IMPACT OF CSR OF A COMPANY OVER BUYING BEHAVIOUR

SUBMITTED BY:

OCEAN VERMA
18010224091

PARUL CHAUDHARY
18010224092

BBA LLB DIVISION: B

of

Symbiosis Law School, NOIDA

Symbiosis International (Deemed University), PUNE

AUGUST, 2018

Under the guidance of

Dr. Surya Rashmi Rawat

Associate Professor
Symbiosis Law School, NOIDA
 CERTIFICATE

The project entitled “Impact of CSR of a company over buying behaviour” submitted to the Symbiosis
Law School, NOIDA for Business Studies as part of internal assessment is based on my original work
carried out under the guidance of Dr. Surya Rashmi Rawat from July, 2018 to August, 2018. The research
work has not been submitted elsewhere for award of any degree.
The material borrowed from other sources and incorporated in the research has been duly acknowledged.

Signature of the candidate:

Date: August 30, 2018

 ACKNOWLEDGEMENT

The researchers want to thank all the people associated with this project that helped or contributed in its
completion. Firstly, the researchers would like to express their sincere gratitude to Symbiosis Law
School, NOIDA and their subject teacher and project guide “Dr. Surya Rashmi Rawat” for her active
support, encouragement and for giving them the opportunity to work upon this topic. The researchers
would also extend their thanks to the authors of the textbooks that has been referred to as well as the
online databases that proved to be a useful source of information.

Name of Student(s): Ocean Verma; Parul Chaudhary

Roll Nos.: 18010224091; 18010224092
Date: 30th August, 2018
 ABSTRACT

Corporate Social Responsibility (CSR) is a relationship that a company shares with

the society which can be explained by the Social Contract theory. This study has been
conducted to diagnose the reason for such a relationship. The data for this research
has been collected by questionnaire method and has been analyzed graphically, based
on which a relationship has been re-established between CSR of a company and
buying behaviour. CSR in today’s era is not just a social obligation or publicized
pressure but also a brand promotion strategy and the many brands are exploring the
possibilities with a multi-stakeholder approach in multiple dimensions. A reputable
business does not find it difficult to find investors who would back the company with
funds. Involvement in social and community activities can attract positive responses
from media as well as the public. By implementing an integrated CSR strategy, it
would make the businesses socially accountable corporations.

Keywords:

Brand promotion, CSR, Stakeholder, Socially accountable, Social Contract theory.

TABLE OF CONTENTS

TOPICS PAGE NO.

Introduction 1

Review of literature 1-2

Objectives 2

Hypothesis 2

Research methodology 2

Results and discussion 2-5

Conclusion 5

Limitation and future scope 5

References 6
 INTRODUCTION

Corporate Social Responsibility (CSR) is a broad concept whose form may differ
from company to company. It is an idea that business should also benefit society
while making profits, in the normal course of business. The business implements
CSR- related activities to familiarize the consumers with the company as a socially
responsible brand. There has been a positive impact over the buying behaviour of
consumers when a company is involved in CSR as it creates a goodwill for the
company among the public. It has been observed that consumers tend to prefer the
brands which actively participate in CSR on a broad scale and publicize it well. This
study focuses on highlighting the relationship between buying behaviour of
consumers and businesses which are involved in CSR.

REVIEW OF LITERATURE

Awareness of CSR of a business has a positive impact on consumer behaviour while

purchasing FMCG products (Mehta, Shweta Nirvesh, 2016). There is a positive
relationship with a company's goodwill and CSR and its positive impact has been seen
on consumer's buying behaviour (Barkakati, Patra, Das, 2016; Hojatollah, Najmedin,
tajik, Makhtari, 2012; Mihalanche, Silvia Ştefania, 2013 ; Ching-wei-ho, May-ching-
ding, Yuan-Shuh-Li, 2017; Civero, Rusciano, Scarpato, 2017). There is a significant
positive relationship between CSR and consumers' buying behaviour (Rahim,
Jalaludin, Waheeda Tajuddin, Kasmah, 2011) because consumers are influenced by
the effect of a company’s product on the community (Sherlekar, Sherlekar, 2018). If a
business fulfills its CSR, the value perception by consumers have a positive effect
,which further leads to increased sales.(Marin et al.,2009).
The fulfillment of CSR by a business strengthens the consumers’ brand identification
and also help in building a long term relationship and value system of the business
and the consumer(Alexander, Francis, Kyire and Mohammed, 2014; Shamma and
Hassan, 2011; Lee et al.,2011). Carroll (1991) states that the company must provide
good quality and fair prices to all consumers. Esch et al. (2006) states that trust means
the consumer has faith in the quality of the products provided by a specific brand.
Langmeyer and Shank (1993) found that celebrities making recommendations tend to
be seen as more professional, reliable and also appealing and also more likely to
encourage people to donate and even buy the products.
Some believe that involvement in CSR has a moderation effect on the relationship
between CSR and buying intention (Assiouras, Ozgen, Skourtis, 2013; Rodrigues,
Borges, 2015). Some say that a company is more favorably evaluated by customers
when it makes monetary contributions in issues which are perceived to be more
controllable and in less controllable issues, it is more favourable to make in-kind
contributions of equivalent value to CSR (Hildebrand Diogo, Demotta, Sen, 2017).
Some also believe that a company’s ethical stance is more important that CSR
activities (Karaosmanoglu, Altinigne, Isiksal, 2016) and only ethical beliefs have a
direct relationship with purchase behaviour (Abdeen, Rajah, Gaur, 2016).
According to Ferreira, Reberio (2017), consumers' willingness to pay and purchase
intention and consumer behaviour is affected by CSR/Corporate social irresponsibility
(CSIR).

