the case of vedan

Measuring the impact of corporate social responsibility

on consumer behaviorTHE CASE OF VEDAN

VIETNAM Instructor : Mr. Hung Quoc Nguyen, MEd. Group : Fantastic 5 Member :Binh Thai Nguyen

Ngan Kim Le NguyenNghi Nhat Vuong Le

Que Nguyet HoangQuynh Thuy Thi NguyenY Nhu Le Huynh

Presented by: Fantastic 5

Chapter 1:Introduction


INTRODUCTION: Rationale

In the world: Many firms have been “breaking the rules” of CSR because of: The significantly increased

level of globalization’s competition.

The need to gain more profits.

In Vietnam: Not an exception.Presented by: Fantastic 5

INTRODUCTION: Objectives

A research has been conducted to find out: how Vietnamese consumers are affected by CSR in the case of Vedan Vietnam.

It helps to: Find out solutions for companies in

reputation’s regaining, maintaining and developing.

Provide helpful reference information for students and researchers.


INTRODUCTION: Scope of the study

Monosodium Glutamate (MSG)Presented by: Fantastic 5


Scandal in 2008

Located in Dong Nai province,

near Thi Vai RiverPresented by: Fantastic 5

Sphere of research:


Place: - Co.opmart

Ly Thuong Kiet at District 10

- Co.opmart Phu Lam at District 6

Subject: - Vietnames

e individual shoppers

Time: from March 3rd, 2014 to April 29th, 2014


Consisting of 5 main chapters: Chapter 1: Introduction Chapter 2: Literature review Chapter 3: Research

methodology Chapter 4: Data analysis Chapter 5: Suggestions and

conclusions

INTRODUCTION: Structure of Research


Chapter 2:Literature

ReviewPresented by: Fantastic 5

Literature Review: A brief grasp of CSR

Carroll’s CSR

Pyramid(1991)

The most comprehensive content and scope

of CSR


An overview of CSR in Vietnam context: “CSR has become necessary requirement for each company, if the company does not embrace CSR, they cannot approach the global market.” (Saga Vietnam, 2008)

Any challenges?▪ The global competitive pressures▪ The awareness of consumers▪ The lack of capital, techniques

Literature Review:An Overview of CSR in Vietnam context


Glimpse on Consumer Behavior: “The mental, emotional, and physical

activities that people engage in when selecting, purchasing, using, and disposing of products and services so as to satisfy needs and desires” (Hoyer & Macinnis, 2009)

Influenced by: ▪ Cultural ▪ Social▪ Personal ▪ Psychological

Literature Review: Glimpse on Consumer Behavior


In Vietnam: “The Vietnamese consumer perception on corporate

social responsibility”, Bui Thi Lan Huong (2010) “Corporate social responsibility: A study on awareness

of managers and consumers in Vietnam”, Pham Duc Hieu (2011)

Around the world: “The importance of corporate social responsibility on

consumer behavior in Malaysia”, Rahim, Jalaludin and Tajuddin (2011)

“The role of Corporate Social Responsibility in consumer behavior: The Case of Peruvian Consumers”, Marquina (2007)

Literature Review: Previous Studies


Chapter 3: Methods & Materials


Methods & Materials: Methods

Quantitative research 120 respondents

chosen to fill out a questionnaire

A pilot test is taken in advanced


Methods & Materials: Materials

With 20 limited answer options

Handed out to 120 people shopping at 2 Coopmarts

Recorded & figured by Microsoft

ExcelPresented by: Fantastic 5

Methods & Materials: Overview

Vedan Vietnam The scandal

Dumped untreated sewage to Thi Vai River The consequences

Made the river heavily polluted (the color, the smell, the living animals…)

Affected people living in the neighborhood The punishment

Pay 100% compensatory damages to local people

Administrative fine and accrued environmental fee for the Government


Chapter 4:Data

AnalysisPresented by: Fantastic 5

Data Analysis: Collection of questionnaires

110/120 questionnaires were returned. (92%)

10 more sheets were excluded for not having answered 16 questions completely.

