brand level. The commitment of the company is further recognized through several certifications in which stakeholders are able to indentify Estee Lauder Companies as a socially responsible company. However, in order to increase its corporate image, the company needs to communicate more to consumers and other stakeholders in order to make them aware of the companys internal and external CSR activities.

4.9.2 CSR Communication of Estee Lauder Companies In this section, connections within the value network as the second important element of implementing 3C-SR model, is going to be analyzed within Estee Lauder Companies.
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Connections within the value network, in other words the stakeholder approach, ensure mutuality of interests and uniform commitment to shared values across the value network (Meehan et al, 2006). The stakeholders of Estee Lauder Companies can be defined as their suppliers, business partners, allies, NGOs, governmental institutions, employees and consumers. Moreover, in order to succeed in communicating to consumers in terms of the CSR activities of the company, the relationships with the rest of the stakeholders have to be well managed as well. Negative reputation of the allies and partners, negative progress reports of the NGOs and governmental institutions regarding the companys CSR activities and the wrong fit between the selected suppliers and the company in terms of the environmental and social values will effect consumers evaluations towards the image of the company. In relation to this, Normann and Ramirez argue: Value occurs not in sequential chains but in complex constellations. Therefore avoiding stakeholder deficit, which leans on narrow operational focus in choosing the right suppliers and building the right connections with the stakeholders in the value network, carry significant role.

In terms of selection of the suppliers, Estee Lauder follows EHS (Environmental Health and Safety Supply Chain) requirements. Each supplier has to sign off that they can meet corporate EHS specifications of Estee Lauder Companies in terms of environmental and safety issues, transportation and waste disposal. In the CSR activities section of the Annual Report of Estee Lauder Companies, which was published in 2009, it is explained that 99 percent of the production and sourcing of the companys raw materials are outsourced. Therefore, in order to be totally consistent with the CSR vision of the company, Estee Lauder Companies expects from its suppliers that they comply with all applicable government regulations for the country in which they reside. It is also expected that suppliers adhere to the provisions specified in the Supplier Code of Conduct of the company. Moreover, Supplier Code of Conduct outlines the companys expectations for suppliers environmental and social performance, including components addressing wages and compensation, human rights, child and forced labour, safe working conditions, anti-discrimination, freedom of association and environmental responsibility. In addition, Raw Materials Coding Package is being updated to help suppliers provide the finest ingredients that meet the strict environmental and safety standards of Estee Lauder Companies. Furthermore in order to ensure compliance, a process of auditing for the top-line suppliers is established and the company is still developing protocols in order to respond to audit results in an appropriate way (The Estee Lauder Companies Annual

Report, 2009). Some of the accomplishments in terms of environmental supply chain management of the company are listed below: - Six suppliers of Estee Lauder Companies have committed to using renewable energy for the manufacture of their parts. - The manufacturer of Avedas folding cartons runs their plant with 100% wind power. - Origins has also made a commitment to purchase folding cartons only from manufacturers using renewable energy. - In 2007, after the announcement of the companys commitment to engage their global packaging suppliers in supporting and furthering their goals, Estee Lauder Companies has also standardized the post-consumer recycled (PCR) content of their shippers and carriers to 80 percent and increased their supplier commitment to renewable energy.

In terms of the connections within NGOs and governmental regulations, Estee Lauder Companies has shown great concern as well. Based on the information gathered through the interview, which is conducted with Estee Lauder, Isabelle Martin mentioned that different regulations are applied in the cosmetics industry based on the legislations of each country. The companys point of view is to treat every consumer in the same way. That is the reason why, Estee Lauder Companies applies the strictest regulations of the country that it has been operating and centralizes its CSR operations and activities. Moreover, the goals that have been set by the NGOs are taken into serious consideration in order to serve the best to their consumers in terms of social and environmental responsibility as well as protecting the companys reputation. Therefore, the company engaged with Look Good Feel Better program, which reflects the industry initiative and is run by the US Trade Association in the US. The program consists of spreading free products at the hospitals, providing volunteer beauticians in order to give make up sessions. Within this program, the initiative of the industry is being combined with the company initiative. Moreover, many cosmetics companies worked together as partners in order to support the Look Good Feel Better campaign. This campaign is a great example of how rival companies can work together with the support of Trade Association in order to help people. In addition, one of the most remarkable points of this campaign was in terms of assuring credibility of the act. Therefore, no company mentioned its name on the products. Since many consumers think that CSR

activities are done part of a marketing campaign, this campaign was important to support the credibility of the CSR activities. In other words, it is done because of the specific interest of the companies in terms of CSR.

The connections with the employees are an important part of its internal CSR activities for Estee Lauder Companies. Executive Chairman of Estee Lauder Companies says: Great companies depend on great people (The Estee Lauder Companies Annual Report, 2009). This vision of the company in terms of its employees is based on satisfying them in terms of their work place, work conditions and safety conditions as well as making employees contribute to the CSR activities of the company. Estee Lauder Companies state on their website that all employees have a role to play and a stake in the success of their environmental and safety programs. By doing so, the company becomes overall committed to its CSR vision and mission while employee commitment towards the company increases as well. Through the connections with the employees -which have been explained in the internal CSR activities section in details-, Estee Lauder Companies aims to increase employee satisfaction and commitment by encouraging and supporting their employees in terms of their health and well-being, providing an inspired work environment and making them to contribute more in CSR activities of the company in order to make them more attached to the companys CSR values. Therefore, the annual report highlights the Health & Wellness Programs of the company that focuses on the programs, which are provided for their employees such as health checkups, skin cancer screenings, mammograms, fitness programs and other activities. Moreover, the employee program, which is called Think Smart, is developed to encourage the employees to submit their ideas in terms of coming up with efficient and smart ideas. In addition, the program benefits employees as well as the company itself to come up with more efficient and cost-saving solutions.

Furthermore, consumers are stated as one of the most important circle in the stakeholder chain for Estee Lauder Companies. Therefore, consumers involvement through companys CSR activities in terms of understanding their feedback and demands are essential. 2009 Annual Report of the company states that: We recognize that our customers share our commitment to protecting and preserving the environment. Each year, thousand of consumers worldwide contact us regarding our environmental practices. Consumer queries on our environmental packaging principles have nearly tripled since we published our first CSR report in 2007. As

it has been mentioned in the literature review, it is very important for the consumers that the ingredients used for the cosmetics products are traceable. This is the reason why the chosen suppliers for the company are an important aspect for Estee Lauder to strengthen the image and to ensure credibility. Therefore, the connections with the stakeholders are not in sequential chains but operate together as constellations (Meehan et al, 2006).

4.9.3 CSR Consistency of Estee Lauder Companies In this section consistency, as the third important element of implementing the 3C-SR model, is going to be analyzed within Estee Lauder Companies. Consistency refers to the behavioural element of social resources over time and across all facets of an organizations operation (Meehan et al, 2006). Therefore the CSR activities of Estee Lauder Companies have to be consistent in time in order to be considered as credible for cosmetics consumers. Consistency has to be obtained in terms of the companys mission and vision statements, selection of business partners and suppliers, which also have to be committed to socially responsible values. In other words, even though Estee Lauder Companies shows successful implications of CSR, its suppliers and business partners have to share the same CSR values and they all have to work in a consistent way to create and maintain credibility. Moreover, since consumer awareness is increasing towards environmental supply chain, it is crucially important that Estee Lauder Companies is faithful to this issue. To sum up, Estee Lauder Companies espouses social commitments within its value network, which is significantly important to provide an advanced level of consistency in terms of CSR activities.

Furthermore, besides having consistency in the selection of suppliers, consistency has to be obtained towards employee satisfaction and employee safety in order to increase organizational commitment. Employee wellness activities, recognition awards, community environmental protection projects, and regular internal communications are mentioned in the website of the company as activities accomplished in order to have healthier, motivated, involved, and better-informed employees. Estee Lauder Companies believes that consistent employee satisfaction is an important aim of the CSR vision of the company. Therefore, the reason why the consumers have mentioned Estee Lauder Companies during the interviews depends on the remarkable communication created within the stakeholders in a consistent way.

Estee Lauder Companies established the environmental sustainability program in 2007 and published their first CSR reporting which highlights the commitment towards its stakeholders. Moreover, in order to develop the CSR vision and activities of the company, the second CSR Report was published in 2009. These published CSR reports are significantly important in order to recognize the progress achieved by the company in terms of CSR. Estee Lauder Companies stated goals in terms of employee safety, global philanthropy, sustainable packaging, research and development, environmental stewardship and supply chain. Moreover, the companys corporate strategy is based on the commitments and continuous improvements, which are crucially important to ensure consistency of the CSR vision of the company. In addition, being attached to consistent CSR missions and visions lead Estee Lauder Companies to continuous developments in terms of CSR- based on the goals mentioned above- in other words helps the company to maintain consistency in terms of continuous developments.

