Relationship between the consumer attitude toward the Corporate Public Advertisement and the Corporate Image

Transcription

1 Relationship between the consumer attitude toward the Corporate Public Advertisement and the Corporate Image ABSTRACT After the 1997 Asian Financial Crisis, short-termism was heavily criticized, shifting the social value from the profit to people. The majority of profit-maximizing firms in South Korea acknowledge the external costs arising from the production of goods or services. Societies now have the perception that the firms should benefit stakeholders such as consumer, investors, labor and local community, and be a necessary organization for the society (Dong Hyun Yang, 2008). Firms attempt to engage with problems such as environmental sustainability, and public welfare systems in order to reform the their image, transforming the negative consumer attitude of them. (Hua Zhang, 2010) In that sense CPA, also known as Corporate Public Advertisements, can be the best tactic to shape consumer attitude. Indeed, the humanizing effect of a well-produced advertisement, projecting a firm s community engagement and positive ethos, can prove an effective aide to transforming the perception of a corporation by the consumer into something more ethical and upstanding, thereby perhaps ensuring consumer loyalty. Now the image of the firm is one of the key factors that determine consumer behavior. Simple product advertisements tend to benefit firms in the short term, where the purpose is to highlight the product in order to sell more. Public advertisements are arguably more about long-term gain; by advertising a firm s social responsibility they may refine the corporate image, and can also gain credibility. (Han Su Kim, 2013) The main purpose behind the CPA is to change consumer behavior in the long run. Fishbein s Multi- Attribute Model (Fishbein, 1963) may represent the process of transformation of consumer attitude and explain the relationship between consumer attitude and the corporate image. In order to use the model, the primary data will be collected via survey toward different demographics that will answer how they think about the specific firm after watching the CPA provided by that firm. The survey s reliability will also be checked by using Cronbach s a. The survey will be used to analyze the association between the consumer attitude and corporate image, allowing to verify the effectiveness of public advertisement. The statistical analysis showed 3 different conclusions. Firstly, most of the consumers who were exposed to the CPA recognized and remembered the content of the CPA. Secondly, there was a positive association between the corporate image and the CPA. And lastly, consumers with positive consumer attitude or has a salient belief on the people centered management showed a better consumer cognition on the corporate image. It is crucial for a firm to be cognizant of the relationship between the advertisement and consumer behavior as they may provide a more effective and persuasive advertisement. Acknowledging such relationship, the aim of this paper is to address the concomitant relationship between a consumer attitude and its effect on the corporate image. This paper aims to act as a steppingstone for wider investigations into successful consumer-marketing tactics dealing with the CPA. 1

2 CONTENT I. Introduction II. Literature Review 2.1 People Centered Management and Corporate Public Advertisement Definition of Corporate Public Advertisement Definition of the Corporate Image Determinants of Corporate Image Relationship between the Corporate Image and Corporate Public Advertisement 2.2 Consumer Attitude Consumer cognition and behavior Fishbein s Multi-Attribute Model III. Method 3.1 Research Model 3.2 Hypothesis 3.3 Research Tool Consumer attitude in relation of people centered management Corporate Image Personal background and CPA experience 3.4 Data collection and analysis procedure IV. Data Analysis 4.1 Demographic characteristics of advertisement objects 4.2 Reliability of the Research Tool: Cro 4.3 Pearson s Correlation Test 4.4 Consumer Behavior and Corporate Image V. Conclusion VI. Evaluation References 2

