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Project report on Impact of Corporate Social Responsibility on

Consumer Preference for a Brand with special reference to Classmate brand of ITC

Muzamil Quadir



Project Report submitted to the University of Mysore in partial fulfilment of the requirements of IV Semester MBA degree examinations 2013

Ramaiah Institute of Management Studies #15, New BEL Road, MSRIT Post, M S Ramaiah Nagar Bangalore 560054 1

Certificate from the Guide Ramaiah Institute of Management Studies

Bangalore - 560054


This is to certify that this Project Report on Impact of Corporate Social

Responsibility on Consumer Preference for a Brand with special reference to Classmate brand of ITC is a bona fide study of Muzamil Quadir and carried out
under my guidance and supervision.

Place: Bangalore Date: Prof. Julie Sunil

Certificate from the Dean Ramaiah Institute of Management Studies

Bangalore - 560054


This is to certify that this Project Report on Impact of Corporate Social

Responsibility on Consumer Preference for a Brand with special reference to Classmate brand of ITC is a bonafide study of MUZAMIL QUADIR and carried
while the study in the college under my guidance and supervision of Prof. Julie Sunil.

Place: Bangalore Place: Thomas Dr.Rejimon


I hereby declare that this Project Report on Impact of Corporate Social

Responsibility on Consumer Preference for a Brand with special reference to Classmate brand of ITC submitted in partial fulfilment of the requirement for IV
Semester MBA Degree examinations 2013 of University of Mysore through Ramaiah Institute of Management Studies is my original work and not submitted to any other university. This work has been done under the supervision of Prof. Julie Sunil in Ramaiah Institute of Management Studies, Bangalore.

Place: Bangalore Date: Signature of the Student

Muzamil Quadir (11MB5105)

Acknowledgements are due to many persons without whose cooperation, support. Encouragement and guidance, this dissertation would not have been carried out. I owe a great debt of gratitude to my guide Prof. Julie Sunil for her scholarly guidance, constant help and encouragement throughout the study. I also express my gratitude to the University of Mysore for providing me an opportunity to do this dissertation work. I am extremely thankful to the chairman, Department of Management, university of Mysore, Mysore for providing an opportunity to do this work for my MBA Degree. I also express my sincere thanks to Dr. M. R Pattabhiram, Director, Ramaiah Institute of Management studies, for providing an opportunity to do my MBA in the Institute. I also express my sincere thanks to Dr.Rejimon Thomas, Dean, Ramaiah Institute of Management Studies, for providing an opportunity to do my MBA in the Institute. I also express my sincere thanks to all faculty members and non- teaching staff of Ramaiah Institute of Management Studies who have supported me to do this dissertation work. I also owe my gratitude to the librarian and the staff, Ramaiah Institute of Management Studies for helping me to get relevant literature from time to time. I would like to express my grateful acknowledgement to those writes whose contributions are quoted in the study as well as in the bibliography. Place: Date: Bangalore

Chapter number Executive Summary Introduction Limitations of the research Ch-1 Review of literature 1.1 1.2 1.3 CSR definition Ethics and CSR Research on CSR relationships 1 2-12 13 14-32 14 14 25 26 27 31 29 Particulars Page No.

1.4 Stakeholders and Shareholders Relationships with CSR 1.5 CSR and brand trust 1.6 initiatives of Indian companies 1.7 Government initiatives to promote corporate social responsibility among companies Ch-2 Analysis and Findings 2.1 Chapter 2.1: Analysis and findings of data collected from consumers Ch-3 Chapter 3: Responses of retailers 3.1 These below are the responses by retailers on rating the ITC (CLASSMATE) as supplier. 3.2: Regression Analysis

34-56 41 46-56 52


Ch-4 Ch-5 Ch-6

Summary of findings Recommendations and suggestions Bibliography and Appendix

60 62 64

LIST OF FIGURES SL NO 1 2 3 4 5 6 FIGURE NO. FIG NO. 1 FIG NO. 2 FIG NO. 3 FIG NO. 4 FIG NO. 5 FIG NO. 6 PARTICULARS Ranking of brands Recall percentage Preference of classmate Attention towards CSR Premium price Deliberately buy Classmate PAGE NO 34 35 35 36 36 37


Recommend others



Sense of fulfilment


9 10

FIG NO. 9 FIG NO. 10

Helping our country Giving back to society

39 40

11 12

FIG NO. 11 FIG NO. 12

Advertising and publicity purposes Education for less privileged

40 41

13 14 15 16 17 18 19

FIG NO. 13 FIG NO. 14 FIG NO. 15 FIG NO. 16

Save environment Public health and hygiene Women empowerment Rural development Most desired CSR

41 42 42 42 43 44 44

FIG NO. 17 FIG NO. 18

Gender Age

SL. No. 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 SL NO.

Figure no FIG NO. 19 FIG NO. 20 FIG NO. 21 Retailers FIG NO. 22 FIG NO. 23 FIG NO. 24 FIG NO. 25 FIG NO. 26 FIG NO. 27 FIG NO. 28 FIG NO. 29 FIG NO. 30 FIG NO. 31 FIG NO. 32 FIG NO. 33 FIG NO. 34 Table no.

Particulars Occupation Monthly income Educational level Time of association Familiarity with ITC products Quality Sales performance Promotional schemes Rating on the basis of monthly sales Margins Shelf arrangement Services Promotion Feeling of change in society Interested in offering help Sense of responsibility Particulars

Page no 44 45 45 46 47 47 48 48 49 50 50 51 51 52 52 53 Page number

36 37 38 39 40

FIG NO. 35 FIG NO. 36 FIG NO. 37 FIG NO. 38 FIG NO. 39

Profit margins Overall performance of scheme Stake in the scheme Awareness among consumers Readiness to pay

53 54 55 56 59

TABLES SL NO 1 2 3 TABLE NO Table-1 Table-2 Table-3 PARTICULARS Model summary Coefficients ANOVA PAGE NO 57 58 58

This project is mainly focused on studying the consumer preference of Classmate stationery by analyzing and studying the behavior of consumers towards the CSR initiatives undertaken by companies. The other main purpose is to study the factors which are most important in determination of a consumers preference of Classmate stationery. In this project various factors were determined to study the preference of consumers and various quantitative tools were used to study the same thoroughly. Since CSR has really become one of the most discussed and debated topic, the present research is aimed to explain whether the CSR initiatives taken up by companies help them in securing consumer preference keeping in view the interests of all stakeholders. Earlier researches identified that corporate social responsibility (CSR) has had a positive impact on consumer behavior, but even so little was known about these effects. The present research investigates the relationship between CSR and consumer preference, as well as the variables that best represent CSR. The research also looks into the matter of charging premium price for products and the consumers response towards the same. The study was conducted by administering two questionnaires for consumers and retailers separately. The questionnaire for consumers was circulated online and a paper questionnaire was administered for retailers. The sampling method considered in this research is nonprobabilistic sampling viz. convenience sampling and the sample size is 100 and 30 of consumers and retailers respectively. The respondents are from all walks of life including students and employees. The data collected was first tabulated and presented in excel and then SPSS data viewer was used to analyze it. The data was analyzed using regression analysis. As per the findings collected and analyzed the CSR initiatives are taken quite seriously and positively by consumers and it does influence in shaping their preference towards a particular brand. Overall this study explores the linkages between CSR and consumer preference. This study provides a foundation for further research and identifies several important implications for the leaders of organizations to consider in terms of CSR investment and the effects on brands within their portfolio. This positive reaction should create a positive effect towards brand feelings and trust, for consumers of products and services of companies that engage in CSR activities.




COMPANY PROFILE ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 14 billion and a turnover of over US $ 5 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. 12

ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 25,000 people at more than 60 locations across India. The Company continuously endeavours to enhance its wealth generating capabilities in a globalising environment to consistently reward more than 3, 60,000 shareholders, fulfil the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation For the Shareholder." History ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multibusiness portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company. ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house. In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation. ITC chose the hotels business for its potential to earn high levels of foreign exchange, create tourism 13

infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 100 owned and managed properties spread across India. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India. Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam Paperboards Division. In November 2002, this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. ITC's paperboards' technology, productivity, quality and manufacturing processes are comparable to the best in the world. It has also made an immense contribution to the development of Sarapaka, an economically backward area in the state of Andhra Pradesh. It is directly involved in education, environmental protection and community development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve Customer service with reduced lead time and a wider product range. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since inception, its shares have been held by ITC, British American Tobacco and various independent shareholders in Nepal. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). To harness strategic and operational synergies, TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002. Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. The Division is today one of India's largest exporters. ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are now operatonal in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh. In 2000, ITC launched a line of high quality greeting cards under the brand name 'Expressions'. In 2002, the product range was enlarged with the introduction of Gift wrappers, Autograph books and Slam books. In the same year, ITC also launched 'Expressions Matrubhasha', a vernacular range of greeting cards in eight languages and 'Expressions Paperkraft', a range of premium stationery products. In 2003, the company rolled out 'Classmate', a range of notebooks in the school stationery segment. ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive 14

stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand, John Players, in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills Lifestyle India Fashion Week - that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry. To mark the occasion, ITC launched a special 'Celebration Series', taking the event forward to consumers. In 2007, the Company introduced 'Miss Players'- a fashion brand in the popular segment for the young woman. In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited, to more aggressively pursue emerging opportunities in this area. Today ITC Infotech is one of Indias fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers across key focus verticals Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and Media & Entertainment. ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour). 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC's entered the fast growing branded snacks category with Bingo! in 2007. In just seven years, the Foods business has grown to a significant size with over 200 differentiated products under six distinctive brands, with an enviable distribution reach, a rapidly growing market share and a solid market standing. In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC now markets popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim Metro. ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa. ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Inizio, the signature range under Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and women (Inizio Femme). Continuing with its tradition of bringing world class products to Indian consumers the Company launched 'Fiama Di Wills', a premium range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in 15

