BBA 433 – RESEARCH METHODOLOGY

CIA II

TITLE – THE IMPACT OF CSR ACTIVITIES ON THE BRAND

LOYALTY OF A CUSTOMER – ITC LTD

SUBMITTED TO – Dr Sumathi A

SUBMITTED ON – 22 February 2024

SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST(DEEMED-TO-BE) UNIVERSITY

SUBMITTED BY –

Sanchit Maitra (2223334)

Devika Manoj (2223353)

Prerika Maheshwari (2223370)

Sanjana Roy (2223373)

Shreya Toby (2223375)

Table of Contents
Introduction................................................................................................................................1

Literature Review.......................................................................................................................2

Corporate Social Responsibility (CSR).................................................................................2

Brand Loyalty.........................................................................................................................3

CSR and Brand Loyalty.........................................................................................................4

Fast Moving Consumer Goods (FMCG)................................................................................7

FMCG and Brand Loyalty.....................................................................................................9

References................................................................................................................................12
Introduction
Corporate Social Responsibility is a widely-thrown around word. It has wide-reaching impacts
on multiple stakeholders. “CSR is concerned with treating the stakeholders of the firm ethically
or in a responsible manner. ‘Ethically or Social responsible’ means treating stakeholders in a
manner deemed acceptable in civilized societies. Social includes economic responsibility.
Stakeholders exist both within a firm and outside. The wider aim of social responsibility is to
create higher and higher standards of living, while preserving the profitability of the
corporation, for peoples both within and outside the corporation(Hopkins, 2012).”

For corporates, it has become increasingly important to understand how to leverage the CSR
activities of their company to their advantage. For consumers, an awareness of the company’s
CSR initiatives leads to a positive correlation with purchase intention(Lee & Shin, 2010).
However, previous research points to the fact that there is a reasonable gap between a
customer’s purchase intention and the actual buying process. Although consumers usually look
out for companies that are actively involved in CSR initiatives, it does not always form a part of
their decision to buy a product (Öberseder et al., 2011).

There is a need to study whether there is a link between brand loyalty of a consumer and the
CSR initiatives of a company. Although, there has been some research done on the linkage
between brand loyalty and CSR, it has been restricted to the sportwear industry and only in the
Delhi-NCR region(Sharma & Jain, 2019). Our research focuses on the FMCG Industry. To
narrow it down further, we have taken ITC Ltd. as our primary focus. The company is known to
produce tobacco products among its other popular product range. It also heavily spends its
profits on CSR activities ((ITC’s Corporate Social Responsibility - Generating Livelihoods and
Environmental Capital, n.d.). We focus on all Customer perceptions have been the major
source of data for such research and we believe the firms’ perception is equally, if not more
important. Another research points out that purchase frequency has a high positive correlation
with brand loyalty (Morkunas & Grišmanauskaite˙, 2023). We try to understand whether
emotional connection when in sync with the CSR activities can impact the loyalty of a customer
towards the brand. Past research has usually focused on specific social initiatives and does not
cover the entire spectrum of CSR activities that a corporate undertakes. We aim to cover all the
activities that ITC Ltd. undertaken in the last 5 years from 2018 to 2023.

Literature Review
Corporate Social Responsibility (CSR)
To understand what CSR truly encompasses, we need to understand what is the definition of
CSR (Corporate Social Responsibility). There are a lot of definitions for CSR that consistently
refer to five dimensions – Voluntariness, Stakeholders, Social, Economic and Environmental
dimensions (Dahlsrud, 2008). “A concept whereby companies integrate social and
environmental concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis.” This is the definition of Corporate Social Responsibility
according to Commission of the European Communities in 2001 that includes all the five
dimensions.

According to the Indian Companies Act 2013, every company that fulfils certain criterions with
regard to its profitability, size and net worth are required to spend at least 2% of their net
income on CSR activities. When mandatorily required to follow the CSR policies of the
government, companies usually have to face low share prices in stock market (Manchiraju &
Rajgopal, 2017) as compared to firms who are not forced to carry out CSR activities. This can
lead to a fall in the shareholder value which ultimately goes against the purpose of CSR.

