Branding through responsibility: the advertising impact of CSR activities in the Korean instant noodles market

TL;DR

This study shows that CSR activities in the Korean instant noodles market enhance consumer perception and significantly increase sales, comparable to substantial advertising investments, thereby fostering firm growth.

Contribution

It provides empirical evidence that CSR improves corporate image and boosts sales, highlighting CSR's role as a strategic tool for growth in the food industry.

Findings

Ottogi's sales increased by 6.7% due to CSR activities.

CSR improved consumer favorability and firm image.

The sales impact of CSR is comparable to a 60% increase in advertising.

Abstract

This paper empirically examines the extent to which a favorable view of a firm, shaped by its social contributions, influences consumer choices and firm sales. Using a favorability rating that reflects media exposure of each firm's corporate social responsibility (CSR) activities in the Korean instant noodles market during the 2010s, we find evidence that improvements in the corporate image of Ottogi - one of the country's largest instant noodle producers - positively affected consumer utility for the firm's products. Notably, Ottogi's annual sales of its major brands increased by an average of 23.7 million packages, or 6.7%, as a result of CSR activities and the associated rise in consumer favorability. This effect is comparable in magnitude to that of a nearly 60% increase in advertising spending. Our findings suggest that CSR can foster firm growth by boosting product sales.