October 2007 and Vivel De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008. Meaning of Name ITC stands for Imperial Tobacco Company initially when it was incorporated for the 1st time in 1924. Later on the name has been changed to Indian Tobacco Limited in 1974. After that, in recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. There is no specific meaning of ITC name is given on their website. But what I think is that it is the name given to the company to signify the operation of the company. Since ITC started its business in tobacco industry, they have chosen the name to demonstrate their nature of business and what exactly what they want to perform. Evolution of Name ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. ITC had a humble beginning and in the initial days it used to operate from a leased office on Radha Bazar Lane, Kolkata. On its 16th birthday on August 24, 1926, ITC purchased the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata. Two years later company's headquarter building, 'Virginia House' came on that plot. Progressively the ownership of the company Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses, the full stops in the Company's name were removed effective September 18, 2001 and the Company was rechristened as 'ITC Limited'. Since the present research is based on the educational and stationery offering the profile of the same is given as below: Education & Stationary products ITC made its entry into the stationery business in the year 2002 with its premium range of notebooks, followed in the year 2003 with the more popular range to augment its offering. Today, ITC continues to blend its core capabilities to market a growing range of education and stationery products. These capabilities include, a. Manufacturer of Indias first Ozone treated environment friendly Elemental Chlorine Free (ECF) pulp, paper an d paperboard. 16

b. Knowledge of image processing, printing & conversion garnered from its Packaging & Printing Business. c. Brand Building & Trade Marketing & Distribution strengths resident in its FMCG Business. ITCs stationery Brands are marketed as Classmate and Paperkraft, with Classmate addressing the needs of students and Paperkraft targeted towards college students and executives. Classmate - Indias truly largest National brand, reaching 65,000 outlets across the country, has over 300 variants in its range which comprises notebooks, long books, practical books, drawing books, scrap books, reminder pads etc. The Classmate Fun N Learn range of children books targeting pre school learners, comprising categories like Pre School Learner, Active Minds and Read Aloud Tales with features like Wipe n Use again, Trace & Color and Puzzles ensure that a child's first lessons are truly enjoyable. Classmate Invento Geometry Boxes, launched for school students comprise a worldclass precision compass and high quality plastic instruments coupled with interesting trivia and useful information, to make geometry more fascinating for students. Aesthetically designed, Classmate pens offer the consumer a smoother and more comfortable writing experience through use of ergonomic design, reducing the effort required for writing. The initial launch comprises ball pens - Classmate Safari and Classmate Ilet - and gel pens - Classmate Glider and Classmate Octane. A new entry to the Classmate portfolio is its range of HB Jet Black pencils. Designed attractively for school kids, the pencils offer a unique advantage of lesser lead wear out and thus, Stay Sharper for Longer. The Classmate Notebook range builds in regional preferences and caters to the requirements of All India & State Education Boards. Every Classmate notebook carries ITC's Corporate Social Responsibility message on its back. For every four Classmate Notebooks, ITC contributes Re. 1 to its rural development initiative that supports, among other projects, primary education in villages. Classmate has successfully run the Classmate Young Author & Artist Contest for 5 years. The contest is a national level event going across 34 cities and getting participation from 5000 schools. The Paperkraft brand recently launched premium business paper an environment friendly multipurpose paper for office and home use. The paper has been crafted by ITCs Bhadrachalam unit using a pioneering technology, called Ozone Treated Elemental Chlorine 17

PURPOSE OF THE RESEARCH Corporate Social Responsibility is understood as the obligation of decision-makers to take actions that protect and improve the welfare of society as a whole along with their own interests. Every decision the business person makes and every action he or she contemplates has social and business implications. It is debatable whether the CSR initiatives really help to achieve the company goals. It has become a very common practice for the companies. In most cases, CSR activities aim at reducing negative externalities, such as pollutant emissions or the variability of farmers' income. In some cases, positive externalities are produced, as in the financing of technological transfers to local farming communities, or school building. CSR has increasingly become an important concept in public policies, corporate communication and management sciences, which have used various conceptual framework to examine consumer demand for CSR (see, inter alia, Carrigan and Attalla, 2001; Mohr et al., 2001; Sen and Bhattacharya, 2001; Chatzidakis et al., 2007; Valor, 2008). Consumers' responses to CSR have been less carefully analysed in economics, perhaps because there is wide gap between positive attitudes toward social responsibility and actual purchase behaviours. Opinion surveys reveal that there is a growing interest of consumers in the use of socially responsible technologies by companies (Doane, 2001). According to MORI (2000), 70 per cent of European consumers declare that they are willing to pay more for a product.

Is CSR a fruitful activity keeping in view the interests of all stakeholders especially in and how it benefits the ultimate owner?

To study the methods by which companies communicate their CSR to the public and how well does that help in the consumers recall of the brand at the time of purchase.

Do the CSR initiatives and efforts taken by companies translate into the preference of the brand over the other brands not doing CSR?


Research Design:
The descriptive research design is followed in the current research because the study aims to study the relationship of CSR and consumer behaviour in preference of a particular brand. Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. However, it does not answer questions about e.g.: how/when/why the characteristics occurred, which is done under analytic research. Although the data description is factual, accurate and systematic, the research cannot describe what caused a situation. Thus, Descriptive research cannot be used to create a causal relationship, where one variable affects another. In other words, descriptive research can be said to have a low requirement for internal validity. The description is used for frequencies, averages and other statistical calculations. Often the best approach, prior to writing descriptive research, is to conduct a survey investigation. Qualitative research often has the aim of description and researchers may follow-up with examinations of why the observations exist and what the implications of the findings are.

H0: There is no relationship between the CSR and consumer preference H1: There exists a positive relationship between the CSR and consumer preference. H0: There is no relationship between the CSR and the willingness to pay a premium

price. H1: There exists a positive relationship between CSR and the willingness to pay a

premium price


Sampling Plan:
Sampling unit: Consumers, Retailers Sample size: 100 consumers, 30 retailers Non-probabilistic sampling i.e.; convenience sampling Sampling is the use of a subset of the population to represent the whole population. Probability sampling, or random sampling, is a sampling technique in which the probability of getting any particular sample may be calculated. Nonprobability sampling does not meet this criterion and should be used with caution. Nonprobability sampling techniques cannot be used to infer from the sample to the general population. Any generalizations obtained from a nonprobability sample must be filtered through one's knowledge of the topic being studied. Performing nonprobability sampling can be considerably less expensive than doing probability sampling. However, the results of studies conducted using nonprobability sampling are of extremely limited value. Convenience, Haphazard or Accidental sampling - members of the population are chosen based on their relative ease of access. To sample friends, co-workers, or shoppers at a single mall, are all examples of convenience sampling. Such samples are biased because researchers may unconsciously approach some kinds of respondents and avoid others (Lucas 2012), and respondents who volunteer for a study may differ in unknown but important ways from others

Data collection:
Primary Data: This research has been conducted by administering two structured questionnaires online as well as offline for retailers and consumers separately. A total of more than 130 questionnaires were distributed. There were separate questionnaires for consumers and retailers; the consumers questionnaire was circulated online through websites like Facebook, Gmail and Linked In and the questionnaire for retailers was directly filled in person, total of 30 questionnaires were circulated among retailers.

Data Analysis: SPSS and MS Excel

Regression analysis: A body of statistical techniques in which the form of the relationship between a dependent variable and one or more independent variables is established so that knowledge of the values of the independent variables enables prediction of the value of the dependent variable or likelihood of the occurrence of an event if the dependent variable is categorical. Regression analysis is a method by which quantitative social science seeks to 20

establish how things are caused. The objectives are both scientific description and prediction. If we know the form of the relationship between things we have measured and know to be causal to something else, then we can predict the value of the caused thing. The dependent variable in this research is Consumer preference and independent variables are many which affect the consumer preference of consumers.



Since the topic corporate social responsibility is one of the most discussed topics in the modern day business, it has drawn attention from all the stakeholders including consumers. Consumers are also building consciousness towards the same. Since the present research has been conducted to study the topic impact of CSR on the consumer preference though the research has been conducted quite rigorously but still like the rule says every research has some limitations to which a researcher cant attend to due to the inherent limitations in the research process. The present research suffers from following limitations: Small sample size: The sample size of the present research is 100 which is quite small keeping in view the scope of Corporate Social Responsibility and its impact on the society, it would have been prudential to involve the beneficiaries of the scheme but due to constraints of time and finance it was subject to confinement. Composition of sample: The sample is composed of good number of educated people who are quite conscious of the positive or negative measures of the companies. In addition to that almost none of the minor students has found a place in sample which also would have been quite useful in understanding the behavior of children towards the scheme, because they are also the direct customers of the Classmate products. Method of sampling: Convenience sampling though quite useful but suffers from many limitations that limit the equal chance of every individual being selected in the sample. Since the sampling frame is not known, and the sample is not chosen at random, the inherent bias in convenience sampling arises that the sample is unlikely to be representative of the population being studied. This undermines our ability to make generalizations from the sample to the population we are studying. CSR being a social initiative, it is supported by every individual on paper: The bias arises from the human nature which is people tend to support causes on paper but when action is to be taken only a few prove to be pragmatic. Online data collection: Though the online data collection is convenient and cost effective method, it limits the interaction of respondents with the enumerator.



CSR is the concept of organizations promoting, participating and initiating social programs in order to address an issue or concern in the wider community. A broad definition, including multiple dimensions such as philanthropy and stakeholders, is favoured by academics (De Los Salmones et al., 2005; Godfrey & Hatch, 2006; Piercy & Lane, 2009). The definition of CSR has developed over time from the 1950s to the present. Literature from the 1980s onwards presents fewer set definitions and further research into CSR (Carroll, 1999).

1.2Ethics and CSR

Ethical decision making in leadership and in regards to the environment is an important part of CSR. Agatiello (2009) states ethics is made up of role, responsibilities and interactions between people. However, the foundations of each of these principles are different depending on the practice and the person (Frederiksen, 2010). Sharp and Zaidman (2009) suggest that CSR decisions can be divided into two groups, from an ethical and moral basis or from a business orientation. Although, Quairel-Lanoizelee (2011) propose demand for virtue is weak in the business world but the expectation for ethical and responsible company behavior is still strong. Agatiello (2009) advise there needs to be a rigid structure for making ethical decisions for environmental strategy. Similarly, Sharp and Zaidman (2009) conclude that CSR decisions need to be governed by strict rules. Ethical decisions are now valued as major responsibilities for corporations and these corporations have a duty to environmental conservation. Frederiksen (2010) discussed the moral frameworks for ethical decisions and concluded that utilitarianism would dictate the best CSR action; this creates the most happiness for majority of stakeholders. Bansel and Roth (2000) support the idea of involving stakeholders in important decisions. Duarte (2010) concludes the creation of an organizational identity that supports ethical decision making can help mould a culture that supports CSR activities by highlighting sustainability, environment, ethics and transparency. Creyer and Ross (1997) advocate that the behaviours a company engages in can affect the way the consumer views a product, consumers may even be more willing to reward good 23

ethical behaviour by actions such as paying a higher price for a product. However, Carrigan and Attalla (2001) suggest stating ethical firm behaviour will be rewarded with purchase intention is neither straightforward nor simple. Creyer and Ross (1997) discovered if consumers perceive no difference between companies offering a similar product, it may be the marketing manager promoting the ethics of the firm that sways the purchase decision. CSR by definition is an ethical behaviour, but the actual definitions of ethical and unethical need to be determined. Carrigan and Attalla (2001) suggest consumers are more informed in this modern age and may have less sympathy with causes they feel they can not relate to. However, Ardvisson (2010) discovered businesses fundamentally engage in CSR activities and communication to avoid negative impacts rather than proactively wanting to help society. The reactive response directly influences corporate reputation and brand building. CSR has increasingly become an important concept in public policies, corporate communication and management sciences, which have used various conceptual framework to examine consumer demand for CSR (see, inter alia, The spectrum of activities covered by CSR is likely to be large, as social responsibility requires that attention be paid to many stakeholders, including the companys stock holders, its suppliers, its employees, its customers, and all individuals and communities that may be affected by its decisions. This is reminiscent of considerations of externalities associated to private actions in public economics. In most cases, CSR activities aim at reducing negative externalities, such as pollutant emissions or the variability of farmers' income. In some cases, positive externalities are produced, as in the financing of technological transfers to local farming communities, or school building. Hence, from a neo-classical point of view, favouring the development of CSR has three key advantages. It may help to solve some market imperfections, such as the externalities generated by market activities. It may increase the local provision of public goods in an efficient, decentralized, manner. A priori, state intervention is kept at a minimum, and so are market distortions. Carrigan and Attalla, 2001; Mohr et al., 2001; Sen and Bhattacharya, 2001; Chatzidakis et al., 2007; Valor, 2008). Consumers' responses to CSR have been less carefully analyzed in economics, perhaps because there is wide gap between positive attitudes toward social responsibility and actual purchase behaviors. Opinion surveys reveal that there is a growing 24