3 I. Introduction One of the main rationale behind the firm's advertisement is the belief that consumers who were exposed to the advertisement may form a positive behavior toward the firm and its product, increasing the sales of the firm. It is widely acknowledged and researched that the consumer exposure on the advertisement can lead to a formation or transformation of the consumer attitude. Consumer attitude means a particular reaction of the consumer toward the advertisement, which can be either positive or negative. Consumer attitude toward a certain issues can affect how consumers recognize the advertisement. For example, consumers can have a positive attitude and belief toward saftiness of Hyundai s car. If Hyundai Motor shows an advertisement that emphasizes the saftiness of the car toward that consumer, the consumers will recognize such advertisement better. With the case of CPA, which refers to Corporate Public Advertisement, the original consumer attitude toward social issues will immensely affect the behaviour of the consumers who were exposed to such Public Advertisement. However Colley (1979) recognized that more effective the advertisement is, it may lead to a transformation or even a formation of positive consumer attitude and hence leading to a more positive corporate image. Hence, firms should aim for an advertisement which can form a positive consumer attitude and need to understand how consumer attitude can be formed after the exposure of advertisements. Corporate image can be determined by the attributes of the brand and it can also be determined by the consumer attitude toward the advertisement. The importance of the consumer attitude should be emphasized as there there exists a strong relationship between the corporate image and the consumer attitude. It is crucial to understand the consumer attitude in more depth, and it is even more crucial to understand the consumer attitude toward the people centered management: as the corporate image of firms with people centered management can be linked to various social issues, where the civilian s interest on the social surplus is increasing year by year. II. Literature Reviews 2.1 People Centered Management and Corporate Public Advertisement Definition of Corporate Public Advertisement CPA is a form of communication toward societies, dealing about public and social issue, rather in the perspective of maximizing the social surplus and utility than the perspective of profit maximization. (Darian, 1993) Simply CPA is one type of communication to show the firm s engagement with social responsibility toward the public. Usually, it is an advertisement that delivers the message toward the public that the firm share their profit with the society in order to maximize the social surplus by actively engaging with certain social issues. While CPA may purely break the perception that firms prioritize profit maximization, the main rationale behind the CPA is to form the positive corporate image: differentiating themselves from other firms hence it is one type of corporate advertisement. (Kyung Hee Kim, 2002) While firms stand as an individual system in the society, there should exist a bilateral interaction between firms and the society as it is also one of the social substructure that needs to engage with social responsibility. (Jae-Young Choi, 2001) Large TNCs in Korea (also known as Chaebol, a family owned companies) recognize the importance of them showing the engagement with social issues -- recognize that they need to improve their corporate image -- and use CPA to transform consumer attitude hence corporate image, rather than them actually engaging with the social issues. 3

4 2.1.2 Definition and role of the Corporate Image The importance of the corporate image is widely recognized between firms as better the corporate image, consumers showed more positive consumption activities. (Young-suk Park, 1987) Despite the fact that the corporate image is important, there are many different definitions for the corporate image. In the study conducted by Jun-il Lee(2007), the corporate image was defined as total combinations of believes, information, and experiences of the stakeholders toward a certain firm. Indeed, a positive corporate image can be the external appearance of the firm which can increase the number of potential buyers by affecting the consumer behavior. Previous researches believed that the corporate image is a unique identity of a firm: a general appearance of one firm from many perspectives. The corporate image can be either positive and negative, and the determining factor is rather consumers than a firm. Consumers believe that the most determining factor when they assess firm is a corporate image, yet in the research paper conducted by Hua-Zhang (2009), the most determining factor of the corporate image is the product attribution. However, such technological advances and innovation allowed an almost indistinguishable quality for many products. Hence it is appropriate to mention that the corporate image, the second most determining factor of the corporate image, is quite crucial in modern days Determinants of Corporate Image Recognizing the importance of the corporate image, there was a need for specific details of the determinants, in order to improve the corporate image. As previously mentioned, the definition of corporate image may differ with different scholars, hence there is no fixed determinants. However, there are common determinants in various researches including ones that were conducted by Won-Su Kim(1993) and Schwartz(1995). The concept of the corporate image, originated from the gestalt psychology, is formed by both consumers and potential consumers through advertisements and product appraisal which are collected through various types of marketing communication. As this research is aiming to discuss how CPA is recognized and forms a certain consumer attitude, this research would like to focus on the advertisement out of various determinants Relationship between the Corporate Image and Corporate Public Advertisement The CPA is one of the most commonly practiced advertisement from the firm to actively establish the corporate image, as CPA is one of the most effective tool to show the public how they are engaging with the social responsibility. Hence, if the firm is intending to transform or form a certain consumer attitude toward the corporate image, the CPA may be the best form of advertisement to deliver such message. Simple product advertisements tend to benefit firms in the short term, where the purpose is to highlight the product in order to sell more. Yet public advertisements are arguably more about long-term gain; by advertising a firm s social responsibility they may refine the corporate image, and can also gain credibility. (Han Su Kim, 2013) The CPA can be a crucial communication tool where firms may be able to deliver the concept of public interest and form a better corporate image. (Jae- Young Choi, 2001) Lynn (1973), discussed and analyzed about the source effect, messege effect and consumer effect of the public advertisement made by the Advertisement Council of America. The conclusion was that the consumer attitude was determined by the educational level and age, where younger generations remembered the public advertisement better and had more positive attitude toward the corporate image. On the other hand Andreasen (1993) studied the message connoted in the CPA, where he hypothesized that the more effective advertisement required to deliver a specific message about the social cost and benefit, which leads to a better learning from consumers, hence better message. Although there is an increasing number of CPA by firms as a communication tool with the public, most firms did not conducted studies that deals with advertisement objects and subjects. Without any proper information or rationale, CPA tends to deal with the most common social issues. This research paper acknowledges that there are no sufficient numbers of research discussing about the effects of the CPA, 4