100 questionnaires were examined.

Questionnaire returned

92%

Questionnaires examined 83.3%


Data Analysis:Description of the results

Category

Options

Frequency

Rate (%)

Sex Female 87 87 %Male 13 13%

Age

16-25 26 26 %26-40 30 30 %

Over 40 44 44 %

Education

High school 7 7 %University/

College88 88 %

Post graduate 5 5 %

Total

100 100 %Table 1.1 Respondents’ profilePresented by: Fantastic 5

The real state of affairs of Vedan scandal


76%

24%

People using Vedan's MSGUse Unuse

83%

17%

Scandal of Vedan 's PopularityKnow Unknown



Attitute Percen-tage (%)

1. “Normal. It’s the company’s business, and because it doesn’t affect the quality of its products, I keep using Vedan.”

7

1. “I don’t really care.” 51. “After acknowledging this

issue, my family and I have stopped using Vedan’s products and switched to another MSG manufacturer no matter how good they are.”

88

100

62%

38%

Decision of cus-tomers

when choosing a product

Refuse using

Consider buying


Chapter 5:Suggestions &

Conclusion


Suggestion

CSR activities influence the prestige and benefits of the company.

The company should: Have high awareness

on CSR Consider the long-

standing benefits, not short-term ones


SuggestionsSolutions Percentag

eOfficially admit their mistakes through the media. 82.5

Come up with specific solutions to solve the pollution of the river, such as: enforcing the wterwaste treatment systems. 100

Offer an acceptable and long-term compensation plan. 96.8Commit not to dump untreated water into the water again. If this happens again, they will have to pay 10 times more than the original fine.

55.6

Commit in doing business morally. 92.1

Do charity; cooperate with non-government organizations to provide funds for social projects and activities. 93.7

Increase the number of articles written about the company as well as advertisements on the media to gain back the company’s image.

55.6

Offer various promotions to draw customers’ attention. 47.6

Suggestion: The should-have attitude & strategies of the heads

Vedan should: Hold the press to courageously

apologize to the public Propose detail plans for

deservedly compensation Install water-waste treating

system Participate in social activities and

charities Support the local development Widely implement and report CSR

through campaigns and advertisements on various channels

Attract talents with high sense of CSR awareness


Results?- Relieve the

groundswell of the public

- Regain the customers’ good impression and trust

- Maintain long-standing rapport

Suggestion:The must-have self-awareness of the heads

Realizing the importance of: A sustainable society: offers a high quality of life Environment: one of the indispensable parts

Realizing the link between good CSR policy & increasing profit Not just about profits. Involves a relationship of

customers, suppliers and the local community Having high CSR can:

Polish reputation Build customers’ loyalty Increase stable profit in long-run

Balance financial and environment performance.


Conclusion

- Play an undeniably important role in the reputation and image of any company.

- Affect long-term growth

Let’s do CSR!

Corporate Social Responsibility


References


References


Books:Barnes, A. (2011). Corporate Social Responsibility and its effects on Brand Trust, AUT Business School.Bui, Thi Lan Huong. (2010). The Vietnamese consumer perception on corporate social responsibility, The DreamCatchers Group, LLC.Carroll, Archie. B. (1991). The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Business Horizons, 34, 39-48.Hansen U, Schrader U. (1997). A modern model of consumption for a sustainable society. Department of Marketing and Consumer Research, University of Hanover.

References

Online material:European Commission. (2006). Communication on CSR. Retrieved July, 2011. From:

http://ec.europa.eu/enterprise/policies/sustainablebusiness/cor porate-social-responsibility/index_en.htmCSR Vietnam Forum. (2009). Social responsibility of enterprises in Vietnam: from theory to practice. Retrieved March, 2010. From:

http://www.vietnamforumcsr.net/default.aspx?portalid=1&tabi d=17&itemid=4703


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