To sum up based on the 3C-SR model, it is significantly important that the companies are committed to their missions and values in terms of CSR and are sharing the same values with their stakeholders regarding CSR in a consistent way. The commitments, connections and consistency aspects of the company, which have been mentioned above, make Estee Lauder Companies a good corporate citizen. In addition, as it has been stated in the literature review, companies can be categorized as being reactive, defensive, accommodative, and proactive based on their CSR involvement. Moreover, beyond being proactive is stated as implementing strategic CSR (Porter and Kramer, 2006). Estee Lauder brand can be categorized as a proactive brand in terms of its CSR activities, which is anticipating social responsibility and doing more than required. On the other side some of brands of Estee Lauder Companies such as Clinique and Aveda are implementing strategic CSR because of the aspect that they do not only accept and anticipate social responsibility but also integrate it into their core businesses. Therefore the difference in implementing 3C-SR aspects creates the difference in CSR involvement.

4.10 Conclusion
Within the analyses of Estee Lauder Companies and its brands, it is aimed to come up with answers towards one of the research questions of this paper. The research question is: How do cosmetics brands define CSR? To answer this question, three sub questions are formulated in order to understand whether CSR can be used as a way of differentiation, if CSR related innovation has an influence on changing consumer behaviour and how important consumer demand is for cosmetics brands in relation to the CSR activities.

1. Can CSR be used as a way to differentiate in the cosmetics industry? Due to the competitive characteristics of the cosmetics industry, continuous developments are significantly important in order to gain higher market share. Therefore, differentiation created based on product characteristics is not enough to succeed. Cosmetics companies search for other ways to distinguish themselves in order to be unique. In relation to this, companies focus on building brand image and creating emotional links with their consumers rather than just providing quality products. Based on this idea, the cosmetics brands focus on CSR activities to strengthen their brand image (through creating links with CSR). During this research, it is observed that many companies establish CSR vision and missions and integrate CSR activities into their core businesses. Since consumers are becoming more aware about CSR based on the influence of media channels, CSR is valued more and evaluated as a differentiation factor for consumers.

In relation to the company analysis, communicating through the CSR activities was not a preferred attitude of Estee Lauder Companies for many years as a company strategy. However, it is observed that it became necessary for Estee Lauder Companies to communicate the CSR activities with the consumers due to the increased consumer awareness, competition and the need to differentiate. As a result, differentiation can be achieved through CSR activities in the cosmetics industry.

2. Does CSR-related innovation have an influence on changing consumer behaviour? Continuous developments are being driven by innovative ideas in the cosmetics industry. Moreover, product innovation is not enough to succeed. Companies search for different ways to innovate and differentiate themselves. Therefore, cosmetics companies implement CSR strategies and activities in order to differentiate themselves from competitors and consider it

as a resource that they can run innovative businesses. Due to the increased awareness of the consumers, which is observed through consumer interviews (consumers want to be informed about CSR and value it), CSR related innovation is significant in order to influence consumer behaviour.

Moreover, Estee Lauder Companies states that consumers are aware of and value the CSR practices of the company. Even at the recruitment processes, candidates show great concern in CSR involvement of the company. This shows that CSR activities have an influence on consumer attitude. In addition, the increasing number of natural cosmetics brands/shops is a reflector of changing consumer behaviour in return of having increased demand.

3. How important is the consumer demand for cosmetics brands in terms of CSR activities? Consumer demand is important while implementing CSR activities in order to enhance positive brand image. Cosmetics companies improve their CSR activities based on the consumer feedback. In addition, consumer demand is influenced by mass media, NGOs and governmental policies as well. On the other hand, CSR activities cannot always be developed based on the needs of the consumers since consumers may not have sufficient knowledge and information based on the importance of the issue. In that sense, it is important to educate consumers in order to come up with sufficient evaluations based on the consumer demand. Due to this fact, CSR activities create consumer demand. In relation to this, it is observed that Estee Lauder Companies educate its consumers in order to create involvement, which leads to increased consumer demand. Moreover, the CSR activities have to be in alignment with the brands identity. Therefore, if consumer demand for CSR activities does not comply with the brand identity, the expected impact cannot be created and CSR activities cannot be influential on consumer behaviour. In addition, Estee Lauder Companies apply different CSR activities for different brands in order to meet different consumer demands. To sum up based on the conclusions of the sub questions; the research question can be answered by saying that cosmetics companies define CSR as an innovative way to differentiate themselves from competitors in order to create consumer demand towards socially and environmentally responsible cosmetics brands.

5. Consumer Analysis
This chapter focuses on analysing the results of the interviews that are conducted with the consumers.

5.1 Demographic Analysis


This section is going to provide information about the demographic aspects of the interviews, which are related to the interview questions 1, 2 and 3. These questions are sequentially asked to understand: How old they are; What their nationalities are and What their occupations are

Therefore, 25 interviews were held within the age range of 18 to 40 years old. Interviewees were female consumers who live in Brussels. 15 of the interviewees were students and 10 of the interviewees were working people in different fields. Since most of the interviewees were students, the majority of the age range can be stated between 18 to 25 years old. In addition, the interviews were conducted in Brussels and based on the multinational characteristics of the city the interviewees were not just from Belgium but also of different nationalities. The age, nationality and occupation distribution of the interviews can be found in the Appendix 5.

5.2 Analysis of Cosmetics Brands


After analysing the demographics, question 4 and 5 are asked to find out: The favourite cosmetics brands of the interviewees and; The factors they find important while buying cosmetics products.

In terms of the favourite cosmetics brand names of the interviewees, it is seen that Clinique and LOreal are mentioned as the most favourite cosmetics brand names. Moreover Estee Lauder, The Body Shop and MAC are answered as the second most favourite brand names. The figure in the next page shows the distribution of the favourite cosmetics brands mentioned by the interviewees.

Number of People 7 6 6 6 5 4 4 4 4 3 3 3 3 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 Clinique Max Factor Avon Flormar Channel Bobbi Brown YSL Rituals La Rosh Posay Sisley Cover Girl Estee Lauder Dior Clarins L'Oreal Nivea The Body Shop Vichy MAC Maybelline Lancome Biotherm OPI Figure 7: Favourite Cosmetics Brands In relation to interview question 4:What are your favourite cosmetics brands? Brand Names

Favourite Cosmetics Brands

Furthermore, most given answers as purchase factors are price and quality followed by duration and ingredients factors. In addition, based on the answers of the interviewees it is seen that there is a tendency in relating price with the expected quality, duration and with the nature of the ingredients. In order to be more clear, the nature of the ingredients refer that the products are fragrance free, not allergic and do not contain unhealthy chemical additives based on the answers of the interviewees. Figure 8 shows the decision factors of the consumers in term of their cosmetics product consumption.

Number of Answers 18 16 13 14 12 10 8 6 4 2 0

17

17

Purchase Decision Factors


15 6

5 1

Purchase Factors

Figure 8: Purchase Decision Factors In relation to question 5: What factors do you find important while buying a cosmetics product?

Although 16 people out of 25 have mentioned price as an important factor for cosmetics consumption, 9 people considered quality more important than the price and mentioned that price is not a significant factor for them. The reason why price is important for the majority of the interviewees is that they were students who do not earn a lot of money. Examples of the answers of the interviewees concerning these factors are stated below: The price can be higher since luxury products last longer. I dont want to buy cheap cosmetics products since my skin is very sensitive. Due to the good quality of the cosmetics products, I dont mind paying a higher price. Quality and price are the most important factors to me, but since Im a student I really pay more attention to the price of the products.

Moreover, another factor that influences the buying decision is the image of the cosmetics brands. Consumers think that the better the image; the better the quality, the longer the duration and the healthier the ingredients are for the cosmetics products. Therefore, they are more willing to pay a higher price. In alignment to this interviewees, who considered price as an important factor, stated that LOreal, Max Factor, Nivea and Maybelline are their favourite cosmetics brands. On the other side, consumers who do not consider price more important than the quality stated that their favourite cosmetics brands are Estee Lauder, Dior, YSL, Sisley, Lancme, Clinique and MAC.

5.3 Cosmetics Brands and Corporate Social Responsibility


Lately, Corporate Social Responsibility activities are also highly used while creating and/or strengthening the brand image. Most of the time, consumers believe that providing quality is the main responsibility of the cosmetics brands. Therefore, CSR activities might be a way for companies to differentiate themselves in terms of having strong and unique brand images.

In this section, it is aimed to learn within question 6 and 7: Whether consumers know socially responsible cosmetics brands and If they are aware of the CSR activities of the companies.

The figure below shows the distribution of the socially responsible cosmetics brands that consumers are aware of.

Number of Answers 14 12 10 8 6 4 2 1 2 0

CSR and Brand Awareness


13

6 1

7 2 2

6 1

6 1 2 1 2 1 2 CSR Examples

Figure 9: CSR and Brand Awareness In relation to question 6: Can you give examples of cosmetic brands which are socially responsible?

5.3.1 CSR and The Body Shop It was remarkable to figure out that The Body Shop was the most given example of a socially responsible cosmetics brand. In addition, this should be commented as a success indicator for The Body Shop since half of the interviewees recalled The Body Shop as a socially responsible cosmetics brand, whether it is one of their favourite brands or not -as it was asked in question 4-.