5 and even researches that discussed about the CPA have a limitation when it tries to explain the specific effect of the CPA. Hence, this paper would like to analyze the CPA more specifically: how consumer cognition of the CPA forms a certain consumer attitude, and how this consumer attitude forms a certain corporate image. 2.2 Consumer attitude Consumer cognition and behavior Consumer attitude is formed by the external information, experience or reasoning. Yet the attitude is formed based on the salient beliefs out of many different formed by these external factors. (Jin-A Hong, 2010) Multi-Attribute Model was widely recognized as a model providing an essential information for the marketing decision of the firm. For example, if the general view toward the certain brand or corporation was asked, it is unable to recognize why consumers perceive that brand or corporation. However if the Multi-Attribute Model is used, not only recognizing the salient belief that affected the consumer attitude, a firm may be able to come up with tactics that may transform the consumer attitude. As the aim of this research is to discuss the relationship between the consumer attitude and the corporate image, this paper would like to discuss the formation of the consumer attitude with the Multi-Attribute Model. There were many Multi-Attribute Model suggested to explain the formation of the consumer attitude, however this paper would like to use the Fishbein s Multi- Attribute Model, which is most commonly practiced model by firms Fishbein s Multi-Attribute Model Fishbein (1963) suggested an attribute model which shows that the consumer attitude is determined by salient beliefs and the attributes evaluation. Beliefs in his research means a subjective opinion toward the attribution of a product or a corporation. The model suggests that the attitude may be formed by the exposure of advertisement, and more frequent the exposure of CPA meant a confidence in their attitude. The model also shows a high association between the consumer attitude in relation to people centered management and the CPA. Although the consumer behavior may not change according to the model, the effect of the CPA toward the consumer attitude and the formation of the corporate image is significant. 5

6 III. Method 3.1 Research Model Based on the previous researches, the research model can be suggested as Figure 1 below. Figure 1. Model showing an association between the Consumer Attitude and the Corporate Image 3.2 Hypothesis H1. More positive consumer attitude in relation of people centered management, better the corporate image. Figure 1 can represent a part of the Fishbein s Multi-Attribute Model. As this paper acknowledges problems mentioned previously in 2.1.4, there is a need to discuss the association between the consumer attitude and the corporate image. Also, as we recognize the importance of corporate image, showing an association between the consumer attitude and the corporate image will be meaningful. As this research is specifically focusing in the CPA and its effect, consumer attitude toward the social issues will be regarded. Highlighting the fact again, the reason why we narrowed the advertisement to CPA and consumer attitude to the attitude in relation to the people centered management is because the CPA produced by Korean TNCs are dealing with issues regarding the people centered management, and the people centered management can be linked to various social issues such as labour rights, working conditions, and social surplus. 3.3 Research Tool Consumer attitude in relation of people centered management. Survey used in the research conducted by Hwa-Chang (2010), which contains 6 questions with 1-5 likert scale each will be used. Higher the scale point means more positive consumer attitude. Questions include: I like the advertisement, The advertisement is trustworthy, The advertisement was appealing, The advertisement was sincere, The advertisement was memorable, and The information delivered by the advertisement was helpful. 6