interest of consumers in the use of socially responsible technologies by companies (Doane, 2001). According to MORI (2000), 70 per cent of European consumers declare that they are willing to pay more for a product which they perceive as ethically superior and 66 per cent declare that a CSR claim has triggered a purchase at least once in the past year. From the economists point of view, CSR products are both private goods and public goods. Their consumption produces some private hedonic benefits, but consumers can also derive utility from knowing that the firm is committed to care for the well-being of their suppliers and their employees or for the environment, i.e., that it produces some public good alongside the product supply chain ( Hines and Ames, 2000). Yet, market shares remain quite low: French consumers and U.S. consumers spent only 1.71 Euro and 1.14 Euros respectively per year on purchases of fair-trade products in 2005, as against 19.02 Euros for the Swiss or 4.62 Euros for the British (Poret, 2007). It complements marketing- and psychology-based insights into this question, by focusing on the two main economic barriers to CSR consumption: (i) the consumers subjective valuation of CSR, and (ii) the information asymmetry between companies and consumers. Understanding and breaking down these barriers is a key issue, because companies involvement into social responsibility is partly determined by the prospect of not losing profits or expanding market opportunities. In this perspective, we show that the development of CSR may be favored by appropriate consumer policies. From the economists point of view, CSR products are both private goods and public goods. Their consumption produces some private hedonic benefits, but consumers can also derive utility from knowing that the firm is committed to care for the well-being of their suppliers and their employees or for the environment, i.e., that it produces some public good alongside the product supply chain ( Besley and Ghatak, 2007). Whether the consumption of CSR products leads to additional welfare gains for consumers, as compared to standard products, depends on two conditions. First, consumers must grant some value to the public good aspect of their purchase. Second, they must be well informed about the quantity of public good that has been incorporated into the product during the production process. The decision to purchase a CSR product is primarily determined by the consumer's willingness-to-pay (WTP) for CSR. The WTP is a monetary measure of his/her preference for this product attribute. It depends on two parameters of her utility function: the marginal utility of income and the marginal utility of CSR. The latter is determined by her social 25

preferences, which refers to her propensity to internalize the effect of her own actions on others welfare. We first show how social preferences are revealed by economic experiments using actual monetary incentives. This literature suggests a first explanation for the attitudebehaviour gap: most (if not all) measures of attitudes toward ethical consumption are not incentive compatible. We then trace social preferences back to three important motives: altruism, self-image and social image. Self-image concerns are important for those individuals Self-image concerns are important for those individuals who want to reassure themselves that they are good people by contributing to the provision of public good. Social image concerns may also drive the choice of CSR products, when their consumption is a means of buying social prestige or of avoiding social stigma (Bnabou and Tirole, 2010). We present empirical evidence that, in addition to pure altruism and self-image, social-image concerns strongly affect individuals generosity, which should be more intensively used in the private and social marketing of ethical products. Last, following the recent advances in the economics of personality psychology, we relate social preferences to some personality traits. For psychologists, personality traits are "relatively enduring patterns of thoughts, feelings, and behaviours that reflect the tendency to respond in certain ways under certain circumstances" (Roberts cited in Almlund et al., 2011). Interestingly, some traits have been linked to the individual propensity to donate to charities or to engage in social activities. As personality traits have been shown to be sensitive to interventions, especially during early childhood, education is a means of favouring the consumption of ethical products (Borghans et al., 2008). However, well-developed social preferences will not translate into actual purchase decisions for consumers with a high marginal utility of income, i.e. for the less well-off, as the latter reduces their WTP. In addition, a high WTP for CSR products will lead to a purchase only if consumers have accurate information about who has made the product, and how it has been made. That the production process followed socially responsible procedures is largely a credence attribute: its presence cannot be verified by a careful and low-cost pre-purchase inspection, as it would be the case for a search attribute, or by the repetition of consumption experiences. This raises problems of information asymmetry between consumers and firms, and the latter are likely to develop strategic behaviors on the supply side of the market. Since consumers with well-developed social preferences are often willing to pay more for a CSR product, unsubstantiated claims may proliferate and cause adverse selection, whereby consumers are 26

not able to distinguish the true from the false CSR products. As a consequence, since producing the former is generally more expensive, the true CSR products will be selected out of the market (as in the market for lemons described by Akerlof, 1970). Labeling is a natural solution to adverse selection. A key distinction between simple communication (the so-called green washing) and labeling is that the latter requires a reputable certification agent whom consumers can trust (Caswell and Mojduszka, 1996). Labels transform credence attributes into search attributes. They favor the emergence of a separating market equilibrium, whereby consumers with social preferences are matched with CSR-firms, and consumers without social preferences are matched with non-CSR firms. Although the literature on labels is mainly theoretical, we present some recent empirical results from laboratory experiments that evaluate the effect of labels on consumers under different label regulation rules. Last, we point several limits to the use of labels, which essentially relate to biases in the consumers perception and treatment of information. This suggests that the proliferation of labels should be avoided, and that labels should be unified and carefully regulated by public authorities The reminder of the paper is organized as follows. Section 2 focuses on consumers social preferences. Section 3 analyzes the information issue, and the role of labels. Section 4 concludes on the role of consumer policies in the development of CSR. The objective of reviewing germinal works on CSR, CA, and CnSR is to obtain a deep and broad understanding of the concepts and their relationships. The following sections include a literature review related to the independent variables and then the dependent variable.

Independent Variable: Corporate Social Responsibility In its evolution, the concept of CSR passed through several stages. Starting with the chronological classification developed by Schwalb and Garca (2003) and integrating new concepts from the literature, it is possible to identify the following stages: germinal, emergent, development, and generalization and audit. Germinal stage.The germinal stage started during the last decades of the 19th century, and an entrepreneurial spirit and the laissez-faire philosophy characterized this stage. During this stage, the terms corporate philanthropy and welfare capitalism emerged. This last concept became the name of the system in which companies provided extensive community facilities


and company programs for their workers (Jacoby, 1997). Little direct regulation of business occurred during this period. Emergent stage. The second stage began with the Great Depression and a focus on managerial values and principles. This was a normative and ethical philosophical period. The emergence of the formal concept of corporate social responsibility (CSR1) characterized this stage. Bowen (1953) defined CSR as comprising the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society (as cited in Wolff & Barth, 2005, p. 6). Bowen clearly emphasized the ethical considerations over the economic ones. Development stage. This stage started in the 1960s. The attention shifted away from theorizing about what was good for society to analysing which demands on business society put forward. The focus was the processes that ensure the capacity of a firm to respond to its environment. This stage had an action-oriented managerial inclination. Social activism and the rise of consumerism; increasing public awareness of environmental and ethical issues; and increasing pressure from environmentalists, consumer advocates, feminists, young people, and civil rights movements characterized this period. During this stage and in the late 1970s, Carroll (1979), working on the founding concept of Bowen (1953), developed a more structured analysis and formulated a four-part definition of CSR, suggesting that companies have four responsibilities: economic, legal, ethical, and philanthropic (or altruistic or humanitarian). Between 1970 and 1990 and parallel to the development of CSR, other concepts began to appear, often tied to environmental subjects such as sustainable development and sustainability. The emergence and evolution of the principles of sustainable development have had an important impact on the concept of CSR, resulting in two significant contributions to the construct: incorporating the environmental variable as one of the main social expectations to be covered and considering sustainability. Essentially, organizations must satisfy not only the expectations of current society but also those of future generations. Moreover, the environmental concern caused CSR to shift away from the theoretical and philosophical level, to a more concrete and practical dimension, the urgent necessity for the firm to respond to its environment. Generalization and audit stage. Between the 1980s and 1990s, the stakeholder theory contributed significantly to the development of CSR. This theory proposes that a firm is a nexus of contracts between stakeholders and that the responsibility of a business is not to 28

society at large but to legitimate stakeholders: shareholders, employees, customers, suppliers, and local communities (Van der Putten, 2005). The impact of the environmental and sustainability discourse initiated in the previous stage and the proposal of concepts, such as the triple bottom line (Elkington, 1999), developed the CSR concept to include the three dimensions of sustainability: social, ecological, and economic bottom line. Despite its long history, the evolution of the concept, and the increasing importance of CSR worldwide, a universally accepted definition of CSR does not exist. Different terms in the literature describe the phenomena related to corporate responsibility in society: corporate social responsibility, corporate citizenship, corporate philanthropy, corporate giving, corporate community involvement, community relations, community affairs, community development, global citizenship, corporate societal marketing, society and business, social issues management, public policy and business, stakeholder management, corporate accountability, and corporate sustainability (Garriga & Mel, 2004; Kotler & Lee, 2005). The criteria of CSR may change between generations and cultures and will be different in Europe (welfare society) and the United States than in developing countries. Previous research indicates that these differences exist because of differences in culture, economic development, legal and political environment, organizational ethical climate, and gender (Juholin, 2004; Lines, 2003; Papasolomou-Doukakis et al., 2005; Singhapakdi & Karande, 2001). The following comprehensive definition for use in the proposed research borrows and integrates elements from these different areas and approaches: CSR involves running a business with an actionoriented managerial strategy under a comprehensive set of policies, practices, and programs integrated throughout the business operations. Decision making includes a voluntary commitment to contribute to sustainable development by making decisions that fairly balance the claims of all key stakeholders, shareholders, employees, customers, suppliers, and local communities. These decisions should maximize the positive impact and minimize the negative effects of the business, while maintaining concern for societys long-term needs in ways that address or exceed the ethical, legal, environmental, commercial, and other wants or expectations of society, with consumers trying to be accountable to society for performance by explaining, justifying, or reporting on their actions.