There has also been a lot of research that has been conducted to understand the linkage between
CSR and consumer behaviour. There is a positive correlation between consumers’ awareness of
a company’s CSR activities and purchase intentions (Lee & Shin, 2010). Customers seek out
products from companies that are actively involved in CSR activities. However, these purchase
intentions do not always get converted into actual buying (Öberseder et al., 2011). There is a
significant gap between a consumers’ interest in a company’s CSR activities and the limited role
it plays in the purchase-making decision process. There are various factors that come into play
while considering CSR as a purchase criterion which is a highly complex and elaborate process.

Firms that want to project themselves as “doing good” in their target segments must carefully
select and promote those initiatives (Becker-Olsen et al., 2006). CSR activities are not a
replacement for a strong brand identity and good quality products and services. Although, in
markets with a lot of competitors social initiatives can be used as differentiators, they are rarely
considered in the decision-making process of a consumer.

Consumers express preferences for products that aim to improve stakeholder wellness at a
reasonable price (Banerjee & Dasgupta, 2020). They are able to notice a company’s CSR
initiatives if they are well–publicised. This helps in closing the considerable attitude-behaviour
gap of customers with respect to CSR initiatives of a company and the purchase intentions of a
customer.

Brand Loyalty of a Consumer

Organisations are required to serve the society and help in the socio-economic development of
the society. Through CSR, a company can meet societal expectations for it in several areas,
including legal, ethical, and commercial. Customers are primarily influenced by CSR through
several factors, including perceived value, trust, and dedication, which raises customer
happiness and loyalty. A company's reputation and brand can be improved by being socially
conscious. Additionally, it raises staff morale, which boosts output. CSR increases the positive
relationships and the profits. It enhances the trust of the public.

Research indicates that during times of crisis, consumers who are loyal to firms with robust
corporate social responsibility initiatives are more likely to pay higher prices and face less
danger to their reputation(Das, 2021). Brand loyalty is directly influenced by these elements.
CSR may improve financial performance and fortify client ties in marketing initiatives. Brand
loyalty can be increased by fostering strong customer relationships through ethical and
sustainable business practices. CSR initiatives in the fields of healthcare, women's
empowerment, and environmental sustainability serve as examples of how businesses can
engage with the public on significant social issues and win over devoted supporters who share
their beliefs.

There are numerous companies for instance Hindustan Unilever Limited, Colgate-Palmolive,
ITC limited, Nestle, Parle Agro, Britannia Industries Ltd, Marico Ltd, Procter & Gamble,
Godrej Group, Amul etc is who are involved in various CSR activities. CSR activities of
companies create trust among its customers in turn result in positive attitudes towards buying
behaviour. There is not much difference between Male and Female respondents when it comes
to the Impact of Corporate Social Responsibility on Consumer Buying Behaviour for FMCG
Products(Anupama & Jayanthi, 2019).

Anecdotal evidence proves that consumers care about brands being accountable for their
actions. For instance, what types of CSR activities consumers would prefer, the Coca-Cola
Company recently tested a battery of potential initiatives using a series of consumer focus
groups. Corrective and Compensating CSR actions address the negative impacts of a brand's
operations and acknowledge accountability. This leads to higher perceptions of brand
sincerity and leads to increased purchase intentions, slowly resulting into brand loyalty over
time(Nickerson et al., 2021). Focusing on environmentally-friendly CSR initiatives, especially
within Corrective actions, further strengthens positive purchase intentions, possibly due to
increased consumer appreciation for environmental responsibility. According to the paper CSR
activities based on accountability for the brand's impact on consumers and the environment are
more likely to positively influence purchase intentions and potentially, brand loyalty amongst
the consumers.
In the highly competitive FMCG landscape, brand loyalty is on a lower end. During COVID-
19, it became even more, with consumers seeking trust, empathy, and purpose from the brands
they choose. This is where CSR initiatives shine as a powerful tool to not only boost brand
loyalty but also build resilience in the face of unforeseen challenges. Brands that actively
supported healthcare workers, vulnerable populations, or local businesses through CSR
initiatives fostered trust and emotional connections with consumers. By focusing on a common
goal beyond profit, brands can build a community around their values, attracting and retaining
like-minded customers. A 2020 survey found that 87% of customers would purchase a product
due to its social or environmental benefits(VC & Vaz, 2022).