Another important aspect about The Body Shop is that when people are asked about The Body Shops CSR activities; all the answers were related to fair trade, supporting women rights and not doing animal testing. Figure 10 in the next page, shows examples of these cases.

Figure 10: The Body Shop advertisements against animal testing and supporting womens health.

Hence, it can be said that these activities are the ones that have social impacts that benefit the society and create indirect links with the consumers. Unlike Clinique, which builds its CSR activities on just ingredient quality -a direct purchase decision factor-, The Body Shop builds its CSR activities on combining direct and indirect purchase decision factors such as protecting animals, protecting the environment and protecting the people (consumers as well as the employees). Sophie Gasperment, the Chief Executive of The Body Shop, states in the 2009 Values Report: We believe that our values are at the heart of our commercial success and they are the key to growing our business. As we go forward we will be more creative in bringing our message to customers who are searching for brands with principles that they can trust. In doing this we will deliver more positive benefits to everyone that we touch. Moreover, The Body Shop states that theyre different regarding their values. These values act as a practical guide to decision making at all levels of the company, helping to insure that the profits are made with principles. And these values are stated as being against animal testing, supporting community trade, activating self esteem, defending human rights and protecting the planet at the global web site of the company. Therefore, it is believed the reasons that lie behind ranking The Body Shop (top of mind awareness) as the highest in Figure 9, depends on the values, which were mentioned by Gasperment.

5.3.2 CSR and MAC MAC, Estee Lauder, and Clinique were stated as the most given answers in terms of socially responsible brand names after The Body Shop. Also MAC and Estee Lauder focus on societal issues such as establishing HIV and breast cancer foundations. The consumers within its act towards HIV recall more specifically MAC by using famous spokespersons such as Lady Gaga and Cyndi Lauper to create awareness. The meaning transfer theory is the most relevant one while brands are using celebrities in their advertisements. The central premise of the meaning transfer theory is that a celebrity encodes a unique set of meanings, which if well used can be transferred to the endorsed product (Tellis, 2004). Firstly, the meanings encoded within the image of the celebrity have to be aligned with the brand image. Secondly, the meaning transfer between the image of the celebrity and the brand has to be delivered in a desired way to the consumer. And lastly, customers are expected to capture the meanings transferred with the ad after purchasing the product. (Tellis, 2004) Therefore, while using Lady Gaga and Cyndi Lauper as endorsers, MAC applies the meaning transfer theory in a successful way. This is because; both Lady Gaga and Cyndi Lauper are extreme characters that MAC can align with its own brand image to attract consumers. Moreover, printed advertisements are chosen as the communication tool in order to transfer the message of the campaign to the consumers. Figure 11 shows the advertisement used for the HIV foundation created by MAC.

Figure 11: MACs Viva Glam Campaign advertisement. The quote below the picture: Every cent from the sale of MAC Viva Glam lipstick and lipglass goes toward helping women, men and kids everywhere affected by HIV and AIDS.

In addition, MACs campaign called Back-to-Mac, aims for making consumers to return 6 empty MAC products and receive 1 new lipstick of their choices as a reward. By these activities, the brands objective is to create environmental awareness (through recycling) and also to strengthen its brand image in terms of being considered as a socially responsible company.

5.3.3 CSR and Estee Lauder Another example of a socially responsible cosmetics brand mentioned by interviewees is Estee Lauder and its Breast Cancer Awareness (BCA) campaign. The brand focuses on raising awareness for breast health every October, which is the month to fight for breast cancer. One of the interviewees also stated that during that month make-up artists go to the hospitals to visit patients who are suffering from breast cancer and having make-up sessions with them as a responsible act. Moreover, during that month Estee Lauder spreads flyers, which inform and make women aware of how to screen breast cancer by themselves. Furthermore, during that month several products are selected and promoted differently-to take the attention- while donating the amount gathered, to the breast cancer foundation.

5.3.4 CSR and Clinique While consumers recall the CSR activities of The Body Shop, Estee Lauder and MAC in terms of supporting the society and the environment, the reasons for recalling Clinique are more related with the ingredients used in the products. When the interviewees are asked to give more details about Cliniques CSR activities, it is understood that customers perceive Clinique as a quality brand in terms of offering 100% fragrance free and allergy tested products. Therefore, it can be said that Cliniques CSR activities directly focus on the consumers and their personal experiences.

5.3.5 Limited CSR Awareness The third most given answer for question 6 was I dont know. Moreover, I dont know answer can be divided into two categories which consumers mean that they really dont know any brand names/CSR activities or consumers who cannot remember the brand names but still are aware of the CSR activities within the cosmetics industry.

The interviews showed that interviewees had hard time in remembering cosmetics brands (brand recall) or relating the brand names within their CSR examples although they were aware of the CSR activities. Although 6 women out of 25 had no brand name and an example of a CSR activity of a cosmetics brand in their mind, it was still remarkable to collect the examples mentioned above since CSR is still a young concept for consumers. In that case, repetition and communication tools are significantly important to create brand awareness. It is seen that the recalled brand names are the ones, which continuously mention their CSR activities. For example Cliniques slogan is exactly what the interviewees recalled as an example of the companys CSR activities, which is Allergy tested. 100% Fragrance Free.

The Body Shop is another successful cosmetics company in terms of building CSR awareness. Whenever a consumer enters The Body Shop store, every time she hears/reads/experiences a CSR related impulse so that, the consumers can create a bridge between the brand name and the social responsiveness of the company. This is the reason why these brand names are the most recognized and recalled ones in terms of CSR. In that case, effective and repeated advertising carry an important role to make consumers aware and even persuaded. Tellis (2004) says: Some advertisers may leap to the conclusion that even if an ad is entirely ineffective now, time and repetition will ensure its ultimate success. Another way of stating the same premise is that advertising takes a long time to wear in with consumers. From this reasoning arises the recommendation that even if advertising seems ineffective initially, persistence with the campaign will ultimately bear fruit (Tellis, 2004). For example, The Body Shop integrates CSR related activities into its vision, mission and the overall philosophy of the company. Moreover, The Body Shop chooses to reflect this point of view within different ways of advertising continuously. In addition, as it has been mentioned in the methodology section, the way The Body Shop manages with commitment, value connections and consistency issues (based on 3C-SR Model) is the reason why consumers identify The Body Shop as a socially and environmentally responsible company.

5.4 CSR Advertising and Persuasion


Advertising is an important route to persuasion in terms of changing consumers opinion, attitude or behaviour as a way of marketing communication. Moreover, persuasion through advertisements can be achieved through the central route and/or the peripheral route. The route by which an advertisement is able to persuade consumers depends on the involvement

of the consumers and how much they think about the message of the advertisement. When people have both the motivation and the ability to evaluate a message, their likelihood of thinking about it will be high. They will look for and respond to strong arguments in favour of the message and counter what they think are weak reasons. This route of potential persuasion is called the central route. On the other side, If consumers have the motivation but lack the ability to evaluate a message, they are likely to respond to cues associated it with the message. This form of persuasion is called the peripheral route (Tellis, 2004). The Elaboration Likelihood Model (ELM) summarizes the routes of persuasion since understanding how persuasion works is significant in order to analyse consumer behaviour for cosmetics products through CSR related advertising.

The chosen route of persuasion depends on the characteristics and the industry of the product. In other words, it is not right to comment that one way of persuasion route is superior to the other one. Each routes of persuasion can be effective for some specific product categories. In addition to this, there are some general assumptions for specific industries based on the characteristics of the products and the characteristics of their consumers. Consumers motivation, ability and opportunity for specific products may differ from one industry to the other. For example, there is a clear difference in terms of persuading consumers when they consider buying a car or cosmetics products. When consumers think of buying a car, they are more involved in the need of having more information and also the ability to process that information. On the other side when consumers buy cosmetics products less information is needed, which makes it easier to process the information, in order to give the buying decision. To sum up, since the ability of the consumers to process the information is significantly varied, the central route or the peripheral route is chosen for specific products to communicate with the consumers based on the characteristics of the product or the industry.

During the interviews it is observed that consumers give their purchase decisions based on the process of feel-learn and do (in relation to the Foot-Cone-Belding (FCB) grid) towards questions 13 (Have you ever bought a socially responsible cosmetics product after being informed at a store?) and 14 (What kind of CSR activities will lead you to change cosmetics brands that you are loyal to?). Feel-learn and do processes stand for what consumers feel about the brand images, what information they have in terms of the cosmetics companies CSR activities and lastly which brands to buy. Based on this process consumers decide on

their purchase decisions as well as changing their loyal brands. Especially the learning part is very important when CSR is the argument for persuasion since consumers dont have much information regarding this issue.