Independent Variable: Corporate Ability A number of researchers have investigated the degree to which consumers associations regarding a company influence them (Berens, 2004; 29

Berens et al., 2005; Brown & Dacin, 1997; Dacin & Brown, 2002; Sen & Bhattacharya, 2001). In their germinal work, Brown and Dacin (1997) defined corporate associations as a generic label for all the information about a company that a person holds (p. 69). Corporate associations include the following: Perceptions, inferences, and beliefs about a company: a persons knowledge of his or her behaviors with respect to the company; information about the companys prior actions; moods and emotions experienced by the person with respect to the company; and overall and specific evaluations of the company and its perceived attributes. (p. 69) Furthermore, Berens (2004) defined corporate associations as a heterogeneous set of perceptions, which may relate to a wide variety of aspects of a company (p. 17). Berens et al. (2005) remarked that perceptions of individual people, rather than groups of people, define corporate associations. In addition, corporate associations are regarded as a set of perceptions, which may or may not be related to one another, rather than as a holistic picture, and as Brown (1998) pointed out, corporate associations are a heterogeneous set of perceptions, which may be related to a wide variety of aspects of a company. Berens and Van Riel (2004), after developing an overview of the studies on corporate associations of the last five decades, established three main typologies of corporate associations. They include (1) the different social expectations that people have regarding a company, (2) the different personality traits that people attribute to a company, and (3) the different reasons they have to trust or not to trust a company (p. 174). Berens (2004) stated that in terms of the social role typology, two specific types of corporate associations exist: corporate ability (CA) and CSR associations. In their germinal work, Brown and Dacin (1997) introduced and studied these two types of corporate associations as a way to explain the inconsistent results observed in previous studies under the rubric of corporate image. They demonstrated that what consumers know about a company can influence their evaluations of products introduced by the company (p. 68) and that different types of corporate associations (i.e. CA and CSR) can have important (p. 68) but different influences on company and product evaluations. The authors provided participants either with extensive attribute information about new products or information about corporate associations and measured the associations. They found that CA may have a greater impact on both specific product attribute perceptions and the overall corporate evaluation than a reputation for social responsibility (p. 80). However, they also observed that CSR has a positive influence on consumer response to new products. Researchers have begun investigating the conditions 30

under which CA association and CSR association may influence consumers preferences, and in some cases, their results are contradictory. Sen and Bhattacharya (2001) found that the CSR issues addressed by the company, the quality of its products, the consumers personal support for the CSR issues, their general beliefs about CSR, and the consumers perceptions of congruence between their own characters and that of the company in their reactions to its CSR initiatives (p. 225) moderated the effect of CSR on product preferenc es. Moreover, they found that consumers are more sensitive to negative CSR than positive CSR and that the consumers perceptions of the tradeoffs between CSR and CA efforts play a significant role in their final response. Berens (2004) found that the effect of CA association and CSR association on product evaluations and purchase intentions is different depending on the accessibility of the associations, their diagnostic value, and the corporate brand strategy that a company uses. The experimental results of Mohr and Webb (2005) indicated that CSR had an important and positive influence on company evaluation and purchase intent. Their results showed that American consumers reacted more strongly to negative than to positive CSR (p. 139) and that a low price did not appear to compensate for a low level of social responsibility (p. 142). According to Berens et al. (2005), academic researchers, on the influence of corporate associations in consumer response, have found that associations with a companys corporate ability (CA) and its corporate social responsibility (CSR) both influence product evaluations but that CA associations have a stronger effect than CSR associations (p. 35). In contrast, Marin and Ruiz (2007) demonstrated that the contribution of CSR is stronger than CA. The authors suggested that the increasing competition and the decreasing CA-based variation in the marketplace may be responsible for this result. Moreover, they claimed that CA may have become a base line below which companies face great difficulties to stay in the market, and above which companies benefit from competitive advantage in the form of associations obtained from the undertaken CSR activities (p. 255).

Dependent Variable: Consumer Social ResponsibilityA growing body of academic research supports this new corporate global approach. Researchers claim that the business case of CSR includes improved financial performance, reduced operating costs, long-term sustainability of the company, increased staff commitment and involvement, long-term return on 31 investments, enhanced capacity to innovate, enhanced brand value and

reputations,development of closer links with customers, and greater awareness of their needs (Jones, Comfort, Hillier, & Eastwood, 2005). Researchers have investigated the interface between CSR and the customer broadly, and as the literature shows, this is a truly complex matter. Many surveys developed at an international level suggest that a positive relationship exists between a companys CSR actions and consumers reaction to that company and its product (Bhattacharya & Sen, 2004; Sen & Bhattacharya, 2001). A growing body of academic research corroborates and attests to the generally positive influence of CSR on consumers company evaluations and product purchase intentions (Brown & Dacin, 1997; Carrigan et al., 2004; Creyer & Ross, 1997; Maignan, 2001; Schroeder & McEachern, 2005; Uusitalo & Oksanen, 2004). This kind of consumerism mainly incorporates environmental issues but also extends to animal welfare, human rights, and labor working conditions in the third world (Tallontire et al., 2001). The links to consumers positive product and brand valuations, brand choice, and brand recommendations documented the relationship between CSR and consumer attitudes. As a result of the broad literature, Devinney, Auger, et al. (2006) proposed a new concept highlighting the important role that CSR plays in consumer behaviour, consumer social responsibility (CnSR: The conscious and deliberate choice to make certain consumption choices based on personal and moral beliefs (p. 32). This concept has ethical and consumerism components, which can appear as an expressed activity in terms of purchasing or no purchasing behaviour; and as an expressed opinion in surveys or other forms of market research (p. 32). Conversely, recent investigations demonstrate that the relationship between CSR and ethical consumerism is not always direct and evident. The results are in many cases contradictory and establish numerous factors that affect whether a firms CSR activities translate into consumer purchase. They include trade-offs with traditional criteria like price, quality, and convenience and lack of information (Mohr et al., 2001); corporate brand dominance (Berens et al., 2005); and the type of CSR, quality of products, consumers personal support for the CSR issues, and their general beliefs about CSR (Sen & Bhattacharya, 2001). There seems to be a contradiction between what the international polls and surveys established in terms of intentions to buy products with CSR features and the real purchasing of them (Devinney, Auger et al., 2006). Auger et al. (2003) explained that the differences occurred because in the former studies, researchers used surveys to rank the importance of some CSR issues, without any trade-off between traditional features and CSR product features. These types of 32

instrument overstate the relevance of CSR issues because Likert-type scales do not give incentives to answer questions truthfully (Auger & Devinney, 2005, p. 2) and because respondents may want to edit their private judgment before they report it to the researcher, due to reasons of social desirability and self-presentations (p. 6). Hence, these surveys may overstate the importance of social features, since there are clearly more socially acceptable answers (Auger et al., 2006, p. 6). Majority of the private companies say they embrace corporate social responsibility not only because its the right thing to do, but also because it strengthens their brands . The percentage of brand value represented by corporate social responsibility is trending upward but all other identifiable contributors to corporate brand value-advertising, market cap, and the industry in which a company competes appear to be declining. The relationship between brand image and Corporate Social Responsibility is strongest for familiarity, not for favourability. That is, if the company is well known in its community, its Corporate Social Responsibility activities will strengthen its brand image more than they would if the company were less well known. According to a study by financial paper, The Economic Times, donations by listed companies grew 8% during the fiscal ended March 2009. As many as 108 companies donated up to 20% more than the previous year. Consumers increasingly expect companies to make a broader contribution to society. The business benefits of doing are not evident. Prior studies conclude that consumers purchase decisions are positively influenced by socially responsible initiatives. According to the research carried by Cone Inc., in 2009, 79% of consumers would switch to a brand associated with a good cause. Bharat Petroleum and Maruti Udyog came on top with 134 points each, followed by Tata Motors (133) and Hero Honda (131). The study was based on a public goodwill index and India received 119 points in the index against a global average of 100. Thailand was at the top slot with 124 points. Malini Mehra, founder and CEO of Social Markets, an organization that works towards transition to sustainable development and realisation of human rights and social justice, explains, There is minimalist version, Corporate Social Responsibility is little more than a philanthropic activity-tree planting, schools and health clinics. In the maximalist version, Corporate Social Responsibility is about character and conduct, where integrity and responsibility run right through every seam of the firms activities and ethos. External Relations Director Lee Bansil of Procter and Gamble explains: co-donation and cause-related marketing help promote competition, which 33

in turn leads to corporate innovation. He believes this is essential for developing sustainable products and promoting sustainable consumption.

1.3 Research on CSR Relationships

Pivato et al. (2008) investigated the consumer trust and CSR realm, but although hypotheses were developed, the findings are based on other literature and not an empirical study. There is empirical evidence relating to brand and consumer behaviour in reference to CSR such as Becker-Olsen et al. (2006) and Pivato et al. (2008). Specifically relating to brand loyalty and consumer valuation of services, De Los Solmones et al. (2005) conducted a survey to investigate the effect that selected companys socially responsible activities had on the consumers service evaluation. Other research investigates leadership, culture and strategy (Angus-Leppan et al., 2010; Sharp & Zaidman, 2009; Duarte, 2010; Lee, 2009). Strategy relies on leadership for execution and the development of a culture that fosters CSR initiatives. Cruz and Pedrozo (2009) used case studies to investigate green management. Yu, Ting and Wu (2009) investigated greenness of firms directly influencing financial performance in relation to SMEs and large corporations. Sen et al. (2006) had the only field study identified, which explored stakeholder relationships in relation to CSR. There are a number of studies that examine the use of CSR to attract employees and influence levels of organisational commitment. Job seekers found companies with higher CSR involvement more attractive, as it was perceived these companies had greater diversity and employees were more valued (Albinger & Freeman, 2000). Organisational commitment was investigated by Brammer et al. (2007) and Turker (2009), who studied organisational commitment in relation to CSR and commitment levels of employees in CSR orientated organisations respectively. Peloza and Shang (2011) identify several studies investigating CSR in single and diffuse activities involving a range of other subjects such as business practices, philanthropy, products, fit and consumers. Vlachos, Tsmakos, Vrechopaulos and Avramidis (2009) and Castaldo, Perrini, Misani and Tencati (2009) investigated trust, with organisational reputation as a regulating factor, when assigning consumer attributions to brand or company.


In order to test conceptual ideas, empirical investigation is conducted. For this particular study, variables from Turkers (2009) conceptual measurement scale for CSR was used. The Turker (2009) scale was developed from multiple areas including legal, environment, employee and ethics and has been adapted and applied in the data analysis. Turker (2009) conducted empirical research in order to develop a 21 factor variable list, but the scale has not been tested in a wider CSR context. An adaptation of Turkers (2009) scale is used as it provide a multidimensional representation of CSR, which can help determine which dimensions will have an effect on brand trust.

1.4 Stakeholders and Shareholders Relationships with CSR

1.4.1 Stakeholders
Piercy and Lane (2009), De Los Salmones et al. (2005) and Godfrey and Hatch (2006) identify stakeholders as important in relation to CSR. Conceptual theorists have suggested that research into CSR can be made operational, especially to examine marketing benefits of CSR on stakeholder relations (Maignan & Ferrell, 2004). Russo and Perrini (2009) state that social capital explains SMEs approach to CSR more appropriately, where stakeholder theory explains the CSR approach by large organisations. Larger organisations CSR approach can include different individuals as well as consumers. The differences in strategy and ethical considerations between CSR and SMEs are other areas for development. Russo and Perrini (2009) concluded that stakeholder views have a large impact on the decisions of large firms in relation to CSR activities. Similarly, Piercy and Lane (2009) propose the support a company receives from investors and the strength of business relationship are prominent factors in the implementation and success of CSR efforts. According to Pivato et al. (2008), people in authority in business are now recognising CSR as important. Sen, Bhattacharya and Korschun (2006) concluded that CSR influences stakeholders into purchasing brands as well as strengthening the overall relationships. Implementing CSR to foster stakeholder relationships is important, as individual stakeholders such as shareholders and employees may have multiple relationships with the company (Sen et al., 2006). Stakeholders need to be informed of organisational policy or goals, the communication increases stakeholders confidence in the companys actions (Bansel & Roth, 2000). Stakeholders are important to consider in CSR implementation. Walton and Rawlins (2010) 35

25 even suggest using the topics important to stakeholders as a tool to measure CSR such as employee well-being and economic performance.