CSR and Brand Loyalty

"The ongoing commitment by business to behave ethically and contribute to economic

development while improving the quality of life of the workforce and their families as well as
of the local community and society at large" is how the World Council for Sustainable
Development defines corporate social responsibility (CSR). Given that corporate social
responsibility (CSR) has a long and illustrious history, societal expectations about the beneficial
contributions that firms may make are not new. The interplay between globalization and
industrialization led to the development of CSR.

Accountability, responsibility, corporate governance, corporate image, sustainability, and

business ethics are key ideas in comprehending corporate social responsibility (CSR). The study
delves into the concept of brand loyalty, which is impacted by several elements including trust,
quality, dependability, credibility, and consistency, and involves a strong commitment to
regularly repurchase or patronize a favoured product or service.

Finding the critical role that brand recognition and brand credibility play in the link between
CSR and brand loyalty is one of the study's major accomplishments. The current study provides
factual evidence for this perspective. The results demonstrate that a customer's brand loyalty is
increased when they strongly identify with a brand that engages in socially conscious activities.
According to the research, CSR initiatives would raise brand awareness among stakeholders
and strengthen its legitimacy, which will increase brand loyalty. The favourable impact of
corporate social responsibility (CSR) on customer brand identification in banking services is
further supported by empirical data in this study. This implies that a brand's socially motivated
advantages may have an impact on brand recognition. Furthermore, the findings imply that
through customer brand identification, businesses may build brand loyalty. Similarly, a
customer is more likely to identify with a brand if they see a fit between it and their own values.
It could thus lead to a lasting bond with the brand. (Fatma & Khan, 2023)
A recent study, “The Influence of a Firm’s CSR Initiatives on Brand Loyalty and Brand Image”,
(Lu et al., 2020) shows that customers are aware of what corporate social responsibility (CSR)
is. Moreover, most customers are aware that one of a company's key facets is corporate social
responsibility. It’ key finding is that CSR activities improve brand loyalty and image, which in
turn may make businesses more competitive in the marketplace. A key factor in determining a
company's status in the market and in giving it a competitive edge is brand loyalty. As a result,
businesses should implement the essential CSR programs to preserve and uphold their
reputation for reliability and quality. This specific study can help businesses and marketers
understand how their corporate social responsibility efforts and programs are affecting key
aspects of brand loyalty. Marketers and strategists may utilize this data to create strategies that
take these results into account. (Lu, et al., 2020)

A study namely “A Study on Effect of Corporate Social Responsibility on Brand Trust and
Brand Loyalty in FMCG Sector” (Kaushal & Pallavi, 2016) was conducted to identify the
aspects of Corporate Social Responsibility (CSR) that affect brand trust and investigate the
relationship between brand trust and brand loyalty. Corporate governance, social responsibility,
and ethical responsibility were among the CSR factors. Eleven important components were
found after a factor analysis of 27 variables using a survey was conducted. Notably, brand
image was shown to be the most influential factor, whilst marketing strategy had the least
effect. This suggests that the P&G Company's CSR efforts had a good impact on customers'
perceptions of the company, with little belief that it was just a marketing tactic. The ensuing
regression study brought to light how crucial sound company governance is in determining how
CSR initiatives are perceived. It underlined how important it is for businesses, like P&G, to
prioritize good corporate governance procedures and follow regulatory requirements when
putting their CSR plans into action. Additionally, the study aimed to determine if brand loyalty
is influenced by brand trust and whether CSR aspects are related to brand trust. The statistical
significance of the links between CSR activities and brand trust and between brand trust and
brand loyalty was confirmed using one-sample t-tests(Kaushal & Pallavi, 2016).