5.4.1 Persuasion and CSR Driven Cosmetics Brands Based on the characteristics of the cosmetics industry, the peripheral route is the most chosen way to persuade consumers through advertising. The peripheral route is used when one or more of the MAO (motivation, ability, opportunity) factors is/are low. Cosmetics products are quality products that are bought for their quality and for aesthetic reasons. Therefore the motivation, ability or opportunity aspects are not the same as the products in the first, third and the fourth quadrant of the FCB grid. (Methodology, Figure 6) The buying decision process is influenced more by the affective elements for the cosmetics products, which represent the feelings associated with the products. Affective elements stand for the peripheral cues such as the image of the endorsers, background music, humour elements and the number of arguments used (De Pelsmacker et al, 2007). Consumers product decisions require high involvement whereas less information is needed during the peripheral route processing for the cosmetics products. Moreover the brand identity and the message of the advertisement, which are used to communicate with the consumer through the peripheral routes, have to be aligned in order to create or strengthen the brand image. The sum up, the reasons why the peripheral route is preferred by the cosmetics brands through their advertisements as a way of persuasion are stated as the following: -Since less information is needed for the purchase decision of cosmetics products, cosmetics brands need to focus on the affective elements of the products/brands. -Consumers are influenced by the emotional links more than the information given with the words and numbers in a cosmetics advertisement.

Using emotions have several advantages since the affective elements are important in order to persuade consumers in an advertisement. Firstly the stimuli, which are created in order arouse emotions, draw the viewers into the action and distract them from the advertisers intention to persuade. Secondly, emotions require less effort from the viewer since affective elements mentioned in the advertisements such as pictures, music and actions require less cognitive effort of the viewer. Thirdly, the emotion-arousing stimuli are considered more interesting by the consumers. In addition, these affective elements are easier to recall than the factual

evidences and emotions might be remembered longer than the arguments. And lastly, emotions may lead consumers to change their behaviour sooner than the logic would (Tellis, 2004). De Pelsmacker (2007) also states that: The reason why consumers start paying more attention to peripheral cues is that in many ads peripheral cues form the only processable information under circumstances of low motivation, limited ability or limited opportunity. Advertisements without attractive peripheral cues, but with an easy-to-process, productrelated message might also work under low MAO, simply because the cognitive resources to form counter-arguments are lacking. Moreover, heuristic evaluation, which is having inferences based on the cues in order to form cognitively based attitude, is important when one of the MAOs is low. Therefore, heuristic cues may be used by consumers as reassurance and credibility factors such as brand name, reputation, experts endorsing the brand and price level. (De Pelsmacker et al, 2007) Moreover, during the interview it is observed that people consider price level as a reflector of the quality, or the images of the endorsers as a source of credibility for the specific brand names. As a consequence, heuristic cues have an important impact on consumers through the advertisements during the information processing of the peripheral route. In addition, when consumers are asked in order to learn how they find out that a cosmetics brand is socially responsible, TV and magazine advertisements were the most given answers. Therefore, it can be concluded that advertisements through these communication channels are important in terms of creating/supporting brand awareness and as well as awareness through the CSR activities of the cosmetics companies. The figure 12 shows advertisements from LOreal and Lancme using famous people in their advertisements to attract consumers attention.

Figure 12: LOreal and Lancme Advertisements

Within these advertisements, both cosmetics brands aim to make use of the images of these famous spokespersons. Consumers have the idea in their mind that if Beyonce is using LOreal lipstick and Uma Thurman is applying Lancme foundation these brands should provide good quality. Especially within the quote from Beyonce saying: With this rich, creamy lip colour, my lips are irresistible. And were worth it. increases the credibility of the product/brand. In addition, consumers may want to identify themselves with these famous people as well as with the cosmetics brands. Moreover, using famous spokespersons in the advertisements can lead to positive cognitive responses and as a consequence to change consumers attitudes towards the brands in a favourable way (De Pelsmacker et al, 2007).

In terms of CSR advertising, spokespersons can be used as a way of peripheral route of persuasion in order to create credibility and to ensure the trustworthiness of the message. Spokespersons can be very influential in terms of changing peoples attitude towards responsible cosmetics consumption and consumers may feel more attracted towards the subject because of the emotional links created with the spokesperson. Since consumers are not motivated or not able to process the message through CSR related advertisements, using endorsers is a right way of persuading consumers through peripheral route.

Figure 13: Estee Lauders Breast Cancer Awareness Campaign with Elizabeth Hurley.

The figure above is an example of CSR related advertisement of Estee Lauder using a famous spokesperson. Through this ad, women are made conscious about breast cancer and made aware about breast health. The age and the identity of the endorser, the link between the spokesperson and the consumers and the right fit between the message of the advertisement and the spokesperson are significantly important in terms of the success of the advertisement. Therefore, Elizabeth Hurley is a famous, glamorous actress whose identity fits with the image of Estee Lauder. In addition because of her age (45), she is able to connect with the women about the risk factors of the breast cancer. Moreover, since her grandmother has died because of breast cancer, her experiences and advices can be more influential on consumers. Furthermore besides using celebrities as endorsers in the advertisements, experts and lay endorsers can be used based on the characteristics and roles of the communication process (Tellis, 2004). CSR is a subject that can arouse consumers emotions. Therefore, the peripheral route can be used as a way to influence consumers in terms of CSR. It is aimed to create emotional links between consumers and the cosmetics brands rather than developing cognitive attitude formation that is making consumers carefully think about the substance of the message. Consumers rely on how the advertisements make them feel rather than what the

advertisements tell about through the peripheral route (attitude formation) (De Pelsmacker et al, 2007). Therefore, CSR is about considering the society, environment, about being aware and feeling responsible. In that case, consumers can only be attracted through creating links based on consumer awareness and sensitivity. In alignment with the feel-learn and do process, consumers are firstly emotionally attracted to the CSR topic, secondly informed and taught about the subject and lastly led to action.

Moreover when interviewees are asked if they find it important that cosmetics companies are socially responsible, they answered as yes because they feel themselves happy and consider themselves as a good person when they make a responsible purchase. Therefore, CSR activities can be stated as a way of creating emotional links with the consumers and the peripheral route is the right way to achieve it. 5.4.2 Consumers CSR Perceptions Within question 8, it is aimed to understand: If consumers really appreciate CSR or consider it just as a marketing tool, in other words just green washing -even though the consumers remember CSR activities of the cosmetics brands-.

Based on the comments of several interviewees, cosmetics industry is meant to create a difference in terms of physical appearance and physiological mood. Hence generally talking, cosmetics industry has to reflect uniqueness within itself. This is the reason why the interviewees werent considering CSR activities as just green washing but as a clever concept to be different. CSR applications are beneficial for companies as well as the consumers and the society.

On the other hand, not all the consumers were that positive in this case. Several interviewees were commenting that they would definitely search for information on the websites after learning about cosmetics companies social commitments such as searching what they have done before or whether having certificates or not (in terms of including scientifically proven healthy ingredients). Some other comments of the interviewees are as the following: I dont know if I believe that it makes a difference but if I hear negative reports, I will not buy the products.

I dont believe that luxury brands will do it just for doing it, because the image is important for them. So I do trust luxury brands if they say they are doing so. I do believe in it; the more focus is placed on these campaigns, the more brands will participate. In the end it will benefit the whole society. Independent from the impact of these campaigns I think the primary objective is the awareness created among the people. Of course I do. However, I assume that every company should be doing it and dont necessarily needs to use it as a communication tool.

To sum up, although there are opposing ideas in terms of the trust towards CSR activities of the companies, consumers dont mean that they and the society dont need CSR activities. They really want to see the impact of it. If companies can make consumers believe the sincerity and can prove the end results of what they are doing, the consumers are very much open to this concept. Moreover, the price levels of the products are seen as an indicator of the product quality as well as the brand image. Hence, consumers are more willing to trust the CSR activities of the expensive brands more than the others.

5.5 CSR Awareness


In order to understand when and how consumers become aware of the CSR concept in the cosmetics industry, the consumers are asked to answer: The first time that they have heard about the social responsibility in terms of the cosmetics products (question 9) and; How they find out that a cosmetics brand is socially responsible (question 10).

During the interviews conducted within 25 interviewees, quite different answers were gathered towards the first time that they have heard about social responsibility for the cosmetics products. The answers varied between I dont know or Ive just heard about it during this interview and up to 15 years ago. In addition, it has to be mentioned that the majority (13 interviewees) of the interviewees mentioned that the first time they have heard about the social responsibility for the cosmetics products was 4 to 7 years ago. One of the reasons for the varied answers for question 9 is the age difference between the female consumers. For example, when 18-year-old females were asked about the first time they have heard about the social responsibility in the cosmetics sector they answered as 3 years. On

the other side, 2 of the female consumers between 30 and 40 years old were asked the same question and their answers were 15 years. The figure below shows the distribution of the CSR awareness through the years.

Years of CSR Awarenes


Number of People 14 12 10 8 6 4 2 0 13

6 4 2 Years 0-3 4-7 8-11 12-15

Figure 14: Years of CSR Awareness In relation to question 9: When was the first time that you have heard about social responsibility for the cosmetics products?