7 3.3.2 Corporate Image Survey used in the research paper conducted by Il-Gwon Sohn (2003), which contains 6 questions with 1-5 likert scale will be used. Higher the scale point means better the corporate image. Questions include: The firm shows a responsibility, The firm has cordiality, The firm seems to be ethical and wholesome firm, The firm is trustworthy, The firm is actively engaging with the social responsibility, and The firm is trying to maximize the social surplus Personal background and CPA experience The personal background was categorized by 4 different categories (Age, Gender, Educational level and Job), and in order to explain the cognitive learning of the CPA, 1 question about the CPA experience (numbers of CPA exposure) was included with 5 different sub-questions which is: I vaguely remember (recognize) this advertisement, I remember (recognize) this advertisement to a certain extent, I fairly remember (recognize) this advertisement, I considerably remember (recognize) this advertisement, and I clearly remember (recognize) this advertisement. 3.4 Data collection and analysis procedure Based on the research tool, the survey was prepared and was distributed toward people over 16 following the random sampling procedure. The data collected was then organized in the Excel, and then was empirically analyzed with SPSS The statistical analysis procedure was as follow; 1. Frequency Analysis of demographical characteristics toward the research targets 2. To check the reliability of research tool (survey), Cronbach s alpha value was used 3. To prove the hypothesis, correlation test and regression analysis were used. 7

8 IV. Data Analysis 4.1 Demographical characteristics of targets: Frequency Analysis The survey was done mainly by students who were over 15, living in Jeju Global Education City. There was a total of 200 respondents, yet respondents who missed out many questions were excluded. 175 data collected was analyzed to empirically prove the hypothesis. The result of the frequency analysis is as Table 1. Demographical Characteristics Frequency (%) Gender Male 88 (50.6%) Female 87 (49.4%) (18.6%) (37.4%) Age (32.3%) (9.4%) 19 4 (2.3%) CPA experience (Number of CPA exposure) I vaguely remember (recognize) this advertisement I remember (recognize) this advertisement to a certain extent I fairly remember (recognize) this advertisement I considerably remember (recognize) this advertisement I clearly remember (recognize) this advertisement 58 (33.4%) 34 (19.4%) 30 (16.9%) 14 (8.3%) 39 (22%) Total 175 (100%) Table 1. Frequency Analysis of Demographical Characteristics Out of 175 respondents, there was 88 males (50.6%) and 87 females (49.4%). Age group with the highest respondent number was 16 years old (37.4%), and then were 17 years old (32.3%), 15 years old (18.6%), 18 years old (9.4%), and 19 years old(2.3%), in that order. With the question about the CPA experience (number of CPA exposure) the number of respondents who answered I vaguely remember 8

9 (recognize) this advertisement was 58(33.4%), I remember (recognize) this advertisement to a certain extent was 39 (22%), I fairly remember (recognize) this advertisement 34(19.4%), I considerably remember (recognize) this advertisement 30(16.9%), and I clearly remember (recognize) this advertisement was 14(8.3%). 4.2 Reliability of the Research Tool: Cronbach s Alpha In order to assess the validity and reliability of the lists in the survey, reliability between the multi-item scale was analyzed by using Cronbach s Alpha value. There are reexamination method, multiple form method, split-half method, Internal consistency method(cronbach s Alpha) to check the measurement reliability. However this research used Cronbach s alpha as the multiple questions and scales were dealing with one concept, allowing to find out the scale that decreases the level of reliability, which exclusion of that scale can increase the level of reliability. Usually the critical value of Cronbach s alpha is 0.6. If the value is above 0.6, we acknowledge that the survey is quite reliable. Under such criteria, the Cronbach s Alpha value was analyzed as the Table 2 below. Measuring Tool Consumer Attitude in relation of people centered management Cronbach s Alpha Corporate Image Table 2. Cronbach s Alpha value for the consumer attitude and the corporate image The analysis showed that the alpha value for 6 questions regarding the consumer attitude was and the alpha value for 6 questions regarding the corporate image was Both of the questions were above the critical value of 0.6, which we may conclude that the survey was reliable. 9

10 4.3 Correlation Test: Pearson s Correlation Coefficient R In order to look at the association (correlation) between the consumer attitude and the corporate image, pearson s correlation coefficient test was used. The analysis came out as Table 3 below. *p <0.5, **p<0.1 (The significant probability value of the numbers in the table) Table 3. Correlation Coefficient test for the Consumer Attitude and the Consumer Image The question included in the Consumer Attitude in relation to the people centered management, I like the advertisement showed a positive (+) correlation with the questions included in the Corporate Image section by showing a correlation value of: The firm shows a responsibility (r=0.170**), The firm has cordiality (r=0.413**), The firm seems to be ethical and wholesome firm (r=0.487**), The firm is trustworthy (r=0.339**), The firm is actively engaging with the social responsibility (r=0.260**), and The firm is trying to maximize the social surplus (r=0.296**). With the case of the question The advertisement is trustworthy, it also showed a positive (+) correlation between the questions in the Corporate Image section which were: The firm shows a responsibility (r=0.239**), The firm has cordiality (r=0.276**), The firm seems to be ethical and wholesome firm (r=0.522**), The firm is trustworthy (r=0.474**), The firm is actively engaging with the social responsibility (r=0.404**), and The firm is trying to maximize the social surplus (r=518**). With the case of the question The advertisement was appealing, it again showed a positive (+) correlation with questions in the Corporate Image section which were: The firm has cordiality (r=0.158**), The firm seems to be ethical and wholesome firm (r=0.179**), The firm is trustworthy (r=0.140**), The firm is actively engaging with the social responsibility (r=0.128*), and The firm is trying to maximize the social surplus (r=0.148**). 10