1.4.2 Shareholders
Sjostrom (2010) suggests that shareholders can provide a benchmark for organisational social activities. In contrast, Arvidsson (2010) suggests that focus has moved from shareholder value to CSR efforts after corporate scandals (i.e. companies employing child labour). Shareholder value can be built by CSR activities giving insurance protection for companies in bad times, meaning the positive reputation, which would foster brand trust and loyalty, can help reduce the bad effect of a negative event (Godfrey et al., 2008). Hsieh (2009) determined that managers should make decisions on the overall happiness of society (through CSR activities), sometimes at the expense of shareholder interests. This idea does not consider shareholders as a main benchmark for CSR as suggested, but simply an addition to the main societal responsibilities of an organisation. Godfrey and Hatch (2006) identified shareholder capitalism for an organisation as negative when considered in relation to the CSR-CFP (corporate financial performance). Shareholder capitalism for an organisational strategy focuses on the manufacture of economic goods to contribute to social welfare and this has a negative effect on the CSR-CFP relationship (Godfrey & Hatch, 2006). The buying of shares and the impact on organisational financial performance can be affected by the activities organisations are involved in. Adam and Shavit (2008) state investments have increased over time in organisations that consider the social needs of the market and operate best practice policies. There is also indication that organisations that are socially responsible can positively change investor attitudes by having a greater social responsibility ranking (Adam & Shavit, 2008). Ranking companies in relation to a social responsibility could motivate organisations to participate in CSR to improve image in the market.

1.5 CSR and Brand Trust

Branding is used to differentiate one product or service from another using a symbol, name or design (Pride et al., 2006, p.208). Branding can be used for customers to identify a product or service, making the introduction of new products into the market easier, whilst building brand equity, or the value a company can leverage off the brand. More importantly whilst 36

branding makes it easier for consumers to identify products, it also makes it easier to develop brand loyalty (Pride et al., 2006, p.209). Although brand loyalty will vary depending on the item and consumer, brand trust is a major component to loyalty; consumers have faith in the product or service they are purchasing. Dunn and Davis (2004) state one of the greatest challenges CEOs can address is managing consumer loyalty effectively. Whether trust can be affected by external actions of the company rather than the performance of the product or service is what this study aims to research. CSR and branding have a number of linkages, specifically through trust, corporate reputation and consumer attribution. Gurhan-Canli and Fries (2009) developed a corporate social responsibility and brand-related outcomes model. Gurhan-Canli and Fries (2009) suggest that both consumer characteristics, such as awareness of CSR programmes and personal judgement and company characteristics such as reputation are factors influencing branding outcomes. The branding outcome would include evaluation of the company, brand and product, in which brand trust would be considered. Fit between the CSR activities and the company and brand itself also impacts on the way consumers perceive the CSR activities (Ellen et al., 2000; Yoon et al., 2006). Delgado-Ballester and Munuera-Aleman (2005) suggest that brand equity can be developed through brand trust. Brand trust must be maintained not only to foster consumer loyalty and brand equity, but to create a sustainable competitive advantage (Delgado-Ballester and Munuera-Aleman, 2005). Consumer Attributions and Corporate Reputations The awareness of CSR in general provides influence on attitude, attribution and purchase decisions (Pomering & Dolcinar, 2009; Ellen at al., 2006; Yoon et al., 2006). Similarly, Maignan (2001) suggests further study to identify at which point consumers are aware of the CSR efforts a company has undertaken. This is associated with leadership ability in the corporation and the need to communicate CSR activities (cause marketing included) while developing an appropriate direction or strategy (Morlin-Azorin et al., 2009; Murillo & Loranzo, 2006). Marin and Ruiz (2007) suggest CSR has direct influence on a companys identity attractiveness; this identity can both attract new consumers and influence marketing


power for that company. Attractiveness is strongly affiliated with the awareness of a specific brand. Peloza and Shang (2011) suggest that product-related CSR means higher levels of consumer awareness. Du, Bhattacharya and Sen (2007) found evidence to suggest that a brand that positions itself as a CSR brand can improve consumer awareness levels, in contrast to a brand that just engages in CSR activities. This may due to the consumer being directly exposed to the CSR information. Bhattacharya and Sen (2004) expressed that CSR activities had greater influence on outcomes internal to a consumer, such as awareness and attributions, which are easier to target than external outcomes such as purchase behaviour. Bhattacharya and Sen (2004) suggest CSR awareness is a stumbling block for most companies, who can only get the benefits from CSR once consumer awareness is increased. De Los Salmones et al. (2005) state the possibility that the perception of CSR influences the valuation of individual services as well as goods, as the concept of perceived quality can apply to both service and goods. Affiliated with consumer awareness, corporate reputation is another area that could be influenced by CSR activities (Yoon et al., 2006; Ellen et al., 2006). Yoon et al. (2006) identified suspicion in consumers as a factor influencing positive or negative attribution to the company. Bhattacharya and Sen (2004) also identified corporate reputation as moderating consumer suspicion. If a company has a good reputation the consumer will act favourably to event sponsorship even if there is not perceived fit between the event and the company. If the consumer suspects the reason for the CSR activity is for an ulterior motive, other than legitimately helping a cause then there will be a negative response. Bhattacharya and Sens (2004) findings imply that consumers are aware of CSR activities and the legitimacy of these activities in relation the company. Likewise, Ellen et al. (2006) states decisions made for CSR activities that display self-centred motives or are for stakeholder benefit can receive negative feelings from consumers, impacting on consumer trust. Kitchin (2003) expresses that the responsibility in CSR is brand responsibility and that it is in fact the brand that has the social responsibility. The brand relies on brand promises and relationship to the stakeholders to convey the CSR efforts. Kitchin (2003) concludes CSR activities are not considered a separate entity from a brand or company, but part of everything the brand does. Brand learning gaps can only be decreased by further cultural 38

understanding into the needs of society on behalf of the companies participating in CSR (Kitchin, 2003). Cultural perspectives in regards to branding and CSR have been explored to a small extent. Little is known about public relations practices and culturally specific CSR to date (Kim & Kim, 2010). Other studies have not considered a cultural approach, this could impact on the brand trust perspectives as different cultures may consider different practices as more trustworthy. Other empirical studies support the relationship between CSR and brand performance. Lai, Chin, Yang and Pai (2010) concluded that both CSR and corporate reputation had a positive effect on brand equity in the industrial sector. The brand equity also included brand loyalty and brand awareness. Brand equity can help adjudicate a relationship between brand performance and CSR. Biloslavo and Trnavcevic (2009) suggest using websites to communicate green corporate identity. In each case of 20 Slovene companies, green reputation was used in an attempt to create a lasting competitive advantage. All the companies presented information about social responsibility through green messages and supporting the environment, but it did not translate to a distinct advantage for each company such as consumers purchasing more products (Biloslavo & Trnavcevic, 2009). Websites that communicate green messages and convey corporate social responsibility need to be combined with activities that consumers can see, thus reducing the amount of scepticism from the consumer. 34 Curras-Perez et al. (2009) state that CSR helps construct a brand with personality that can be differentiated by consumers, while fulfilling their needs. However, effectiveness of CSR can often be hard to measure (Pivato et al., 2008). CSR activities are mainly associated and compared to financial gains. Godfrey and Hatch (2006) identified extensions beyond profit for CSR activities, but there are has not been any empirical evidence to date. This study plans to add exploratory empirical evidence to the CSR and branding relationship. De Los Salmones et al. (2005) concluded although social responsibility has become popular in recent years, there have been few studies conducted towards CSR in reference to consumer behaviour and attitudes. Maignan, Ferrell and Hult (1999) suggest CSR has general positive consequences for business, but there is limited research on the impact from a marketing 39

perspective. In terms of how, when and for which specific consumers CSR initiatives work best, there are scarce studies (Sen & Bhattacharya, 2001). There is however a few studies exploring the connections between CSR and corporate reputation and reputation can provide an influence on brand trust. The relationship between reputation and brand trust is explored in the next section.

1.6 Initiatives of Indian companies to promote brand image with the help of corporate social responsibility
The 2010 list of Forbes Asias 48 heroes of Philanthropy contains four Indians. Nearly all leading corporate in India are involved in Corporate Social Responsibility programmes in areas like education, health, livelihood creation, skill development and empowerment of weaker sections of society. Notable efforts have come from the Tata Group, Infosys, Bharti Enterprises, ITC Welcome group, IOC among others. For brands, it is an excellent way to show they care, taking the lead with innovative giving back schemes. Few ways by which Procter and Gamble did in the past was, that they teamed up with UNICEF to introduce Nutristar-a powdered drinking product that addressed micronutrient malnutrition in some populations and by acquiring the PuR brand to bring low-cost water purification technologies to consumers in developing markets. The company also promoted better hygiene in at-risk communities and in return had the benefit of forming new markets for its products like soap and toothpastes. A recent initiative of Corporate Social Responsibility by Procter and Gamble is that it joined hands with the International Olympic Committee (IOC) jointly announced a sponsorship scheme wherein Procter and Gambles portfolio of brands will sponsor Proud Sponsor of Moms campaign globally. To celebrate the dedication and sacrifices of moms, families and Olympians, Procter and Gamble will produce a documentary video series called Raising an Olympian that will provide the insight into the experiences of mom of an Olympian which will guide and improve the lives of forthcoming athletes. Mr.Sunil Mittal, chairman and managing director of Bharti Enterprises, runs the country's largest affirmative action project imparting quality education to 30,000 underprivileged children in rural India across five states. The initiative is housed under the Bharti Foundation. Idea is a telecom service provider, which historically lacked the market leaders in terms of 40

performance. With its new campaign, which sets the tagline, What an idea in the landscape of rural India, it has managed to become a stronger and more credible player. The advertising focuses on stories that demonstrate how the mobile phone helps education and democracy to rural India, not to mention solving the caste problem. Another instance is that of a leading tea brand from Indias most respected business house, Tatas. Tata Tea uses the tag line Jaago re (wake up) and its advertising shows its protagonists handing out cups of tea to young people in college insisting that they are asleep and need to wake up. The waking up in question involves their going out and voting. In this case, the advertising leads us to a website which actually allows people to register on-line as voters. Corporate companies like ITC have made farmer development a vital part of its business strategy, and made major efforts to improve the livelihood standards of the rural communities. Unilever is using micro enterprises to strategically augment the penetration of consumer products in rural markets. IT companies like TCS and WIPRO have developed software to help teachers and children in schools across India to further the cause of education. The adult literacy software has been a significant factor in reducing illiteracy in remote communities. Banks and insurance companies are targeting migrant labourers and street vendors to help them through micro credits and related schemes. As in the West, Indian companies are also waking up to the realization that Corporate Social Responsibility is not just an external philanthropic activity, but an internal responsibility as well. In fact, as Paul Abhram, COO, Induslnd Bank, puts it, If you dont start from within, the entire Corporate Social Responsibility program would turn out to be meaningless. The concept of solar ATMs and encouraging customers to choose e-statements over traditional paper statements has been a part of Induslnd Banks broader Corporate Social Responsibility initiatives.








responsibility among companies

Although corporate India is involved in Corporate Social Responsibility activities, the central government is working on a framework for quantifying the Corporate Social Responsibility initiatives of companies to promote them further. According to Minister of Corporate Affairs, Mr.Salman Khurshid, one of the ways to attract companies towards Corporate Social 41

Responsibility work is to develop a system of Corporate Social Responsibility credits, similar to the system of carbon credits which are given to companies for green initiatives. Pharmaceuticals Company Jubilant Organosys Ltd., already runs an anti-tuberculosis programme with the government of Uttar Pardesh. Apart from schools and hospitals that are run by trusts and societies, the government too is exploring to widen the scope of publicprivate partnerships to build and maintain schools and hospitals in return for a fixed annuity payment.Besides the private sector, the government is also ensuring that the public sector companies participate actively in Corporate Social Responsibility initiatives. The Department of Public Enterprises (DPE) has prepared guidelines for central public sector enterprises to take up important Corporate Social Responsibility projects to be funded by 2-5 per cent of the companys net profits.


