CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A PREDICTOR OF CONSUMER BUYING BEHAVIOUR OF MILLENNIALS PDF

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DE MONTFORT UNIVERSITY LEICESTER BUSINESS SCHOOL CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A PREDICTOR OF CONSUMER BUYING BEHAVIOUR OF MILLENNIALS Abigael Maan Derecho Escobar P16069132 Dissertation submitted in part requirement for the award of BA (Hons) Marketing Management 3 May 2017 Supervised by...

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CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A PREDICTOR OF CONSUMER BUYING BEHAVIOUR OF MILLENNIALS Abigael Maan Escobar

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DE MONTFORT UNIVERSITY LEICESTER BUSINESS SCHOOL

CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A PREDICTOR OF CONSUMER BUYING BEHAVIOUR OF MILLENNIALS

Abigael Maan Derecho Escobar P16069132

Dissertation submitted in part requirement for the award of

BA (Hons) Marketing Management 3 May 2017 Supervised by: Ms. Celia Olmedo

ABIGAEL MAAN DERECHO ESCOBAR CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A PREDICTOR OF CONSUMER BUYING BEHAVIOUR OF MILLENNIALS ABSTRACT Before, price and quality completely dominate the buying decision of consumers, but in this era, where consumers are mostly millennials who are more careful and cautious with what they buy, corporate social responsibility (CSR) is now considered as a purchase criterion. This study further examined the role of the five dimensions of CSR (economic, legal, ethical, philanthropic, and environmental) as a predictor of consumer buying behaviour of millennials in the Philippines. The relationship between CSR and consumer buying behaviour was measured in a crosssectional study design. Both quantitative (online survey) and qualitative (in-depth interview) research methods were adopted by the researcher. For quantitative data, 150 respondents were chosen using non-probability sampling technique. The respondents answered an online questionnaire regarding their knowledge level on CSR, CSR and stakeholders’ expectations in businesses, and CSR and buying behaviour. For the qualitative data, six in-depth interview participants were randomly selected from the Business Administration (BA) students of Southville International School Affiliated with Foreign Universities (SISFU). The researcher used the semi-structured interview guide from Geokhaji’s (2015) study. Through multiple linear regression, significant relationship was found between philanthropic responsibility and consumer buying behaviour, showing that millennials in the Philippines would buy more from companies engaging in philanthropic activities. The qualitative results also showed that millennials consider philanthropic responsibility as the most important CSR dimension. However, huge regard on environmental responsibility was also demonstrated by the in-depth interview participants. Difference in methodology can shine light on this contradicting findings. It is hypothesized that the open-ended questions for in-depth interview, allowed the participants to specifically state their favoured environmental activities that are not given in the online survey. Nonetheless, consistency of quantitative and qualitative results that millennials in the Philippines consider philanthropic responsibility the most was evident. Keywords: CSR, Consumer Buying Behaviour, Millennials

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ACKNOWLEDGEMENTS First, I would like to thank our Almighty God for giving me the knowledge, strength, and determination for finishing this research. My sincere thanks and love go to my family and friends who supported me both mentally and emotionally throughout the research process. My deep sense of gratitude goes to my research supervisor, Ms. Celia Olmedo, who gave constant encouragements, guidance, advices, and prayers during the entire dissertation period. Also, I would like to thank Mr. Leopoldo Anoche and Mr. Ron Haarms, for their imparted knowledge has helped me to have a greater understanding on my chosen research topic.

