Is Charity a New Tool of Branding?

Abstract

Charity or social work is often seen as a tool for improving the image of the company and enhancing the goodwill among the customers. But, this paper goes beyond the purview of reputation and goodwill and tries to understand the impact of these activities on the brand. Specifically, this research paper states that charity activities generates social goodwill—even when they are not related to the company’s core area of business, as in the case of charitable giving—can somewhat change the perception towards the product or service, such that products & services of companies engaged in social activities are perceived as better in delivering the value to the customer. More important, the data show that inferences drawn from a company’s social actions are strong enough to alter the product evaluations even when consumers can directly observe and experience the product. By documenting that charity work can benefit consumer perceptions of product performance, these findings show that doing good like a charity work can indeed translate into doing well for overall image of the brand.