Chapter 2: Analysis and findings of data collected from consumers
The findings are based on the questionnaire which was circulated online to consumers through various websites viz. Facebook, Gmail, Linked In etc. the below are given the findings. The Fig. 1 is the preference of consumers they exhibit in buying stationery products, the total brands mentioned in the questionnaire were 5 viz. Apsara, Kores, Camlin, Navneet, Classmate and Faber castell. The ranking of the brands is in terms of percentage.

Ranking of Brands
40 35 30 25 20 15 10 5 0 Series1 Apsara 18.987 Kores 8.86 Camlin 15.189 Navneet 4.43 Classma te 35.443 Faber Castell 17.088 Series1

Figure 1

The figure 1 depicts that consumers rank Classmate as number 1 stationery brand followed by Apsara and Faber Castell. The ranking depicts the overall buyer behaviour towards the Classmate. The question asked for this question was ranking the brands on a scale of five, where 1 stood for the most preferred and 5 stood for least preferred and out of the brands shown in the figure Classmate got most of the 1s and 2s and the overall percentage of getting most preferred rank is 35.443% which is quite high comparing it to the other competitor brands. Classmate is followed by Apsara and Faber Castell with 18.987% and 17.088% respectively.


Recall Percentage: As recall at the time plays a very important role from companys point of view the recall percentage of Classmates lets put India first initiative is given in the Fig2

Recall Percentage
80 60 40 20 0 Series1
Figure 2


Yes 75

No 25

The figure 2 depicts the responses in the form of Yes and No, 75% of the respondents were aware of the scheme and 25% did not know about the scheme. The awareness is the basis for preference, and as established by responses, the awareness of Classmate CSR is modest. Since awareness is one of the most important factors in the buyers purchase process. Only 25% of the respondents were not aware of the CSR efforts of Classmate. Preference for Classmate due to its CSR initiatives

Preferece for Classmate

80 60 40 20 0 Series1
Figure 3


Yes 75

No 25

The figure 3 depicts the responses collected in the form of Yes and No, the question asked is whether the CSR efforts of Classmate leads them to prefer it over the companies not doing CSR. The figure depicts 75% of the total respondents showed a positive response which is exactly equal to the percentage of respondents who are aware of the CSR efforts of Classmate. 44

Attention towards CSR: The attention towards the CSR activities as per the responses is given in the figure4, the responses are below:

Attention towards CSR

45 40 35 30 25 20 15 10 5 0


Strongly agree 18

Agree 25

Neutral 40

Disagree 10

Strongly disagree 7

Figure 4

The figure 4 depicts the percentage of people who pay close attention to the CSR initiatives and as per the responses collected 40% are neutral to this and 18% and 25% strongly agree and agree respectively. Relatively only a small percentage of consumers do not pay attention to the CSR efforts. A good percentage of people are neutral to it which may be taken as an opportunity as the interest among consumers can be generated by efforts by any company. Readiness for Premium Price:

Readiness to pay premium price

30 25 20 15 10 5 0 Series1
Figure 5


Strongly agree 16




Strongly disagree 9

The question was intended to know the readiness of people towards paying premium price and the results in the sample depict that 29% are neutral towards it, 27% are ready to pay a premium price and 16% are strongly ready to pay premium price. The premium price is the extra price that consumers pay to help less privileged or any other cause. 45

Deliberate buying of Classmate due to CSR:

Deliberate purchase of Classmate

30 25 20 15 10 5 Series1

Figure 6

Strongly agree 16

Agree 27

Neutral 29

Disagree 19

Strongly disagree 9

Deliberate purchase of Classmate refers to the tendency of consumers to buy Classmate stationery because of its social initiatives. The deliberate purchase means a consumer prefers to buy Classmate even if the options are available and it may be assumed at a lower price. Since Classmate stationery is comparatively following high pricing consumers still dont mind paying high price. Recommendation to others:

Recommendation to others
30 20 10 0 Series1 Series1

Strongly agree 21

Agree 30

Neutral 24

Disagree 15

Strongly disagree 10

Figure 7

The recommendation refers to adverting others to buy a particular product or service here it refers to Classmate, as recommendation is a form of communication that is quite powerful that works for the benefit of a company. A high percentage of respondents agreed that they refer people to buy classmate which is a good sign, recommendation may be assumed to be 46

equivalent to referral thus it needs to be understood to help consumers to refer others in the benefit of the company. Sense of fulfilment:

Sense of fulfilment

45 40 35 30 25 20 15 10 5 0 Series1 Series1

Strongly agree 20

Agree 41

Neutral 17

Disagree 16

Strongly disagree 6

Figure 8

The sense of fulfilment has a very modest role to play in shaping the consumer behaviour precisely speaking consumer preference. As the sense of fulfilment is a psychological process that satiates a consumer need which ultimately leads to extra satisfaction that a consumer gets on buying a product as a by-product. The contribution of Classmate for the purpose of education for less privileged on sale of every product leads to a sense of fulfilment in the consumers which is depicted in the (figure 8) 61% believe that it is a source of fulfilment for them, on the other hand lesser percentage is against the statement. 47

Helping our country in pursuit towards development:

40 35 30 25 Series1 20 15 10 5 0 Series1

Strongly agree 17

Agree 37

Neutral 24

Disagree 11

Strongly disagree 11

Figure 9

Since our country has been aspiring to be tagged developed in the immediate future and it has been striving hard to achieve the same status but we are ranked low on the literacy and this path breaking struggle has been joined by many corporate players including ITC, the notion behind this question was to understand the level of agreement of people towards the initiative being undertaken by Classmate, whether they appreciate its effort towards the same or not and according to the figure 9 a good percentage of 51% respondents agreed and 22% disagreed. Thus overall respondents have shown a positive and favourable response for the effort.


Company giving back to society:

Company giving back to society

35 30 25 20 15 10 5 0 Series1
Figure 10


Strongly agree 20

Agree 33

Neutral 26

Disagree 16

Strongly disagree 5

In modern times companies are anticipated to give back to the society as every individual in a society is supposed to. Classmate is also trying to give back to the society and it remains a question how well is it taken by the society. As per the findings figure 10, 53% agree that the Classmate (ITC) is trying to give back to the society in the form of education for poor. Interestingly 26% are neutral and 21% disagree. Advertising and publicity purposes: Since there is a rich segment of people who believe that CSR is just a marketing gimmick that companies play to attract attention and publicity. For the same reason this question was asked to know the response of consumers towards the CSR efforts of ITC and the results are represented in figure 11 below, 43% say they do it for advertising purposes which is quite high and only 26% of respondents have declined the statement, thus it should be noted that there is a low percentage who deny it is a marketing ploy.

Advertising and Publicity Purposes

35 30 25 20 15 10 5 0


Figure 11

Strongly agree 15

Agree 28

Neutral 31

Disagree 18

Strongly disagree 8


2.1 Consumers opinion on the other CSR activities undertaken by companies

Many questions were asked to collect the responses to know how strongly consumers feel about the other initiatives undertaken by other companies as their CSR. The other initiatives mostly undertaken by companies excluding education for less privileged are listed as under: Save environment initiatives Public health and hygiene Women empowerment Rural development

1. The education for poor got the below responses.

Education for poor



Most important

Neutral Not important Least important

Figure 12

2. Save environment initiative

Save environment initiative

10 8 25 20
Most important Important


Neutral Not important Least important

Figure 13


3. Public health and hygiene

Public health and hygiene

15 6 20

27 32

Most important Important Neutral Not important Least important

Figure 14

4. Women empowerment

Women empowerment
10 7 28
Most important

23 32


Not important Least important

Figure 15

5. Rural development

Rural development
13 3 23 21 40
Most important Important Neutral Not important Least important

Figure 16

The above is given the consumers view of various initiatives undertaken by companies, as it can be easily depicted from the figures above that the consumers do feel strongly about all the initiatives above. Now among all the initiatives the initiatives that are given more weightage are rural development and education for less privileged with 61% and 60% respectively. 51

The findings of the above pie charts can be summarised as below it is the summarisation of pie charts to find the initiative that is most favoured by the consumers. All the above initiatives are need of the hour in our country and may be taken seriously and in good spirit by all the stake holders and the most among stakeholders i.e; society.

The most desired CSR by the consumers

61 60 59 58 57 56 55 54 53 52 Series1

Figure 17

The figure 17 depicts that all the five initiatives are felt strongly about by consumers and among them the most preferred and desired one is rural development followed by education for less privileged, followed by public health and hygiene. Education for less privileged is very much supported by the consumers, which is quite a good sign for ITC. If we look at the analysis above all the initiatives are quite relevant in Indian context as we are aspiring to achieve growth, development and sustainability all of the above can pave way for the betterment of India as a country. So the companies can look about all the options available and try to look for the initiative that is strongly felt by the consumers.


Characteristics of sample
On the basis of demographic factors the sample characteristics can be summed up as: 1. Gender

23 77
Male Female

Figure 18

The 77 are males and 23 are females. 2. Age

15 8

15-20 20-25


more than 25

Figure 19

The age-wise composition of the sample is as follows: 15-20 are 8 respondents, 20-25 are 77 respondents and 15 respondents are more than 25 years old. 3. Occupation
3 6 33 58


Businessman Employee Student Others

Figure 20


58 students, 33 employees, 6 businessmen and 3 others.