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Table of Contents ABSTRACT .................................................................................................................................... I ACKNOWLEDGEMENTS ........................................................................................................ II LIST OF TABLES ...................................................................................................................... VI TABLE OF FIGURES .............................................................................................................. VII LIST OF ABBREVIATIONS ................................................................................................. VIII GLOSSARY OF TERMS ........................................................................................................... IX CHAPTER 1: INTRODUCTION ................................................................................................ 1 1.1 RESEARCH BACKGROUND ............................................................................................. 1 1.2 SIGNIFICANCE OF THE STUDY ...................................................................................... 3 1.3 CHAPTER OVERVIEW ...................................................................................................... 4 CHAPTER 2: LITERATURE REVIEW ................................................................................... 6 2.1 INTRODUCTION ................................................................................................................. 6 2.2 CORPORATE SOCIAL RESPONSIBILITY (CSR) ........................................................... 6 2.2.1 CSR Model ..................................................................................................................... 8 2.2.2 Triple Bottom Line ....................................................................................................... 11 2.3 CONSUMER BUYING BEHAVIOUR.............................................................................. 12 2.3.1 Consumer Buying Decision Process............................................................................. 13 2.3.2 Consumer Buyer Behaviour Model .............................................................................. 14 2.3.3 Factors Influencing Consumer Buying Behaviour ....................................................... 15 2.4 MILLENNIALS .................................................................................................................. 16 2.5 RELATED STUDIES ......................................................................................................... 16 2.6 CONCLUSIONS ................................................................................................................. 19 CHAPTER 3: CONTEXTUAL ANALYSIS ............................................................................ 20 3.1 CSR TRENDS ..................................................................................................................... 20 3.2 CSR ENGAGED COMPANIES ......................................................................................... 22 3.2.1 CSR Engaged Companies (International)..................................................................... 22 3.2.2 CSR Engaged Companies (Local) ................................................................................ 23 3.3 ANALYSIS AND CONCLUSIONS .................................................................................. 24 CHAPTER 4: METHODOLOGY ............................................................................................ 25 III

4.1 CONCEPTUAL FRAMEWORK ....................................................................................... 26 4.2 RESEARCH PHILOSOPHY .............................................................................................. 26 4.3 RESEARCH APPROACH.................................................................................................. 27 4.4 RESEARCH DESIGN ........................................................................................................ 27 4.5 METHODOLOGICAL CHOICE ....................................................................................... 28 4.6 RESEARCH STRATEGY .................................................................................................. 29 4.6.1 Online Survey ............................................................................................................... 29 4.6.2 In-depth Interview ........................................................................................................ 31 4.7 TIME HORIZON ................................................................................................................ 32 4.8 TECHNIQUES AND PROCEDURES ............................................................................... 32 4.8.1 Data Collection ............................................................................................................. 32 4.8.2 Sample Characteristics ................................................................................................. 32 4.8.3 Pilot Test ....................................................................................................................... 33 4.8.4 Statistical Treatment of Data ........................................................................................ 34 4.8.5 Qualitative Data Analysis ............................................................................................. 35 4.9 METHODOLOGY SUMMARY ........................................................................................ 36 CHAPTER 5: FINDINGS .......................................................................................................... 37 5.1 QUANTITATIVE DATA ................................................................................................... 37 5.1.1 Knowledge Level on CSR ............................................................................................ 37 5.1.2 Correlations Analysis ................................................................................................... 38 5.1.3 Multiple Linear Regression (MLR) .............................................................................. 39 5.2 QUALITATIVE DATA ...................................................................................................... 41 5.2.1 Research Objective One - To know the respondents’ level of understanding of the term CSR ........................................................................................................................................ 41 5.2.2 Research Objective Two - To determine the CSR dimension/s that could predict/s the consumer buying behaviour of millennials............................................................................ 43 5.2.3 Research Objective Three - To identify other factor/s that can predict/s the consumer buying behaviour of millennials ............................................................................................ 45 CHAPTER 6: DISCUSSION ..................................................................................................... 47 6.1 KNOWLEDGE LEVEL ON CSR ...................................................................................... 47 6.1.1 Quantitative .................................................................................................................. 47 6.1.2 Qualitative .................................................................................................................... 48 IV

6.2 CSR AS A PREDICTOR OF CONSUMER BUYING BEHAVIOUR .............................. 49 6.2.1 Quantitative .................................................................................................................. 49 6.2.2 Qualitative .................................................................................................................... 52 6.3 OTHER PREDICTORS OF CONSUMER BUYING BEHAVIOUR ................................ 53 6.3.1 Quantitative .................................................................................................................. 53 6.3.2 Qualitative .................................................................................................................... 53 CHAPTER 7: CONCLUSIONS & RECOMMENDATIONS ................................................ 55 7.1 CONCLUSIONS ................................................................................................................. 55 7.2 LIMITATIONS ................................................................................................................... 57 7.3 RECOMMENDATIONS .................................................................................................... 59 7.3.1 For Marketers ............................................................................................................... 59 7.3.2 For Future Researchers ................................................................................................. 61 REFERENCES ............................................................................................................................ 63 BIBLIOGRAPHY ....................................................................................................................... 69 APPENDICES ............................................................................................................................. 80 Appendix 1: Dissertation Supervisor Feedback Records .......................................................... 80 Appendix 2: Research Ethics Approval Form .......................................................................... 85 Appendix 3: Plagiarism ............................................................................................................. 94 Appendix 4: Dissertation Proposal ............................................................................................ 96 Appendix 5: Undergraduate Grade Descriptors ...................................................................... 103 Appendix 6: Dissertation Questionnaire ................................................................................. 105 Appendix 7: In-depth Interview Guide (Geokhaji, 2015) ....................................................... 110