11 The advertisement was sincere showed a positive (+) correlation with the Corporate Image which were: The firm shows a responsibility (r=0.202**), The firm has cordiality (r=0.477**), The firm seems to be ethical and wholesome firm (r=0.520**), The firm is trustworthy (r=0.294**), The firm is actively engaging with the social responsibility (r=0.255**), and The firm is trying to maximize the social surplus (r=0.275**). Positive (+) Correlation. The advertisement was memorable showed a positive (+) correlation with the Corporate Image which were: The firm shows a responsibility (r=0.111*), The firm has cordiality (r=0.425**), The firm seems to be ethical and wholesome firm (r=0.406**), The firm is trustworthy (r=0.362**), The firm is actively engaging with the social responsibility (r=0.273**), and The firm is trying to maximize the social surplus (r=0.317**). And the question The information delivered by the advertisement was helpful in the Consumer Attitude section showed a postive (+) correlation with the question The firm has cordiality (r=0.211**). 4.4 Consumer Behavior and Corporate Image In order to prove the hypothesis, the mean of the R and P value was calculated to apply into the simple regression analysis. The result was as Table 4 below. Independent se t p Variable Consumer Attitude in relation to the people centered management *** 2 = 0.399, = , = Table 4. Simple regression analysis on the consumer attitude and the corporate image Regression analysis, explanation ability was 39.9% by 2 being Deviation was notable as the value was (p<0.001). Effect of the independent variable consumer attitude toward the dependent variable, which was the corporate image, was statistically meaningful by showing = 0.186(p<0.001) and a positive (+) correlation. Hence the hypothesis was valid: better the consumer attitude toward the people centered management, better the corporate image. 11

12 V. Conclusion The social value shifted from the profit to people, despite the fact that we are living in the capitalist society. The importance of the people centered management is recognized by the the labours, consumers and the society, as such management method can engage with multiple social issues. As the consumer attitude and interest in the people centered management is significant, firms can change the corporate image and increase revenue when they can come with management/advertisement strategy that tackles such attitude. With this perspective, studying the previous researches allowed to access relationship of the consumer attitude, behaviour and the corporate image, and the Fishbein s Multi- Attribute Model, which aroused the question whether there is an association between the consumer attitude and the corporate image if the CPA -- modern trend for the advertisement -- was exposed. After such analysis there were 3 conclusions leaded. Firstly, most of the consumers who were exposed to the CPA recognized and remembered the content of the CPA. Secondly, there was a positive association between the corporate image and the CPA. And lastly, consumers with positive consumer attitude or has a salient belief on the people centered management showed a better consumer cognition on the corporate image. With such conclusions, it is able to mention that the firms are able to transform the corporate image after showing their CPA: by making consumers to recognize that they engage the social responsibility under the people centered management. This paper acknowledges a strong need for a firm to use CPA to form or transform one s corporate image. However the formation of the corporate image by the CPA cannot be the ethical solution. The firms should rather consider their business principle, direction under the people centered management, which will also form a positive corporate image by tackling the consumer attitude toward the social issues and people centered management. Pretentious image formed by the CPA cannot be a long lasting image. The corporate image will be positive only if the firms shift their focus on the people: the firm can form a true positive corporate image by the labours and consumers. VI. Evaluation Although the research was conducted based on the reliable survey and 200 respondents, the survey was collected from years old who were living in Jeju Global Education City. Hence, the targeted respondents should be expanded to a wider age group and in different regions. Also, the research was discussing about the Corporate Image after the exposure of CPA, which may be a perfunctory variables. Rather than using such variable, more substantive variables such as internal management strategies and system should be analyzed in order to show how actual attempt on changing its focus from profit to people affects the corporate image. 12

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