Being Good Can Enable Brands to Launch Products

Businesses spend billions annually providing support for and communicating about social issues, which can help their brands to build a reputation for being socially responsible. But how does a reputation for doing good enable the introduction of new products?

Common sense suggests that social responsibility provides minimal value in this regard. And not surprisingly, when evaluating new products, prior research suggests that people care more about a brand’s good products than the social good a brand creates. But Zachary Johnson, PhD, associate professor of decision sciences and marketing, and his colleagues, show that a company’s social responsibility reputation can facilitate the acceptance of brand extensions, or new products outside of a brand’s existing product categories. Why does this occur?

Much as you might reciprocally aid someone who helped you or someone else, “our research establishes that a company’s social responsibility reputation can motivate consumers to reciprocally support or help the company when it needs it.” As a result, when a brand introduces a low-fit product that consumers cannot easily connect to, consumers recognize the potential failure of this product. “This reputational advantage provides companies with a social responsibility reputation, but not one based around good products, with an opportunity to extend their product lines further.”

Consider, for example, that TOMS (a maker of ethically oriented shoes) now offers coffee. Dr. Johnson’s research suggests that the ethical positioning of brands can enable distant extensions when a brand leverages its reputation for doing good. Put simply, there is often a “reputational advantage for doing the right thing,” Dr. Johnson explains.

Across six studies, the researchers found this effect was stronger with consumers who place high value on relationships and on helping others, and weaker when social responsibility initiatives seem to be designed to serve a company’s self-interest rather than the interests of society.

You can read the original article, “Good Guys Can Finish First: How Brand Reputation Affects Extension Evaluations,” by Dr. Johnson, Huifang Mao, PhD, Sarah Lefebvre, PhD, and Jaishankar Ganesh, PhD, online at Journal of Consumer Psychology.

Dr. Johnson’s research specialties are in consumer decision-making, brand associations, corporate social responsibility and related topics. Or more simply put, he says: “Why we buy.”