4. Monthly income:

Monthly Income
<15000 32 47 12 9 15000-20000 20000-25000 More than 25000

Figure 21

The figure 20 depicts that 47% of the population under study have < Rs 15000 monthly income, 32% have more than Rs. 25000 monthly income and 12% have monthly income 20000-25000 rs 5. Educational level:

Education Level

3 27

Matriculation Post Graduation Secondary School 3


Figure 22

The figure 21 depicts that 67% are post graduates, 27% are graduates, 3% have matriculated and 5% have secondary level of education. 54

Chapter 3: Responses of retailers

RETAILERS: Since there were 2 questionnaires administered one for the consumers and one for retailers, the findings ahead are the result of data collected from retailers. Time of association:

Time of association
Less than 1 year

1-4 Years Series1 5-9 Years

10 Years 0
Figure 23




Time of association refers to the time a retailer has worked with ITC. Since the Classmate is not a very old brand but a young one started in year 2003. The results were found as follows the time of association of the retailers with classmate, 15% have been associated for 1-4 years, 5% have been associated with ITC for more a decade or more, 5% are associated for 59 years and 5% are associated for less than a year. This means recently more retailers have joined with them and only 16.66% have been associated with them since the brand was started. Familiarity and dealing with ITC products: The ITC has a rich range of stationery products, and all the products are related to stationery. All the stationery products are not under the same brand name of Classmate rather there are more brands in the portfolio. The familiarity refers to the awareness and stocking of the products mentioned in the figure. The findings are as follows: The 30%(9/30*100) are familiar with Paper Kraft highlighters and markers, 33.33% are classmate notebooks, 13.33% say they are familiar and deal with all the products,1 3.33% say they are familiar with Classmate Math instruments,6.66% say they are familiar with Classmate writing instruments and 6.67% say they are familiar with Paper Kraft paper stationery. Refer to figure number 23 on the following page. 55

Familarity with ITC products

12 10 8 6 4 2 0 Classmate Notebooks


Classmate Math Instrument

Classmate writing instrument

Paper Kraft Paper Stationary

Paper Kraft Highlighters and Markers

All of the above

Figure 24


18 16 14 12 10 8 6 4 2 0 Series1


Very Good




Very Poor

Figure 25

The question was intended to know the perception of quality and the rating of it as compared to competitors. The overall results show Classmate has a very good response on the dimension of quality, the quality is perceived to be very good. The figure 24 depicts the rating by retailers of Classmate products on quality parameter, 56.66% of retailers rate it as very good, 20% rate it as good, 13.33% rate it as neutral, 6.66% rate it as poor and 3.335 rate it as very poor. 56

Sales performance:

10 9 8 7 6 5 4 3 2 1 0 Series1
Figure 26

Sales performance


Very Good 1

Good 8

Neutral 9

Poor 3

Very Poor 9

Sales performance was intended to measure the performance of Classmate in the market, there is a very high number of retailers who have ranked the sales performance of Classmate as very poor, a total of 9 has rated it as good and against which 12% are of the negative view. Figure depicts the rating of sales performance by retailers 30% rate it as neutral,26.66% rate it as good, 3.33% rate it as very good and 30% rate it as very poor and 1% rate it as poor, Promotional schemes:

Promotional schemes
10 9 8 7 6 5 4 3 2 1 0 Series1
Figure 27


Very Good 5

Good 5

Neutral 9

Poor 6

Very Poor 5

Promotional schemes are important for the retailers as it helps them sell off products easily, the retailers are mostly very much conscious of promotional schemes as they want to ensure the quick movement of products. The figure 26% presents interesting results with 33% satisfied with the present promotional schemes and 36% showed the negative response and 30% were neutral with the same. 57

Ranking on the basis of monthly sales:

Ranking on the basis of monthly sales

8 6 4 2 0 Series1 Apsara 6 Kores 4 Camlin 1 Navneet 10 Classmat e 8 Faber Castle 5 Series1

Figure 28

The most number of retailers have ranked Navneet as the highest selling brand followed by Classmate. Navneet follows competitive prices which may have led it to take a lead in this regard.The figure 27 depicts that 33.33% indicate Navneet as highest selling, 26.67% indicate Classmate as highest selling, and 20% indicate Apsara as highest selling stationery brand.


3.1 These below are the responses by retailers on rating the ITC( CLASSMATE) as supplier. Margins:

12 10

6 4 2 0 Series1
Figure 29


Very Good 6

Good 11

Neutral 5

Bad 2

Very Bad 6

The margins are available to retailers on the sale of the products. The figure 28 depicts that 36.67% rate Classmate as good supplier on the basis of margins, 16.67% rate classmate as very good, 20% rate it as very poor on the dimension of margins. Shelf arrangement Shelf arrangement refers to the asistance in attaning the product visibilty, the product visibility is very important from manufatureres point of view. The findings are summarised

Shelf arrangement
8 6 4 2 0 Series1
Figure 30

Series1 Very Good 8 Good 6 Neutral 5 Bad 6 Very Bad 5

The figure 29 depicts 26.66% rate classmate as very good on this parameter, 20% rate it as good, 16.67% rate it as neutral, 20% rate it as bad and 16.67% rate them as very bad.



10 8 6 Series1 4 2 0 Series1
Figure 31

Very Good 3

Good 10

Neutral 5

Bad 6

Very Bad 6

Service is an important component, the figure 30 depicts that 33.33% rate classmate as good in this respect, 20% rate them as very bad, 20% rate them as very bad, 16.67% rate them as neutral and 1% rate them as very good on this parameter. The service of classmate has tobe improved because there is a almost 50-50 parity. Promotion:

10 8 6 4 2 0
Figure 32


Very Good 3

Good 5

Neutral 9

Bad 7

Very Bad 6

On the basis of promotion the respondents have rated Classmate good, the question referred to rate classmate on the scale of 5 for the same. The figure 31 depicts that rate them 16.67% as good,10% very good, 30% neutral on this parameter and 23.33 % rate them as bad,20% rate them as very bad in this regard.


3.1 This section deals with the incentive they feel they get in being associated with classmate, the factors for this are discussed ahead and presented in pie charts with relevant heading and findings. The incentive that have been considered for the retailers are given as below: As the CSR should have some good cause in the backdrop and it should be communicated to people how well a particular company is working for it. The achievements should be taken to limelight so that consumers as well as other stakeholders build a trust towards the company for helping or taking some initiatives. 1. Feeling of change:

Feeling of change in the society

10 8 6 4 2 0 Series1

Strongly Agree

Figure 33

Some what agree 3

Neither Some Strongly agree or what Disagree Disagree disagree 8 7 2

The feeling of change refers to the real things that are achieved by the company and how substantial they are. The question is intended to know whether the initiative taken by classmate is taken seriously or not. As per the findings the figure 32 depicts that 33.33% strongly feel they are bringing about a change in the society, 10% say they somewhat agree that they are bringing a change in the society, 26.67% feel neutral about it, 23.33% somewhat disagree and 6.67% strongly disagree. 2. Interested in offering help:

Interested in offering help

12 10 8 6 4 2 0 Series1 Strongly Agree Some what agree Neither agree or Disagree Some what disagree Strongly Disagree

Figure 34


Being interested in offering help means whether the retailer has a sense of offering help to others and is it the return they are looking for buying selling Classmate. The results from the 61

respondents as shown in figure 33 depict that 23.33% agree with the statement, 43.33% do not agree that they are interested in offering help. 3. Sense of responsibility:

Sense of responsibility
10 5 0

Series1 Strongly Agree 6 Some what agree 7 Neither agree or Disagree 9 Some what disagree 5 Strongly Disagree 3


Figure 35

The sense of responsibility refers to whether the retailer feels he/she is fulfilling or performing the duty that is to be performed by him/her. The figure 34 depicts that 20% strongly agree, 23.34% agree, 30% neither agree nor disagree, 16.67% somewhat disagree and 10% strongly disagree. 4. Profit margins

Profit margins
12 10 8 6 4 2 0


Strongly Agree 6

Figure 36

Some what agree 4

Neither agree or Disagree 12

Some what disagree 5

Strongly Disagree 3

Profit margins are on the most important incentives that a retailer gets by selling a particular companys product and service. This is one of the most important factors that determine retailers actual incentive need. The figure 35 depicts 20% strongly agree, 13.33% somewhat agree, 40% neither agree nor disagree,16.67% somewhat disagree, 10% strongly disagree that they are associated with Classmate for the matter of profits. 62

5. Overall performance of the campaign:


6 Series1 5


Excellent 6

Good 7

Neutral 9

Bad 7

Very bad 1

Figure 37

The overall performance in the eye of retailers, it shows how well people believe that the campaign is helping the society, it should be noted that the retailers are the respondents in this data. The figure 36 depicts that 30% rate it as neutral, 23.33% rate it as good, 20% rate it as very good and 23.33% rate it bad. Only 3.34% rate it as very bad.


Stake in the scheme:



15 Series1


0 Yes No

Figure 38

The stake in the scheme refers whether retailers are also directly or indirectly helping for the cause. The question was intended to know in the form of Yes and No responses. Overall if we see 83.34% said they dont have a stake in the scheme and the rest are supposed to have some stake in it.


Interaction with consumers:

Awareness among consumers

14 12 10 8 6 4 2 0 Series1 Series1

Well Aware 2

Aware 5

Neutral 6

Unaware 3

Totally unaware 14

Figure 39

The consumers usually have an interaction with the traditional stationery store keeper before buying anything. As per the data collected the retailers believe only 6.66% of consumers are well aware about the scheme as observed 16.66% are aware, 20% are neutral, 10% are unaware and 46.66% are totally unaware. This figure depicts the observation of retailers whether the consumers are aware of the scheme let us put India first at the time of buying while they are interacting with the consumers. As per the responses of retailers there is a low awareness among consumers of the social initiatives.


3.2: REGRESSION ANALYSIS 4.1 The present study aims to depict a relationship between consumer preference and the CSR efforts of companies. Regression was the most suitable tool to be used for understanding the same. Regression analysis measures the strength of a relationship between a variable we try to explain (consumer preference) and one or more explaining variables (attention, premium price, sense of fulfilment etc.). The results of regression analysis in SPSS are as follows:
Table 1

Model Summary

Model 1

R Square

Adjusted R Square

Std. Error of the Estimate





a. Predictors: (Constant), Giving back to Society, Pay premium price, Recommend others, Attention, sense of fulfilment , Helps country, Deliberate purchase In statistics, the coefficient of determination, denotes R2 and pronounced R squared, is used in the context of statistical models whose main purpose is the prediction of future outcomes on the basis of other related information. R2 is most often seen as a number between 0 and 1, used to describe how well a regression line fits a set of data. An R2 near 1 indicates that a regression line fits the data well, while an R2 close to 0 indicates a regression line does not fit the data very well. It is the proportion of variability in a data set that is accounted for by the statistical model. It provides a measure of how well future outcomes are likely to be predicted by the model. The present research has a R2 = 0.082 which is equal to 8.32%, that means 8.32% of the variation in the dependent variable is explained by the independent variables. The value is less, may be due to the smaller sample size but still it is not zero which means that the model explains the variation in the model. 66

Table 2

Coefficientsa Unstandardized Coefficients Model 1 (Constant) Attention Pay premium price Deliberate purchase Recommend others Sense of fulfilment Helps country Giving Society back to B 1.023 .077 -.049 .068 .021 .006 -.056 .026 Std. Error .149 .048 .048 .056 .051 .057 .055 .050 .194 Standardized Coefficients Beta t 6.869 1.619 Sig. .000 .109 .032 .029 .017 .048 .031 .024

-.132 -1.016 .188 .060 .016 1.210 .417 .103

-.153 -1.018 .066 .512

a. Dependent Variable: Preference There is a relationship between CSR and following factors by the respective magnitude as shown in the figure below, the coefficients are represented by their respective percentages. Therefore alternative hypothesis is accepted which is: There exists a direct relationship between dependent (preference) and independent variables.
Table 3

ANOVAb Model 1 Regression Residual Total Sum of Squares 1.584 17.656 19.240 df 7 92 99 Mean Square .226 .192 F 1.179 Sig. .035 a

a. Predictors: (Constant), Giving back to Society, Pay premium price, Recommend others, Attention, sense of fulfilment, Helps country, Deliberate purchase b. Dependent Variable: Preference


This means the significance level of the overall regression model is less than 0.05 so it comes under the acceptance region. So our regression model is valid and variance of dependent variable (Preference) is explained by independent variables. Readiness for Premium Price:

Readiness to pay premium price

30 25 20 15 10 5



Strongly agree 16

Agree 27

Neutral 29

Disagree 19

Strongly disagree 9

Figure 40

The question was intended to know the readiness of people towards paying premium price and the results in the sample depict that 29% are neutral towards it, 43% are ready to pay a premium price. Therefore, alternative hypothesis is accepted i.e. there exists a direct relationship between CSR and the willingness to pay a premium price.