Even the answer for question 4, which was about learning the favourite cosmetics brands of the consumers, the answers of female consumers between 30 and 40 years old were richer and more detailed than the answers of the 18 years old consumers. Therefore, the age clearly is a factor in terms of the accumulated knowledge that has been gathered through the years in order to state the level of awareness. Secondly, what has been figured out is that most of the interviewees were aware of various corporate social responsibility acts in the society such as environmental issues and animal rights. Especially consumers have had a growing interest in the biological/ecological food industry for many years. On the other hand, since question 9 was structured specifically to learn consumers awareness for the cosmetics products, the industry specification shortened the awareness period. In other words, although people were aware of the CSR activities within different industries for a long time, CSR activities of the cosmetics industry were a recent experience for them. The reason for being more aware about the CSR activities of other sectors is that the visibility and repetition is more than in the cosmetics industry. For example, the growing interest and awareness towards the biological food can be the result of the frequent informing process through different channels of the mass media. When people go for shopping at a grocery store, it is very easy to catch that a

product is biological. Biological foods have distinctive packaging such as tags, certificates or colours (generally green since it is related to the environment). On the other side, for the cosmetics products consumers have to read the information booklet given inside the package. So it is harder to get the information compared to the biological foods. For example one of the interviewees commented by saying Most of the brands provide CSR related information such as -this product is not tested on animals- within small letters in the information booklet. Therefore, expecting huge interest and awareness towards it, might be hard to achieve within short term.

Furthermore, within question 10 it is aimed to figure out how consumers find out that a cosmetics brand is socially responsible. Based on the answers of the interviewees, it is seen that the largest source of information is the mass media. 15 people out of 25 mentioned that TV and magazines are the communication channels that consumers receive information towards CSR activities of the cosmetics companies, which is the highest number of answers for this question. Internet/forums/websites, store activities, articles/newspapers are the other sources of information given sequentially based on the number of answers.

On the Internet, consumers check the web pages of the cosmetics brands and become aware of their CSR activities. Furthermore, they read forums and learn other consumers experiences and opinions, and come across articles related to CSR in the cosmetics industry. Moreover, people can read newspapers online and watch documentaries related to CSR issues and make themselves aware within their own interest. Figure 15 in the next page shows the sources of information in terms of CSR activities gathered from the interviewees.

Number of Answers 15 15 16 14 12 10 8 6 4 2 0

Source of Information
10 3 5 5 2 12 6

Sources of Information

Figure 15:Source of Information In relation to question 10: How do you find out that a cosmetics brand is socially responsible?

In addition, store activities are also one of the highest main sources of information for consumers. Store activities include store displays, having conversations with the sales persons, receiving samples and goodies, receiving information booklets, having donation boxes which people can support foundations or social acts through donating and receiving pins for special occasions (such as receiving pink ribbons during the October which is the month for breast cancer awareness, Estee Lauder).

Moreover, articles and newspapers were stated as sources of information in terms of social responsibility aspects of the cosmetics companies. Consumers like to read the articles of the newspapers and become more aware of the facts going on. Other sources of information given by the interviewees are billboards, info booklets of the products, through friends and school, employees of the company itself, celebrities as spokespersons of different CSR campaigns and scientific certificates that proves the quality of the products. In terms of providing scientific certificates, it is easier to build trust from consumers since it is a way of using professional endorsement. Consumers typically do not know enough about a new supplier to have confidence in buying its product. In this case, advertising could provide information to reduce the consumers uncertainty or it could provide other signals (e.g., endorsements) to build consumers trust. For instance, Neutrogena advertises its product as dermatologist recommended for acne-prone skin. In the skin-care category that is cluttered with many

brands each spending millions on advertising, Neutrogena was able to earn the credibility of consumers, by relying on this professional endorsement (Tellis, 2004). Moreover, one of the interviewees said: I learned a lot about CSR activities during my internship at a cosmetics company. At first, I barely knew anything but during my internship all the employees were informed and involved within CSR activities. Also, I have shared my own interpretations with my friends and I believe that it was a contribution for the awareness of the society. And it made me feel a better person. Another interviewee commented by saying: Although I was aware about environmental issues, the actions towards protecting animals and many issues related to social awareness; these were at the superficial level and I even didnt know the word CSR and what it stands for. Since I am a marketing student, during my education I have had the opportunity to learn more about this subject and became more aware and sensitive about this issue. Therefore, based on these comments, it can be said that if the companies can provide efficient education and trainings towards their employees they may increase the level of awareness of the society within their own links.

In addition, obtained knowledge at the schools are also very important. Younger generations can be educated about CSR so that they will value it even more in the future. In this way, consumers will be more sensitive about CSR when buying a product and demanding for it. As a result, companies will be more motivated to perform CSR activities. Therefore, social awareness will be increased in the long term in a consistent way. Moreover, at some universities, students are offered CSR and CSR management courses, which help them to have an advanced level of awareness in terms of CSR and this, will lead to easier recognition processes.

Furthermore when consumers are asked about the first time they have heard about the social responsibility within question 9, 10 of the 25 interviewees answered while giving The Body Shop as an example although they were not asked to give an example of a brand name. 10 of these interviewees said that The Body Shop is the brand, which has introduced them to CSR within the cosmetics sector. It doesnt mean that they knew the term and what CSR stands for but they became aware of that a cosmetics company can support environmental and social causes voluntarily. The reason enabled consumers to consider The Body Shop as a socially

and environmentally responsible brand, actually depends on the communication channels, which have been created between the company itself and the consumers.

The Body Shop uses most of the communications channels as a source of information for consumers, which have been mentioned above. The most important communication channel for The Body Shop is the store activities, which they run the social and environmental campaigns. Therefore, since it is a personal experience, the highest rate of awareness is being raised. This is the reason of why the interviewees gave The Body Shop as an example while answering question 9. Lastly, 2 consumers answered as I dont see it when they were asked how they find out that a cosmetics brand is socially responsible. The reason for this is that, these 2 interviewees were the youngest participants of this research. They didnt have much idea about CSR activities of the cosmetics companies as well as having troubles in remembering the brand names. So although they were aware about social issues, they werent able to match cosmetics company names with specific CSR activities.

5.5.1 CSR Perceptions towards Information Sources Question number 10 was aimed to learn how consumers find out that a cosmetics brand is socially responsible. Question number 11 aims to understand: -How consumers feel about being informed in terms of CSR activities of the cosmetics brands. Figure 16, in the next page, shows the reactions of consumers towards CSR information.

Number of Answers 10 12 10 8 6 4 2 0

Reactions Towards CSR Information


5 2 5 7 5 2 4 2

Reactions

Figure 16: Reaction Towards CSR Information In relation to Question 11: How do you feel about being informed about social responsibility aspects of companies?

The most given answer is that consumers are happy to be informed about CSR activities of the cosmetics brands. It is observed that they dont want to be pushed and want to receive the information within their own initiatives. One of the interviewees said that: I prefer reading the information that takes my attention or listen to it on TV whenever it is interesting to me. But I dont like to be stopped and informed when Im checking a store and during the time of shopping. But overall, I can say that I feel happy to be informed and having ideas about the cosmetics brands responsible activities. Moreover, another interviewee commented by saying: I am interested in being informed if Im really interested in the product and/or if Im considering buying the product. Otherwise, if Im just checking I dont want to spend my time being informed for a product that Im not interested in to buy. Based on the answers of the interviewees, the participants who said that they find being informed interesting they expressed themselves saying as I find it interesting but I dont hear it a lot and I find it interesting but I need to be informed more. Consumers are happy to be informed in the end, whether they are interested, feel bored or neutral. Their expectation is not to face aggressive attitude and to use their own initiative while being informed.

5.5.2 Consumers Value of CSR Within question 12, interviewees are expected to elaborate: -Whether they find it important that the cosmetics companies are socially responsible.

The answers gathered are listed below: -I find it very important. Maybe 100 years ago, there were few cosmetics brands and even being able to produce the cosmetics products was a differentiation strategy for a company. But lately because of the competitive aspect of the cosmetics industry, companies have to focus on new competitive ways. I believe that CSR is a beneficial competitive advantage for companies as well as for the consumers. -Cosmetics products are directly linked with our skin health, so being a responsible company in terms of the ingredients is a must for cosmetics brands. Moreover, I want to learn where the products come from since Im applying it on my skin. -I find it important. The more companies do it, the better the impact will be for the world.

On the other side, one interviewee stated that it is crucially important for a cosmetics company to be socially responsible, she also carries a doubt in order to fully trust the companies if they are keeping their promises and achieving the goals that they have aimed in terms of donations. Therefore, one of the interviewee expressed her ideas by saying: I appreciate it very much that, cosmetics products dont include harmful ingredients; carry the responsibility towards protecting peoples health, protecting animals or donating foundations. However, as a consumer I have question marks in my mind about whether promises are being held or not. Interviewees agreed on this subject within their answers that CSR related activities should be trustworthy. They want to be convinced that the cosmetics companies are actually being socially responsible.

Another perspective, which was observed through the interviews is that although people find the CSR activities important towards the environment and the society, they dont find it important while buying a product. Since the brand image is a reflector of the quality for the consumers, they dont question the ingredients. In the end, for this segment of the consumers, CSR activities are just interesting to hear and to observe but not a decisive factor while buying a cosmetics product.