The study delves into the topic of Corporate Social Responsibility (CSR) and how it affects
customer views. The findings are complex, especially when considering luxury products that
are linked to ideals of self-enhancement. The study discovers that participating in CSR can
result in brand dilution for luxury businesses with connections of self-enhancement, in contrast
to traditional CSR literature, which mostly focuses on non-luxury firms. The study highlights
the critical impact that brand concepts play, demonstrating that CSR initiatives can backfire for
luxury companies that are connected with self-improvement but not for those that are associated
with openness or conservation ideas. The study further clarifies the significance of abstract
brand meanings by highlighting the way in which competing abstract objectives sparked by
brand conceptions can result in a feeling of disfluency that affects customer assessments.
Moreover, the study delves into the impact of mindset processing, differentiating between
abstract and concrete thinking, and providing insights for advertising tactics aimed at
influencing consumer mindsets in corporate social responsibility messaging.

The notion of fluency effects and nonconscious aims is introduced by the findings, which also
add to the larger discourse in CSR research. The study emphasizes the necessity for a
sophisticated strategy in branding luxury products by noting the possible contradictions
between prosocial CSR initiatives and self-enhancement brand conceptions. The ramifications
reach into management tactics, implying that high-end companies involved in corporate social
responsibility must cautiously handle the concurrent arousal of competing brand connotations.
The study encourages further investigation into the long-term impacts of brand ideas and CSR
on customer perceptions and offers up new research directions(Torelli et al., 2012).

With a focus on businesses that operate in Pakistan, this study examines the connection between
corporate social responsibility (CSR) and aspects of brand image. The study's four hypotheses
were all confirmed, suggesting a favorable relationship between CSR and brand image.
According to the research, corporate social responsibility (CSR) is a relatively new yet crucial
strategic strategy for sustainable business operations. It seems that businesses in Pakistan are
mostly focused on charity endeavors (Kanwal, 2013). Customers clearly choose Unilever over
other brands because of its superior goods and dedication to corporate social responsibility,
which is demonstrated by programs like the Unilever Foundation, which was established in
2012. Pakistan's developing position and large proportion of low-income people are factors
contributing to the altruistic nature of its businesses. This encourages customers to place a high
value on product quality as well as to pay close attention to business initiatives aimed at
resolving socioeconomic issues and enhancing the nation's infrastructure. Because of its
proactive efforts to raise living standards, Unilever enjoys a better reputation among consumers
and is thus more preferred, satisfied, and loyal to it than other brands.

According to the study's findings, there are important connections between consumers'
perceptions of company competence, social self-concept, personal self-concept, and corporate
brand loyalty. The strong and positive correlations found are consistent with other studies,
bolstering the notion that corporate brand loyalty is influenced by social and personal self-
concept links, with CSR and corporate competency associations playing major roles in these
connections. Nonetheless, the research finds that national culture has a moderating role on the
impact of CSR associations on the relationship between social self-concept and, in turn, on
corporate brand loyalty. This is in line with other studies that show how social, cultural, and
economic variables affect how CSR is seen and used. Notably, the study raises the possibility
that cultural differences in how CSR is perceived may provide difficulties for a globally defined
set of CSR standards.

The study did not find such moderation in the impact of consumers' corporate competence
associations on their self-concept connection, even though the results support the moderating
role of national culture in the relationship between personal and social self-concept connections
and corporate brand loyalty(Moon et al., 2015). This implies that the relationship between self-
concept and business competence connections may be more universal and constant across
cultural boundaries. The results emphasize the necessity for nuanced methods in understanding
and executing CSR initiatives across varied cultural settings, underscoring the complexity of
cultural impacts on consumer responses to CSR and business image.

Fast Moving Consumer Goods (FMCG)

FMCG stands for fast moving consumer goods, which means that they are consumed
immediately and have a short shelf life. FMCG products consist of personal care products, food
and beverages, homecare commodities etc. This industry is one of the main drivers of the Indian
Economy. Due to the availability of a lot of options, consumers can easily switch brand. This
increases the need of building consumer loyalty and trust(FMCG Industry in India - A
Complete Overview, n.d.). The growth of this sector is driven by a strong demand for health-
conscious products and convenience foods. Long term success requires embracing digitalization
and meeting environmental and social standards. This is where CSR comes to play.