Chapter 4: Summary of findings

The findings are as follows: CONSUMERS QUESTIONNAIRE Since memorability and awareness of companies CSR efforts is very important and crucial, it was found that out of 100 consumers 75% of them were very aware of the efforts of Classmate (ITC) and they could recall it which is a modest percentage. The preference of classmate over other stationery brands is exhibited by 75% of consumers which may be associated with the recall of the CSR effort of Classmate. The attention is paid by consumers towards the consumers, 43% agreed that they pay close attention to these efforts. The readiness to pay higher price was quite seen as 43% of the respondents said they are willing to pay premium price. Deliberate buy is exhibited by consumers, 53% agreed they deliberately buy classmate because the company is helping the less privileged People recommend the brand to other consumers and 51% of the total respondents agreed on this. The sense of fulfilment was found to be one of the most significant factors and 61% agreed that it brings about a sense of fulfilment to them. 54% of the sample population agreed that Classmate is helping India in pursuit towards development. 53% agreed that Classmate is giving back to the society through the initiative. 43% of the sample population said that the company does it for advertising and publicity purposes. 58% respondents said they feel strongly about initiatives like the classmates effort, the other initiatives refer to save environment initiatives, public health and hygiene, women empowerment, rural development.

RETAILERS QUESTIONNAIRE 56.66 of retailers said the classmate stationery is of good quality 30% of retailers rate sales promotion of classmate as good 20% of retailers rate classmate as poor for margins 40% of retailers rate classmate as bad on service factor Retailers quite contrary to awareness depicted in consumers responses, only 11% of retailers said that the consumers are aware of CSR efforts of Classmate. A very low percentage of retailers have a stake in the scheme. The overall rating of the scheme of lets put India first is 43.33% of the retailers rated the scheme as good and very good, interestingly 30% were neutral to it. And only 8% declined it be good.


FINDINGS THROUGH REGRESSION ANALYSIS: In regression analysis a direct relationship was found, therefore there exists a relationship between CSR and consumer preference. The factors that play an important role in consumer preference are given below in order of their effect on consumer preference; the interpretations are based on the coefficients as found in the regression analysis. Attention: at the time of purchase, a direct relationship means consumers pay attention at the time of purchase, this is really an important factor offering both opportunities and challenges because attracting attention is quite difficult at the time of purchase. Deliberate purchase due to the CSR initiatives: Consumers deliberately buy Classmate because of it social initiative and a direct positive relationship has been established from the regression model in the present research. The inverse relationship has been observed between the dependent variable (consumer preference) and factors (contribution towards development of country, premium price). The consumer preference was found to be inversely related to the factor that it helps our country in the pursuit towards development. In addition to that an inverse relationship has been found between premium price and the consumer preference which means consumers dont want to pay anything extra for the causes they work for. It may be closely related to the fact that CSR is thought to be a duty of every company , among the companies only a few perform it which leads to their preference over the companies not doing CSR. The notion of giving back to society is evident from the regression model as it is positively related to consumer preference. Sense of fulfilment is also positively related to the consumer preference but it exhibits a weak relationship to the dependent variable (consumer preference).


CHAPTER 5: Conclusions and Suggestions

The present research report supports previous research results reported in the literature, suggesting that a substantial, viable, and identifiable market segment exists there that considers a companys level of social responsibility in the business. The research presents an elaborate and explained study of consumer preference and corporate social responsibility. It should be noted that the results are favouring the literature that CSR has a direct relationship with the consumer preference. Additionally some important factors that play more important role in the preference are attention and awareness. The awareness is the very base for building preference as concluded by most of researchers and its implication in the determination of preference has been proved to be true. The awareness is not lone factor that leads to consumer preference rather a closely related factor has been also found to be quite useful in this regard, the attention at the time of purchase. The awareness though is very important but attention at the time of purchase proves to be more influential as a consumer is quite emotionally touched in case he has never come to know about the same. Also paying high premium price has not been approved quite viable as per the present research, the regression coefficients have been found negative for it which proves that consumers dont want to pay higher price rather they think it to be a duty on part of the companies and prefer the one doing it because only a few companies have initiatives supporting social causes. Also the consumers dont believe that it is helping our country a long way in pursuit of the development. Thus it can be concluded that CSR initiatives are being taken quite usefully from Companys point of view, so more and more CSR efforts should be encouraged. As it is not only the consumers who look at the issue in this way, there are also more stakeholders mostly external who take it quite positively. The following are the arguments in favour of CSR: Changed public expectations: one of the most potent arguments for social responsibility is that public expectations from business have changed. It is reasoned that the institution of business exists only because it satisfies the valuable needs of society. Society gives business its charter to exist, and the charter can be amended or revoked at any time that the business fails to live up to societys needs and give the society it wants. Balanced responsibility with power: the businesss responsibility should be more related to its power. It is reasoned that businesses has vast amounts of social power. They do affect the economy, minorities and other social problems. In turn, an equal amount social responsibility is required to match their social power. 71

Business has the resources: the business has a vast pool of resources in terms of men, talents, functional expertise, and deep pockets. Probably, business is without peers in respect of the resources it possesses. Thus CSR initiatives have a bearing in the determination of consumer preference. The present research findings are quite incredible which may be quite useful to the companies in respect of their efforts to foster preference of their products over other competitors. The ultimate goal should be the benefit to society and benefit to the organisation as well because there are academicians who argue that the business of business is only business, so there has to be a synthesis to bring about an emergent approach to the issue to create an impact that is positive to the corporate citizenship of a company and also the image. As per the findings of the present research I would like to make some recommendations which are listed as below: The attention at the time of purchase has been found quite important so companies should try to make their effort visible to consumers so that it flashes in the mind of a consumer before purchasing. The awareness among consumers cannot be ignored at any cost, there has to be a proper communication strategy to create awareness. There can be some methods through which a customer recommends other customers to by a product as recommendation has been found quite important. Though sense of fulfilment has been found to have a weak relationship but it cannot be ignored, thus advertisement should be done in a manner that tries to convey the sense of fulfilment that one gets by contributing to the society. The notion that CSR efforts help a country towards development has not been found true among the consumers rather an inverse relationship has been found for the same. The company involved in CSR is perceived as giving back to the society, which strengthens the fact that companies are a individuals in a society and their efforts are taken quite positively.


Bibliography BOOKS: 1. Philip Kotler, Keller,Koshy & M. Jha, 2010, Marketing Management, Pearson Education 2. Araa, J., & Len, C. (2005a). Consumers valuation of corporate social responsibility:
A stated preference approach. Unpublished manuscript,University of Las Palmas de Gran Canaria, Canarias, Spain.

3. Bhattacharya, C., & Sen, S. (2003). Consumer-company identification: A frameworkfor

understanding consumers relationships with companies. Journal of Marketing, 67(2), 7688.

4. Philip Kotler, Nancy Lee, 2003, Corporate Social Responsibility: Doing the Most Good
for Your Company and Your Cause, Prentice Hall. 5. Etile Fabrice, Teysssier Sabrina (2011), Corporate Social Responsibilityand the Economics of Consumer Social Responsibility, research paper, University of Carolina.

WEBSITES: 1. British Academy of Management CSRIG February 2013 58748070E3 2. Corporate Social Responsibility Wikipedia, November 2012, 3. Corporate Social Responsibility in sustainable business Levit Core, SustainAbility December 2012 REPORTS: 1. Venkatesh, V., Morris, M.G., Ackerman, P.L. (2000), A longitudinal field investigation of gender differences in individual technology adoption decisionmaking processes, Organizational Behaviour and Human Decision Processes. 2. Mano, Haim and Oliver, Richard, L. (1993), "Assessing the dimensionality and structure ofthe consumption experience: Evaluation, feeling, and satisfaction", Journal of Consumer Research, 20 (December).


APPENDIX: Questionnaire used for collection of responses from retailers.

Qno.1 How long have you been selling Classmate stationery? a) b) c) d) 10 years 5-9 years 1-5 years Less than 1 year

Qno.2 Which of the following products are you familiar with and also deal in? a) b) c) d) e) f) Classmate Notebooks Classmate Math instruments Classmate Writing instruments Paper Kraft Paper stationery Paper Kraft Highlighters and markers All of the above

Qno.3 Please rank the Classmate products on the following scale. (5 = very good, 1= very bad)
Parameters Quality Sales performance Promotional schemes 1(very good) 2 3 4 5(very poor)

Qno.4 Rank the following brands in terms of their monthly sales for school stationery.
Lo w selli ng 2 3 4 5

High selling Apsara 1







Qno.5 Interest expressed by consumers asking products from Classmate brand (Very interested)1 interested) 2 3 4 5 (not at all

Qno.6 How would you rate classmate as a supplier for school stationery
Parameters Margins Shelf Arrangement Service Promotional support (1)Very good (2)Good (3)Neutral (4)Bad (5)Very Bad

Qno.7 what is your incentive to support Classmate stationery? Indicate your level of agreement with the following statements.
Neither agree nor disagree 3 3 Stro ngly disa gree 1 1

Strongly agree 1. You feel you are bringing about a change in the society 5 5

Somewhat agree 4 4

Somewhat disagree 2 2

2. You are interested in offering help

3. You feel sense of responsibility

4. You earn more profits

Qno.8 how would you rate their campaign Lets put India first? a) b) c) d) e) Excellent Good Neutral Bad Very Bad

Qno.9 Do you have a direct stake partnership in the scheme? a) Yes b) No


Qno.10 In your interaction with customers, do you think they are aware of Let us put India first scheme while buying? a) b) c) d) e) Well aware Aware Neutral Unaware Totally unaware



Qno.1 Rank your preference for the following stationery brands?
Least preferre d Apsara 5 4 3 2 Most preferre d 1






Qno.2 Can you recall any social initiatives of Classmate? ( If yes proceed to Qno. 3, if no skip Qno. 3) a) Yes b) No Qno.3 Do social initiatives of Classmate make you prefer it over others? a) Yes b) No Always Question 4 I pay close attention to initiatives when deciding on whether to purchase Classmate or others 1 2 3 4 Never 5

I am ready to pay a higher price for causes they work for I deliberately buy stationery because of initiatives Classmate its social

I recommend others to buy Classmate stationery because of its


social initiatives 8 I feel sense of fulfilment by using Classmate stationery I feel Classmate is really helping our country in the pursuit towards development Classmate is giving back to the society through the scheme I feel they do it for advertising and publicity purposes



Qno. 13 Do you feel strongly about any of the following? (You can tick more than one option)
Least importa nt 2 2 2 3 3 3 4 4 4 5 5 5

Most important Educational initiatives for less privileged Save environment initiatives 1 1 1

Public health and hygiene

Women empowerment Rural development

Section II Name: ______________________________________________ SEX: Male Age: a) b) c) d) 0-15 years 15-20 years 25-30 years More than 30 years Female

Occupation: a) b) c) d) Student Businessman Employed others


Monthly Income: a) b) c) d) Less than 15000 15000-20000 20000-25000 More than 25000

Level of Education: a) b) c) d) Post-graduation Graduation Secondary school Matriculation