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LIST OF TABLES Table 1: Validity and Reliability Results ...................................................................................... 30 Table 2: In-depth Interview Participants (Males) ........................................................................ 33 Table 3: In-depth Interview Participants (Females) ..................................................................... 33 Table 4: Methodology Summary ................................................................................................... 36 Table 5: Correlations Analysis ..................................................................................................... 38 Table 6: Model Summary of Multiple Regressions ....................................................................... 39 Table 7: ANOVA of Multiple Regressions .................................................................................... 40 Table 8: Coefficients of Multiple Regressions .............................................................................. 40 Table 9: Data Display for Research Objective One ..................................................................... 41 Table 10: Data Display for Research Objective Two ................................................................... 43 Table 11: Data Display for Research Objective Three ................................................................. 45

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TABLE OF FIGURES Figure 1: Carroll's (1979) CSR Pyramid ....................................................................................... 9 Figure 2: Elkington's (1998) Triple Bottom Line (TBL) ............................................................. 12 Figure 3: Kotler's (2012) Consumer Buying Decision Process ................................................... 13 Figure 4: Kotler’s (2012) Consumer Buyer Behaviour Model .................................................... 14 Figure 5: Factors Influencing Consumer Buying Behaviour ....................................................... 15 Figure 6: National Survey on Young People & Impact ............................................................... 21 Figure 7: Google Green ............................................................................................................... 22 Figure 8: TOMS’s “One for One" ............................................................................................... 22 Figure 9: San Miguel Corporation ............................................................................................... 23 Figure 10: Human Nature ............................................................................................................ 23 Figure 11: Conceptual Framework .............................................................................................. 26 Figure 12: Respondents' Knowledge Level on CSR.................................................................... 37 Figure 13: TOMS Shoes' Cause-Related Marketing ................................................................... 60

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LIST OF ABBREVIATIONS ANOVA (Analysis of Variance)

A statistical technique to test the linear relationship between the combination of more than one independent variables and a dependent variable.

CSR (Corporate Social Responsibility)

Social responsibilities of businesses encompass the economic, legal, ethical, and philanthropic expectations of the society.

FMCG (Fast-Moving Consumer Goods)

Products that are sold quickly and at relatively low cost. Examples include non-durable goods such as toiletries, over-the-counter drugs, and processed foods.

MLR (Multiple Linear Regression)

A statistical technique that uses several explanatory variables to predict the outcome of a response variable.

NPA (Natural Products Association)

Non-profit organization in the U.S. committed to the promotion of natural manufacturing, protection of consumer’s health, and environmental safety

TBL (Triple Bottom Line)

A CSR concept focusing on three issues: social responsibility (people), environmental responsibility (planet), and economic responsibility (profit).

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GLOSSARY OF TERMS Cause-related Marketing

Promotional strategy in which a firm’s sales are linked, and a percentage of the sales revenue is donated

Cronbach’s Alpha

Measure of scale reliability

Cross-sectional

Observational study that analyses data collected from a population, or a representative subset, at a specific point in time

Deduction

Inference of particular instances by reference to a general law or principle

Descriptive Research

Provides an accurate portrayal of characteristics of a particular individual, situation or group

Explanatory Research

Tests theory and focuses on the reasons behind relationships of variables to one another

Homogenous Sampling

Non-probability sampling technique where specific group of people within the population are selected for the study

Multicollinearity

Phenomenon in which two or more predictor variables in a multiple regression model are highly correlated, meaning that one can be linearly

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predicted from the others with a substantial degree of accuracy. Philanthropy

Includes corporate actions, towards promoting human welfare or goodwill, in response to society’s expectations that businesses should be good corporate citizens

Pragmatism

Research philosophy which argued that the most vital determinant in designing a research method was the research question, and both observable phenomena and subjective meanings can provide acceptable knowledge

Theoretical Propositions

Qualitative anal...