CSR initiatives can be one of the ways of building consumer trust and ensure long term success
in the FMCG industry. Numerous studies have delved into the CSR initiatives of FMCG
companies. Findings reveal that high awareness of CSR policies have a significant positive
impact on revenue and customer satisfaction(Sandeep et al., 2023). Consumer Decision Process
involves steps like problem recognition, information search, evaluation of alternatives,
purchase, and post-purchase use. Factors influencing buying decisions for selected FMCG
products include taste, availability, quality, and media influence. Successful FMCG companies
innovate models, use technology for flexible supply chains, and address urban issues for
growth(Tyagi et al., 2019).

“When the corporates are more concerned with increasing their profit statistics, consumers have
begun to observe their concern towards the society.” The research findings indicate that
Corporate Social Responsibility (CSR) has a favourable effect on the purchasing habits of fast-
moving consumer goods (FMCG) consumers in Chennai. Customers valued accurate
information, environmentally friendly packaging, and contributions to society when selecting
products from socially conscious businesses. Purchasing decisions were notably influenced by
elements like avoiding socially irresponsible products and taking CSR strategies into account.
There was no discernible difference in the responses to CSR between male and female
respondents, according to gender-based analysis. The study had a small sample size, a cross-
sectional methodology, focus on just one city which are some of the shortcomings(Anupama &
Jayanthi, 2019). Future research could be done considering the other factors that influence the
buying behaviour, taking a greater number of respondents from a larger geographical area.

The study demonstrates a clear correlation between brand loyalty (BL) and corporate social
responsibility (CSR), highlighting the emotional influence of CSR on consumers that goes
beyond taste and preference. By serving as a mediator, corporate branding (CB) improves the
bond between BL and CSR. The study highlights the significance of companies participating in
CSR activities by showing a substantial overall connection between CSR, CB, and BL(Menaga
& Shanmugam, 2021). This paper introduces a new aspect that connects the brand loyalty to csr
initiatives. This new aspect corporate branding refers to the strategic process through which an
organization establishes and communicates a distinct and positive identity to the public.

In the given studies, importance of the FMCG sector in boosting the Indian economy is
emphasized, with special attention paid to the importance of customer loyalty and trust. The
studies focus on how CSR initiatives affect revenue, satisfaction, and consumer trust. There is a
potential for future research, such as examining other factors impacting purchasing behaviour,
analyzing the consumer loyalty of companies who have a high CSR spending, taking a larger
geographical area etc.

FMCG and Brand Loyalty

Fast moving consumer goods and brand loyalty are closely related and it is important to
understand this relationship. Researchers that use rational or cognitive criteria to study brand
loyalty believe that brand loyalty results from consistent satisfaction with the brand rather than
from a profoundly committed or passionately held attitude towards the brand(Rose, 2009).
Differentiating between recurring purchasing behaviour and loyalty is crucial. Loyalty is
evident only when customers evaluate many brands and consciously choose to buy from one of
those brands. Otherwise, recurring purchases are the result of inertia, when customers buy the
same thing out of habit. Tradition and nostalgia ranked highly among the factors that led to
loyalty in FMCG. This research concludes that when loyalties develop as a result of emotional
attachments, the bonds formed are stronger and the brand becomes established in the life of the
consumer. However, bonds can also form where consumers are loyal for cognitive reasons.

Businesses now understand how important it is to retain their existing customer base, and they
are looking for and implementing strategies to create lasting bonds with them(Moolla &
Bisschoff, 2015). They initially identified 58 influences that directly affect brand loyalty, then
brought it down to 26 and then to 12 and eventually to the final 9 influences. Constructing a
dependable and precise measurement instrument for statistically validating brand loyalty
research is a common difficulty faced by researchers. Increasing the number of factors and
items involved makes this much more difficult. Measuring brand loyalty becomes even more
complex, when other behavioral and attitudinal aspects are included.