OBJECTIVES

 To gain familiarity and understand the concept of CSR

 To re-establish the relationship between CSR performing business and buying
behaviour
 To diagnose the reason for such relationship

HYPOTHESIS

The hypothesis of this study is that there is a close relationship between CSR of a
company and buying behaviour of people towards the product of that company in the
market, to the extent that both are directly proportional to each other.

RESEARCH METHODOLOGY

This study is based on both primary as well as secondary sources of data.

Questionnaire method has been adopted to collect the primary information. Secondary
information has been collected through books, statutes, journals and conference
proceedings. It is a graphical analysis of data collected from the student class of
Noida of the age group of 17-23.

RESULTS AND DISCUSSION

The findings of this research are unbiased and purely based on the data collected in
the questionnaire that was distributed to the sample.

39% of the sample is neutral about

the statement that business and
society are closely related, while
28% of the sample agree to it. 19%
strongly agree with the statement,
but 9% disagree at the same time.
5% of the sample strongly disagree
to it too.
52% of the sample are neutral about
the statement that businesses have a
concern for economic developments
and contribute to the economy. 18%
agree to it, while 20% disagree.

42% of the sample disagree when

they are told that businesses have
relative policies for social and
environmental concerns. 23% of
the sample are neutral about it.

41% of the sample agree that

Corporate Social Responsibility
(CSR) should be practised by all
companies. 17% strongly agree to
this statement, and 38% are
neutral to it.

48% of the sample agree that

CSR performing businesses are
helping the society in one way
or the other. 33% are neutral to
this statement and 13% strongly
agree to it, while 5% disagree
too.
39% of the sample disagree that
while buying a product, they
consider the fact that this
company is involved in CSR or
not. 28% are neutral about it,
19% strongly disagree while
12% agree to it.

51% of the sample decided to

stay neutral when they were
asked if they preferred buying
products of CSR performing
businesses over the others. 34%
agreed to the statement.

42% of the sample agreed that

they were willing to pay more for
a product/service if the company
uses that amount to benefit the
society. 36% stayed neutral while
11% disagreed to it pay more.
53% of the sample agree that
businesses should take
voluntary actions based on
ethical grounds. 22% stayed
neutral and 17% strongly
agreed to the statement.
 34% of the sample under study
disagree to the statement that the
more CSR a company does, the
more people would buy its
products. 31% were neutral, 16%
strongly disagreed, while 13%
agree to the statement made.

CONCLUSION AND RECOMMENDATION

After much deliberation, it is concluded that CSR of a company has a moderate

impact over the buying behaviour of consumers in the market. On one hand, CSR
increases the brand recognition of a company and make it competent to compete in
the market, while on the other hand it does not guarantee increased sales or
competitive advantage in all situations. The idea that CSR of a company and buying
behaviour are directly proportional may not always hold true. But if the business
invest in CSR at their discretion, over and above the mandatory CSR a company must
perform, then the business might gain some potential benefits, including customer
loyalty and employee retention. It may even pave a way to easier assess to capital for
the business. By way of involvement in CSR, companies give back to the society in a
multidimensional perspective.
The researchers would recommend the businesses to involve more and more in CSR
and the Government to offer schemes like tax exemptions to companies that attain a
certain threshold of CSR every year. The citizens and consumers are advised to be
more aware about social responsibilities and recognize such brands that are beneficial
for the health of the people as well as the environment.

LIMITATIONS AND FUTURE SCOPE

Certain limitations were faced by the researchers while compiling this research paper.
Due to limited availability of capital, some expensive books could not be purchased,
resulting in the loss of helpful information which could have been extracted from
them. Because of the limited time allotted to complete this paper, extensive research
on relevant topics were not done exhaustively.
Future studies and research could be conducted on the impact of CSR over the buying
behaviour of different income groups, and/or the awareness of CSR and businesses
performing CSR among the buyers of different age groups.
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