5.5.3 CSR Related Cosmetics Consumptions The 13th question was asked in order to learn: -If consumers ever bought a socially responsible cosmetics product after being informed at the store.

The aim of asking this question is to learn more about the point-of-purchase communications. Point-of-purchase or POP advertising, also called in-store, point of sales or POS advertising, can be defined as any promotional material placed at the point of purchase, such as interior displays, printed material at shop counters or window displays. However, it also includes instore broadcasts, video screen demonstrations, shopping-trolley advertising, shelf talkers, coupon dispensers, wastepaper baskets and interactive kiosks (De Pelsmacker et al, 2007). Therefore, 8 people out of 25 interviewees gave the answer yes and 17 people gave the answer no for the question whether they have made a purchase after being informed at a cosmetics store. Moreover, as it has been mentioned before, point-of-sales communication was defined as receiving information at the store while talking to a sales person, paying attention to the store displays, receiving samples and information brochures by the interviewees. 8 out of 25 consumers stated that they were informed at the cosmetics shop and then made a purchase. Their arguments are: -I dont believe that the sales people at the cosmetics shops have the required information so I dont trust what I hear from them. This is the reason why I prefer informing myself at the store by reading the brochures and the store displays. The Body Shop is an example for me. -Yes, I remember that I bought a product of Sothys which is a French cosmetics brand. The sales person seemed very reliable and she informed me a lot about skincare rather than just mentioning about the product. Also, sometimes I buy the products after trying the samples that I received from the cosmetics shops.

Moreover, Sisley and Clinique were the other cosmetics brands that have been purchased after being informed at the store. On the other side, the arguments of the interviewees who answered as no are: -I dont think that the sales people are qualified enough to inform me and to provide required knowledge. Therefore I am not open to be persuaded by them.

-The conversations that I have had with the sales people were more about learning new product offers and about the duration of the products. -In general, I dont like to talk with the sales people as I always feel obligated to purchase therefore I am not aware if a product is socially responsible.

It can be said that there is a tendency of underestimating the sales people and not carrying trust towards them. Therefore, cosmetics companies may focus on trainings of their employees more in order to change the customers attitude towards this issue. In addition to this, cosmetics companies can focus more on attracting consumers through other point of purchase communications that may lead consumers to use their own initiatives without feeling obligated to talk to the sales person.

It is also observed that people approach more positive towards communicating to the sales person at The Body Shop stores compared to the other cosmetics brands. First reason is that The Body Shop products are being sold at their own The Body Shop stores. Therefore, consumers only have to focus on The Body Shop products. On the other side, since other brands are sold at a cosmetics store which consumers can find many brands; they feel themselves overwhelmed and bored because of receiving a lot of information for different brand names. Also, this decreases the motivation and the attention of the consumers. Moreover, one of the advantages for The Body Shop is that they provide specific store design at every point of sales all around the world. So, although the person is checking the store at another city or country, they feel themselves familiar to the brand and know what to expect from The Body Shop stores. POP communications are not only concerned with POP advertising. The store image, store design, the scent and the music in the store, the way the products are placed on the shelves and the packaging of the products form an integral part of POP communications. In short, POP communications involve all the aspects of the store and the store environment that can signal something to customers about the quality, price or product assortment, whether it is initiated by the retailer or by the manufacturer (De Pelsmacker et al, 2007). Increasingly, consumers decide which product or brand to buy while shopping. Since it is important to communicate with the consumer at the time and the place where they take a purchase decision, in-store communication techniques are increasingly important, and are

becoming increasingly sophisticated (De Pelsmacker et al, 2007). As it has been mentioned in the literature review, cosmetics products are experience goods which consumers cannot make personal decisions beforehand (without experiencing/trying the product) due to lack of information. Because of this reason, point of sales communication is especially more important for cosmetics industry compared to the other industries. Consumer attention can be attracted, brand name can be reminded, consumers can be informed and persuaded and lastly the image can be created at the store. Figure 17 explains the objectives mentioned above.

Pop communications

Attract attention

Remind

Inform

Persuade

Create Image

Figure 17: Point-of-purchase communication objectives (De Pelsmacker et al, 2007).

5.6 Loyalty Aspects of the Cosmetics Products


Question 14 was asked to understand: -Whether consumers are willing to change their cosmetics brands that they are loyal to after being influenced by CSR activities of other cosmetics brands. 17 interviewees answered as maybe, 6 interviewees answered as no while 2 interviewees answered as yes. Figure 18, gives an overview of the answers in relation to question 14.

Changing Loyal Brands


2 Yes No 17

Figure 18: Changing Loyal Cosmetics Brands In relation to question 14: What kind of CSR activities will lead you to change the cosmetics brand that you are loyal to?

The only two interviewees, who are willing to change their loyal brands, said that ecological awareness, support and research to cancer, poverty, and education related subjects are the CSR activities that they are very sensitive about. Therefore, they can change their loyal brands if they are informed and persuaded about these issues.

On the other side, the interviewees who directly rejected to change their loyal brands stated these arguments: -No, I dont think so. The first important factor for me is the quality of the product. So, since I am satisfied with the brands that I am loyal to, I wouldnt consider changing them. -The brands that I am using are already socially responsible so I dont feel the need to change them. Moreover, the majority of the interviewees gave the answer maybe while reasoning it with some circumstances. The most given condition under which consumers are willing to change their loyal brands, is that the socially responsible brand has to assure at least the same level of quality. Interviewees stated that they want to test the product with samples and compare it to the brands they are loyal to in order to be sure of the quality. Moreover, the word of mouth is an important decision factor for interviewees while switching their brands. The experiences of their friends, family members, and the shared knowledge through forums on the Internet were

also stated as important factors. Furthermore, when interviewees are asked within question 5 about their purchase decision factors, CSR was not mentioned as one of the reasons. Therefore, CSR activities are not stated as one of the main reasons to choose a cosmetics brand. It is more observed as an important factor while creating and supporting the brand image. This is the reason why, the majority of the interviewees answered as maybe and no for question 14.

Furthermore, within question 15 it is aimed to learn: -If the consumers are willing to pay a higher price for a socially responsible cosmetics product. Only two interviewees answered as yes and one interviewee said no and 22 interviewees answered as maybe while basing their arguments on some conditions. Figure 19 shows the responses of the interviewees.

Willingness to Pay Higher Price


2 Yes 1 No

22

Figure 19: Willingness to Pay Higher Price In relation to question 15: Are you willing to pay a higher price for a socially responsible cosmetics product?

The interviewees, who are willing to pay a higher price for a socially responsible product, would like to support some specific environmental and social acts. On the other side, the only interviewee who responded she wouldnt pay a higher price explained that she only buys cosmetic products just because she likes the products but not because of any socially responsible reason. In addition, the majority of the interviewees expressed their ideas by saying:

-I believe that implementing socially responsible activities would make a huge cost for the companies. Therefore it is normal to expect a higher price. Since my eyes are very sensitive, I would consider paying a higher price for eye make-up products because of my need of quality. -I might pay a higher price but it depends on how high the price increase is compared to the brands that I am already using. -If my purchase is going to donate to a current cause/problem such as people suffering from a flood, earthquake, hurricane, war, etc., I may pay higher amounts so that I can contribute to a social act.

5.6.1 Recommendation and Discouragement of Cosmetics Brands Moreover, it is aimed to learn: -Peoples attitude towards recommendation of socially responsible brands (question 16) and; -Discouragement of brands, which have negative image in terms of social responsibility (question 17).

As for question 16, the majority of the interviewees -22 people- stated that they would recommend the socially responsible brand names to their friends and families. Moreover, it is observed that consumers are more willing to advise and recommend to each other about the purchase decisions during the shopping time. Some of the interviewees mentioned that they have already recommended The Body Shop and Yves Rocher to their friends in terms of their socially responsible behaviours and products. On the other hand, 3 people mentioned that they would not make a recommendation in terms of the social responsibility aspects of a cosmetics brand. The interviewees stated that they dont have much knowledge in terms of CSR activities of cosmetics brands; therefore they would prefer not to make a recommendation. Figure 20 shows consumers willingness to recommend or discourage a cosmetics brand to other people.

Recommendation of CSRrelated Brands


3 y es n o

Discouragement of Irresponsible Brands


3 yes no

22

22

Figure 20: Recommendation of CSR-related Brands / Discouragement of Irresponsible Brands In relation to question 16 and 17: Would you recommend a cosmetics brand to someone else because of its CSR activities? / Would you advise someone else not to buy a cosmetics brand because of its negative image in terms of social responsibility?