Consumer brand loyalty in the FMCG market is apparently decreasing in recent times(Selvam,
2020). This can be attributed to a number of factors, including sophisticated advertisements and
strong media support, product similarities in terms of form, content, price, and communication;
mass exhibits, coupons, and price specials used in sales promotions to entice consumers to
make impulsive purchases; general fickle mindedness of consumers and the rise of new
products vying for shelf space and consumer interest.

Brand loyalty in the FMCG industry cannot be determined solely by taste experience. In this
specific market niche of Beer products, brand loyalty is impacted by perceived quality,
frequency of purchases, promotions, and perceived price. These factors are mediated by brand
satisfaction and brand trust, with the latter having the most beneficial impact on the
development of brand loyalty(Morkūnas & Grišmanauskaite, 2023).

Brand should be compatible with and related to the values of the consumers in order for this
adaptability to impact the brand's appeal and foster brand loyalty(Aini & Ferdinand, 2022). If
consumers perceive the brand to be in unity with them, that is, if consumers feel identical to it,
then it boosts brand loyalty.

Through our study, we aim to fill a research gap in the current literature by investigating the
relationship between brand loyalty and corporate social responsibility (CSR) with respect to
ITC limited. Our research model depicts the complex relationships that exist between CSR
activities, CSR perception, CSR awareness, their emotional connection to the brand and the
efficacy of the company's communication strategies (See Figure 1 below).
Figure 1: Conceptual Research Model

Model and Hypotheses Development

CSR and Brand Loyalty

Previous research points to the fact that corporate social responsibility and brand loyalty have a
positive relationship between each other(Aljarah & Ibrahim, 2020). Consumers were more
prone to purchasing from a brand if their CSR activities were environmentally-aligned (Venger
& Pomirleanu, 2018). It has also been established that there exists a positive relationship
between CSR perception and price fairness (Jha et al., 2022). Consumers are willing to pay a
higher price if they perceive the company to be socially responsible. Ethical practices
conducted by businesses should be able to develop brand loyalty among their customers in the
long-run (Amoako et al., 2021). Enhanced CSR performance has the potential to improve
consumer confidence in a brand and the brand loyalty, thereby improving the overall
performance of the company (Le et al., 2023). Based on the above literature, we have developed
the following hypothesis:

H1: Consumers who perceive ITC Ltd. to be highly engaged in CSR activities will have higher
brand loyalty compared to those who perceive the company to be less engaged.

H1a: This positive relationship between Brand Loyalty and CSR will be higher for consumers
who value social responsibility.

The Role of Emotional Connector as a Mediator

Research shows that customer’s emotional connection can drive their brand loyalty(So et al.,
2013). There is direct positive relationship between satisfaction and emotional connection and
company loyalty(Levy & Hino, 2016). The emotional connections that consumers feel for their
companies is used as a differentiating factor by such companies to consolidate their position and
increase brand loyalty(Martín et al., 2020). If a consumer is satisfied throughout their multiple
purchases at a company, it helps to develop brand loyalty and an emotional connection with the
company(Ghorbanzadeh, 2021). Consumers’ emotional attachment can be influenced by a
company’s CSR activities(Gilal et al., 2023). A consumer’s happiness can be increased by
influencing their emotional connection with the company. Strategically using emotional appeal
in a company’s CSR communication can increase a consumer’s loyalty intention(He et al.,
2022). Based on the above literature, we have developed the following hypothesis:

H2: Consumers who positively perceive the CSR activities of ITC Ltd. will have a strong
emotional connection with the company.

H2a: Stronger emotional connection with the company will result in higher brand loyalty.

Comparison of Perception of a Company’s Commitment to CSR

CSR perception permeates geographical boundaries(Zapata-Ramos & Kim, 2018). The impact
of a CSR activity is different in various geographic regions. Consumers in different parts of the
world rate the various spheres of CSR (Economic, Ethical, Legal and Philanthropical)
differently. A consumer’s perception of a company’s CSR activities is positively related to
brand trustworthiness and customer identification with brand (Curras-Perez et al., 2023).
Language also plays a vital role in how a consumer perceives a company’s CSR activities(Wei,
2020). Companies with better CSR performance used more of first-person pronouns and less of
second-person pronouns. Consumers believe that it is the social responsibility of a company to
follow the CSR policies and those costs should not be borne by the customers(Gupta & Hodges,
2012). Consumers are willing to relate themselves to a socially responsible company to enhance
their self-esteem(Fatma et al., 2022). Companies can also us CSR to build strong emotional
relationships with consumers. Based on the above literature, we have developed the following
hypothesis:

H3: There is significant difference between the way a consumer perceives a company’s
commitment to CSR activities compared to the company itself.

H3a: The perceived gap between a consumer and company’s perception will be associated with
negative brand loyalty.

Effective CSR Communication Strategies

Research points to the fact that the communication strategies employed by a company play a
vital role in converting the purchase intention of a consumer to actual buying(Venger &
Pomirleanu, 2018). Advertising was the turning point for most consumer rather than consuming
print media. The traditional method of communicating via reports fails to generate awareness
among consumers (Loureiro & Lopes, 2019). With growing social media development,
companies must make efficient utilisation of all its resources to properly communicate with the
stakeholders. Companies with better CSR performance keep their disclosures upfront on the
company website rather than making consumers manoeuvre through several webpages to reach
the required documents(Wei, 2020). A company that is highly engaged in CSR helps in bringing
in customers with favourable attitudes (Rathore et al., 2022). These consumers go out of their
way to shop at socially responsible brands. Based on the above literature, we have developed
the following hypothesis:

H4: Consumers exposed to CSR communication from ITC Ltd will have higher awareness
compared to consumers that are not exposed to.

H4a: Higher awareness of the company’s CSR activities will lead to greater brand loyalty.

Methodology
Population and Sampling Design

Population

The overall population consists of consumers residing in metropolitan cities across India who
have purchased ITC Ltd. products within the last 5 years that is 2018-2023.

List of the metropolitan cities under study:

 Ahmedabad, Gujarat
 Bangalore, Karnataka
 Chennai, Tamil Nadu
 Delhi, Delhi NCR
 Hyderabad, Telangana
 Kolkata, West Bengal
 Mumbai, Maharashtra
 Pune, Maharashtra

The population will also include senior executives currently employed in the Marketing and
CSR Departments of ITC Ltd.

The consumer base population reflects research focus on understanding consumer perceptions
and brand loyalty within the targeted market segment. The senior executives population, while
small, offers valuable insights from individuals directly involved in shaping and communicating
ITC's CSR initiatives.
Sampling Design

For Objectives 1 through 4 for which we aim to circulate an online survey developed on
Qualtrics. We will be employing stratified sampling on the basis of age groups. Stratified
sampling helps ensure a representative sample of ITC consumers across demographics, leading
to more reliable findings for testing. Stratum has been designed on the basis of age groups and
data will be collected from each stratum in order to analyse the consumer perception across
cities.

For Objectives 3 and 4 where we seek inputs and insights from the senior executives working in
the Marketing and CSR Committee of ITC Ltd, convenience and purposive sampling will be
used to reach out to company executives. We will be approaching them based on their
availability and accessibility. We will be getting first-hand information from them by visiting
the ITC offices nearby and within our range. We will also employ purposive sampling by
reaching out to specific people who fit our criterion of holding a senior position in either the
Marketing or CSR Committee of ITC Ltd. It will be used to collect data from company
executives. Who will be selected based on a particular criterion that is the top executives who
are contributing to the CSR initiative of the company and have a major role to play in positive
publicity.

We aim to reach over 300 consumers from various metropolitan cities and across varying age
groups. We also plan on interviewing 15-20 senior executives working at various offices of ITC
Ltd.

Data Analysis Methods

Objective 1: To measure the linkage between CSR and Brand Loyalty among consumers of ITC
Limited.