Question 17, was asked to learn if consumers would advise someone else not to buy a cosmetics brand because of its negative image in terms of social responsibility. Surprisingly, the evaluations of consumers about recommendation and discouragement of a brand was equal when it is asked about their behaviour. 22 people stated that they would reflect their discouragement about the brand to their friends and 3 people said that they wouldnt reflect their discouragement. This is surprising because, as mentioned in the literature review, there is a tendency of thinking that negative reinforcement is shared more often than positive brand experiences. For long it has been assumed, both by managers and academics, that negative as compared with equally extreme positive information receives a higher weight in the formation of judgements because negative information would be perceived as more useful or diagnostic for classifying brands into evaluative categories. However, the negative effect may be overstated. Even if consumers are motivated to process marketing communications, the same information may lead to a completely different processing and communication result depending on the type of consumer motivation or processing goal (De Pelsmacker et al, 2007). As it has been mentioned in the literature review, how consumers process information can depend on their involvement with a product or a brand. If a consumer has a strong commitment to a brand, she is able to show more resistance to negative information and might have difficulty remembering ethical attributes of a product.

5.6.2 Loyalty and CSR The psychological commitment or relation between a consumer and a brand can be defined as brand loyalty (De Pelsmacker et al, 2007). In addition, repeated purchase shouldnt be confused with brand loyalty since continuous buying decisions are mostly given because of several factors such as availability of limited choices or being the least expensive option which have no links regarding emotional involvement to the brand. On the other side, loyal customers are more likely to pay attention to, understand, agree with, and respond positively to messages of advertising for the brand to which they are loyal to (Tellis, 2004). Therefore, since CSR activities directly focus on and influence consumers emotions, it can be assumed as a way of creating emotional links with the brand. By doing so, it helps to retain loyal customers. Based on the answers of the interviewees, it is observed that consumers feel themselves better and different from other customers regarding their socially responsible cosmetics consumption. In other words, CSR strengthens the link between the consumers and the brand by making them feel different from others and making them feel part of a socially responsible group of the society. As a result of this, brands can offer more than just the product itself. They can offer an experience, which is the core of creating emotional links with the consumers. Moreover by establishing social communities, cosmetics brands can achieve improved customer involvement and brand loyalty. Those consumers who become a part of a socially responsible community of a cosmetics brand will increase word-of-mouth which leads to attracting new consumers. De Pelsmacker (2007) supports this idea by saying: Evidently, a strong brand implies that as many customers as possible are satisfied, committed buyers. Not only will committed buyers repurchase the brand; they will also actively promote your brand to others and function as real ambassadors.

Moreover, cosmetics brands -through their CSR activities- can reflect themselves to the responsible cosmetics consumers that they share the same values. Therefore, the socially responsible image of the specific cosmetics company can be stated as a value that consumers would feel proud of sharing and reflecting to the people around them. By doing so, consumers can identify themselves with the brand and can use it as a status symbol -as being a responsible person- within their social network. This may be another reason of how CSR can be used as a factor of creating or retaining loyalty.

And lastly, CSR related product development activities may influence consumers in order to stay as loyal customers or become loyal customers. For instance, when interviewees are asked about their purchase decision factors, 17 consumers out of 25 gave quality as an answer. Therefore offering fragrance free, non-allergic products that do not include unhealthy chemical additives can be considered as product quality related CSR activities. In other words, many consumers base their product loyalty decisions on CSR related quality improvements of the cosmetics products.

5.7 Branding and Cosmetics Products


Branding provides many advantages for a company. Strong brands help the consumer to locate and identify products and evaluate their quality. It makes it easier for the consumer to develop attitudes and expectations. A brand name serves as a shorthand label for a large bundle of associations and the whole brand personality. Branding makes shopping more efficient in that, it reduces the amount of decision-making time required and the perceived risk of purchase, as a result of the fact that a brand promises a constant level of quality. It gives consumers the ability to assess quickly the value and quality of new products by association with a well-known brand name. Finally, branding increases the innovation potential of manufacturers, thus leading to more variety and consumer choice. (De Pelsmacker et al, 2007). CSR activities can be used as a way of building and enhancing the brand image for the cosmetics brands. Therefore, within CSR campaigns consumers associate socially responsible activities with the brand name. With the help of repetition of CSR related activities, consumer awareness can be achieved since creating brand awareness is essential in the cosmetics industry where consumer involvement is very high. For valuable quality products and brands such as cosmetics, design products, shoes, accessories, etc., aesthetic reasons and quality are the main reasons of purchase because they symbolise the consumers lifestyle. Therefore, the cosmetics brands should focus on creating and supporting brand awareness (De Pelsmacker et al, 2007).

Brand awareness can be defined as creating associations with physical characteristics of a brand such as the brand name, logo, package and style. Moreover, brand awareness can be achieved in two ways, which are brand recall and brand recognition. Brand recall is harder to achieve than the brand recognition. Less repetition and smaller investments are needed to establish for brand recognition than the brand recall. As it has been mentioned before, point-

of-purchase decisions are important for cosmetics products especially for CSR related purchase decisions. This is because the consumers at the point of purchase can easily recognize CSR activities. Therefore packaging, displays, colours, logos and all the visual aspects of the products are important to create brand recognition.

On the other side, in terms of CSR awareness both brand recognition and brand recall are important. During the interviews, consumers mentioned that they prefer searching for the cosmetics brands and becoming informed through the websites and the forums besides just becoming informed at the cosmetics stores. This is how brand recall can be created and strengthened through CSR related activities. Sometimes this dual brand awareness objective is required, since for many product categories consumers limit their search activity based on loyalty to a limited set of brands (De Pelsmacker et al, 2007).

Repetition is also an important aspect for brand recall, which increases the strength and speed of learning. The more consumers are exposed to information, the more likely they learn it. The effect of the repetition is highly related to the importance of the information and the reinforcement given. If the subject of the matter is very important and there is a great deal of relevant reinforcement, less repetition of an advertising message is needed for consumers to learn the message (Hawkins et al, 1992). On the other hand, although CSR is an important subject, the concept is new for consumers. Therefore, high repetition is needed to make consumers more aware and to set CSR as a standard in order to make it as a purchase decision factor. Moreover, repetition is not only necessary to make consumers aware of CSR but also important in order to link CSR activities with cosmetics brand names, in other words, to achieve brand recall.

When consumers are loyal to some cosmetics brands, the only way to make the consumers to change their loyal brands is to achieve brand recognition as well as brand recall. Making consumers informed about CSR activities help to create emotional links between the consumers and the brand. Therefore, CSR related activities can support brand recall and become a part of the brand image in the long run while supporting the environment and the society. Every communication activity should take brand awareness into account. Even if brand attitude or other objectives are more dominant, it will still be important to support brand awareness. A brand can never have too much brand awareness. The effect of brand awareness

on brand choice and brand purchases is substantial. If two brands are equally valued, the brand with the highest awareness will be purchased more often (De Pelsmacker et al, 2007). This point is related to the answers of question 14. Within question 14, the interviewees mentioned many reasons under which situations they are willing to change the cosmetic brands that they are loyal to. Interviewees expressed that only assuring the same quality and the similar price range can be considered as reasons to switch their loyal brands. Therefore, if a cosmetics company is valued in the same category in terms of quality and the price range, the brand which has the highest brand awareness will be the one chosen. Besides protecting the environment and the society, which is the prior mission for implementing CSR activities, brand awareness can be increased through CSR as well. To sum up; a win-win-win situation can be achieved: - While increasing brand awareness and benefiting from increased purchases in terms of the companies, - While becoming more aware about the environmental and social issues therefore carrying the need to be a part of the act in terms of the consumers - And lastly increasing the well being of the environment and the society.

5.8 Conclusion
Within the consumer analysis, it is aimed to come up with answers towards the research question: How do consumers interpret CSR in the cosmetics industry? In order to answer this question, three sub questions are formulated to understand whether CSR is an important purchase decision factor for cosmetics consumers, how influential the CSR activities are in order to create brand awareness and how influential the routes of persuasion are to raise CSR awareness for the cosmetics brands.

1. Is CSR an important purchase decision factor for cosmetics consumers? Although consumers state that they find it important for cosmetics brands to be socially responsible, they did not directly mention CSR as a purchase factor. The most important purchase factors for consumers are the quality of the product, the price, the ingredients and the duration. On the other hand, it can be said that the factor ingredients can be considered as a CSR factor as well. Consumers define ingredients as fragrance free, as being not allergic and not containing unhealthy chemical additives. These aspects are all part of environmental

and healthy CSR activities. For example, Cliniques main CSR activities consist of providing fragrance free and on allergy-tested products. In addition, ingredients are very much linked to the quality. By making the products fragrance free and without chemical additives, the quality of the products increases as well in the mind of the consumers. Therefore, it can be said that even though consumers do not consider CSR as a direct purchase factor, they actually do value it and use it as complementary source in order to make their purchase decisions.

2. How influential are the CSR activities in order to create brand awareness? Even though CSR is a not a purchase decision factor for cosmetics consumers, it does have a significant influence on creating/supporting the brand image, which indirectly influences consumers purchase decisions. Moreover, strengthen brand awareness is closely associated with the emotional links created between consumers and cosmetics brands. Therefore, CSR activities of cosmetics companies, which highlight social and environmental problems/causes, can be used as way to creating/enhancing emotional links with consumers.

Moreover, consumer interviews showed how a cosmetics company can create and increase brand awareness through integrating CSR activities to its core business strategies. Therefore, The Body Shop is stated as the cosmetics brand that carries the highest consumer awareness in terms of CSR based on the answers of the consumer interviews. The consumer awareness of the Body Shop, which is achieved through the CSR activities, can be shown as an answer to this sub question. In the relation to the first sub question, creating brand awareness through CSR leads consumers to consider CSR as an indirect purchase decision factor.

3. How influential is the peripheral route of persuasion to raise CSR awareness for the cosmetics brands? As it has been mentioned before, creating emotional links with consumers is significantly important for cosmetics brands. Consumers give purchase decisions in order to feel themselves happy, different and privileged. In relation to this, through consumer interviews it is observed that CSR-focused consumption make them feel good citizens who differentiate themselves through their socially responsible contributions. In the end, they feel themselves as a part of a privileged group of the society in terms of their responsible consumption. Therefore, the peripheral route of persuasion is a way to touch on those feelings while persuading consumers. In relation to this, the peripheral route achieves this objective by using

different cues (stressing emotions) through advertisements instead of leading consumer to cognitive information processes. During the consumer interviews, it is observed that consumers are open to being informed about CSR activities of cosmetics brands. Moreover, consumers want to use their own initiatives while being informed. Therefore, the peripheral route is significantly important in order create brand awareness without putting too much pressure on consumers. In order words, to attract consumer interest through emotional links is the expected way of being persuaded by consumers, which can only achieved through the peripheral route of persuasion in terms of CSR.

To sum up, based on the conclusions of the sub questions, the research question can be answered by saying that consumers interpret CSR for the cosmetics brands not as a direct purchase decision factor for them. Furthermore, consumers consider CSR activities as an influential source to create their brand awareness while coming up with the purchase decisions. Moreover, based on consumers need in terms of creating emotional links with cosmetics brands, the peripheral route of persuasion is decided as the right way to communicate with the consumers.

6. Conclusion
The previous sections focused on the results of the company interview and the consumer interview. Based on these results, answers were given on the two research questions. These research questions were formulated to support of the central question, which is How do Corporate Social Responsibility activities affect consumers buying behaviour in the cosmetics industry? In this chapter the answer to the central question is presented. In addition, the limitations of the research and the ideas for further research are discussed as well.

6.1 Overall Conclusion


Based on the key findings of the consumer and company analyses, it can be stated that CSR activities of the cosmetics brands do affect consumers buying behaviour. There are several ways in which these activities have an impact on consumers purchase behaviour.

The most important purchase factors of the cosmetics consumers are the quality, the price, the ingredients and the duration of the cosmetics products. The consumers did not mention CSR as one of their purchase factors. However, it can be stated that even though they not directly consider CSR as purchase factor, it does have a significant influence on their buying decisions. The factors ingredients and quality are closely related with the CSR activities of cosmetics companies (such as the use of biological/natural ingredients).

In addition to the purchase factors that are mentioned above, consumers choose certain cosmetics brands based on the emotional links that they have towards these brands. These emotional links can be further enhanced with the CSR activities of the cosmetics brands. The cosmetics brands can use the peripheral route of persuasion to make consumers aware of their CSR activities, in other words to create CSR awareness. By using peripheral cues in the advertisements (for example the image of the endorsers, music and other affective elements), consumers are able to create emotional links with the CSR activities. This will lead to emotional links with the brands as well. As result, both CSR awareness and brand awareness are created.

Moreover, it is observed that consumers had difficulty in understanding the meaning and the value of CSR. Based on this, the activities of the cosmetic companies help consumers educate about the value of CSR. As a result, consumers become more involved in the CSR activities and they feel satisfied in buying social responsible cosmetics products since they are able to contribute to the society and the environment. They can consider themselves as good citizens. In this way, emotional links with the cosmetics brands are created as well.

Furthermore, consumers are informed about CSR activities (and lack of CSR activities) within the cosmetics industry through mass media and NGOs. These information channels help consumers to understand about the necessity of being socially responsible. After being informed and becoming aware of CSR activities, the consumers demand increases. Therefore, even though consumers do not directly consider CSR as a purchase decision factor, it can be stated that consumers want to see more social responsible acts from the cosmetics brands. They recommend socially responsible brands to their friends and families and discourage irresponsible brands. As a result, CSR can be considered an indirect purchase decision factor.

On the other hand, it is necessary for cosmetics brands to continuously communicate their CSR activities to their consumers. Before purchasing a socially responsible brand, consumers want to be persuaded that the CSR activities are not just a marketing tool. For this reason, it is important that cosmetics brands are showing their CSR commitment on a long-term basis.

6.2 Limitations
There are several limitations with regards to this thesis. A significant limitation was collecting more consumer behaviour data through more interviews. There were some difficulties finding participants for the consumer interviews. This is due to the fact that in-dept interviews take longer time to conduct than quantitative surveys. The cosmetics consumers that participated in the interviews have chosen to do so, because they were able to make time for it in a short-term period. However, it became painfully clear that many consumers did want to take part of the interview because they did want to make time for it. After being told about the estimated time (maximum of 30 minutes) to conduct the interview, they were not interested enough to participate and were not willing to schedule an appointment. For this reason, no more than 25 interviews were conducted. On the other hand, it must be said that 25 consumer interviews

were enough to collect sufficient and valuable data in order to conduct the research in terms of consumers purchase behaviour.

In addition, the number of questions was limited to thirteen main questions regarding CSR. Since each of those questions required an elaborated answer from the interviewees, it was not possible to ask more questions. Asking more than thirteen questions prolonged the duration of the interview, which was not attractive for finding interviewees. This means that more questions, in relation to CSR and consumer behaviour, were not asked.

Furthermore, it had to be said that some of the answers of the interviewees were not valid or not taken into consideration, since they were not willing to elaborate on their answers. Without any explanation to some questions (e.g. Q10: Do you find CSR important? Please elaborate), it is hard to analyse consumers perceptions on CSR and how it affects their buying behaviour.

Also due to the location of the researchers, the interviews were conducted in Brussels. Since, in-depth interviews require that the researchers personally meet with the interviewees; it was hard to conduct interviews outside of Brussels because of the time restrictions. In addition, because of the difficulty in finding participants who were willing to participate for the consumer interviews, several of the interviewees were found through the networks of the researchers. For this reasons, a large group of the cosmetics consumers are students.

Moreover, it was not possible to receive CSR statistics from cosmetic brands (sales results/figures) in order to measure the actual impact of CSR on consumer companies. The cosmetics brands were not willing to share that information due to the sensitivity of the documents. Therefore, the analyses of this paper primarily focused on the data collected through the consumer interviews and the company interview in order to answer the research questions.

6.3 Further Research


As mentioned before, this paper aims to understand how CSR activities of cosmetics brands affect consumer purchase behaviour. The majority of the participants of the consumer interviews are in the age range of 18 to 25 years old and primarily students. Even though

cosmetics products are aimed to reach consumers within a broad age range, it can be interesting to conduct a consumer behaviour research focusing on working cosmetics consumers, in order words focusing on employees (for example, employees within the age range of 30 to 50 years old). This group of cosmetics consumers have a higher income than students. In addition, it is observed from the consumer interviews that employees often purchase prestige cosmetics brands, such Estee Lauder, Dior and Chanel, than mass-market cosmetics brands. It can be assumed that they buy the prestige brands not only because of the quality of the products, but also because of the emotional links they have towards the brands. Furthermore, the interviews showed that consumers between 26 and 40 years old have heard about social responsibility with the cosmetics industry for a longer period of time compared with younger consumers and they were able to give more examples of CSR activities within the cosmetics industry. Therefore, further research can be done on: how CSR affect consumers buying behaviour, how cosmetics brands can use CSR to create emotional links with these consumers and support the brand image, and how these consumers can be persuaded through CSR to change their loyal brands.

Also, further research can be done on how to measure CSR impact in the cosmetics industry based on CSR statistics from cosmetics companies. By analysing the CSR statistics, the affect of CSR on consumer purchases can be measured in order to understand how significant CSR activities are for the sales of cosmetics products. An example of statistics can be the sales results of cosmetics products after conducting a CSR campaign.

Furthermore, another interesting topic to further analyse is the industry initiatives in terms of CSR. As mentioned by Isabel Martin, cosmetics companies have their own CSR activities and use these CSR activities as way of creating differentiation and competitive advantage. However, by bundling CSR efforts and creating industry CSR initiatives, the impact will be greater on the environment and the society. In addition, during the consumer interviews it is observed that consumers wanted to be persuaded by cosmetics brands that they are fully committed to CSR in order to support the environmental and society and, not just use CSR as green washing. Therefore, the possibilities of CSR industry initiatives might increase the overall credibility of the cosmetics industry in terms of CSR. This will lead to higher credibility of the CSR initiatives of the individual cosmetics brands as well.

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http://www.thebodyshop.com./_en/_ww/index.aspx

Personal Interview Interview with Isabel Martin, Estee Lauder Companies, Woluwe Office Garden
Woluwedal 26 box 8 B. -1932 Sint-Stewens-Woluwe, Monday, 5 July, 2010.

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