The linkage between the independent variable which is the CSR activities of ITC Ltd., and the
variable dependent on it which is brand loyalty of an ITC Ltd. consumer, can be studied and
analyzed using correlation. The data will be collected through surveys. Pearson's correlation
coefficient or Spearman's rank correlation coefficient can be used for the same. However, the
selection of the test to be used will depend on the normality of the data along with other
characteristics

Pearson's Correlation Coefficient: This is a parametric test to measure the linear correlation
between two variables. It helps us quantify the direction and the strength of the relationship
between the independent variable, in this case CSR activities, and the dependent variable,
which is brand loyalty. We can determine whether there is a significant positive correlation
between the CSR activities and brand loyalty by calculating the correlation coefficient. This
tool can be used only if CSR activities and brand loyalty are normally distributed, that is, the
histogram will resemble a bell-shaped curve. To use this test, both the variables that are being
studied have to be measured on an interval or ratio scale. In our study, this would mean that the
CSR activities should be measured using a quantitative approach and brand loyalty should be
measured using behavioral measures. Since it studies linear relationships, the tool can be used
only if the relationship between CSR activities and brand loyalty is linear.

Spearman's Rank Correlation Coefficient: It is a non-parametric test that assesses the

relationship between two variables using a monotonic function. Here, it can be used to analyze
the relationship between CSR activities of ITC Ltd. and brand loyalty. Spearman’s rank
correlation focuses on the overall trend and not on the specific values, therefore it overcomes
the concerns faced while using Pearson’s correlation coefficient such as uncertain assumptions
or ordinal data. To use this tool, one data point’s value should not have any influence on
another. The test assumes that there is a monotonic relationship between the CSR activities and
brand loyalty. In this case, as CSR activities increase, the brand loyalty should consistently
increase or consistently decrease. However, linearity is not a necessity.

Objective 2: To study the role of emotional connection as a mediator in the CSR - Brand loyalty
relation

The data collected to study this objective can be analyzed using Structural Equation Modeling
(SEM). It is a tool that can be used to build and test a complex model that shows the
relationships between more than two variables. SEM can thus create a model that studies the
mediation effect that emotional connection has on CSR activities affecting brand loyalty. SEM
is more effective to help understand the overall model of relationships affecting brand loyalty
and if our data is extensive. However, SEM is difficult to implement and is more complex to
interpret and it requires more data and the assumptions need to be stronger compared to
mediator analysis for the analysis to be reliable.

Objective 3: To compare the perception of the company’s commitment to CSR among the
consumers and the company itself

To analyze the qualitative data collected for this objective, NVivo can be used. It is a qualitative
analysis software which can help analyze both textual as well as multimedia data. To begin with
the analysis, we first have to import the qualitative data collected into NVivo, which would
include the transcripts of the interviews with company executives and the consumer surveys
with open-ended questions. This data should then be organized into sets, that is, consumers vs.
company representatives. This data will then be coded using a coding scheme that captures key
themes related to CSR perception. This could include themes like the specific CSR activities of
ITC Ltd. and the perception regarding the CSR efforts’ effectiveness of the consumers and the
company. A comparative analysis can be done using NVivo's query and reporting tools. This
will help us compare the coded data across the consumer and company groups. This can be
carried out by identifying the recurring themes within both the groups, by analyzing the
differences and similarities in the perception regarding specific CSR activities and how each
group talks about it, by observing the sentiment and the emotional tone associated with the
discussions regarding CSR activities in each group.

Objective 4: To analyze the effectiveness of the company’s communication strategies for its
CSR activities to generate awareness among customers

Multiple Linear Regression is a statistical technique that can be used to analyze the data
collected for the fourth objective. It helps analyze the relationship between a dependent variable
(customer awareness) and the independent variables (communication strategies employed by
ITC for CSR activities). We can determine the significance and strength of the relationship by
regressing communication strategies against customer awareness.

Annexure
Questionnaire for the Consumer

I. Brand Loyalty (6 questions): The scale used is a 7-point likert scale where 1 denotes
strongly disagree and 7 denotes strongly agree [adapted from (Pratihari & Uzma,
2018)]
1. I am completely satisfied with the products and services offered by ITC Ltd
2. I am willing to pay a higher price for products from ITC Ltd compared to other brands
3. If ITC Ltd stopped offering a product I regularly purchase, I would be likely to switch
to another brand
4. I would recommend products from ITC Ltd to friends and family
5. I consider ITC Ltd to be my first choice when shopping for FMCG products
6. I am a loyal customer of ITC Ltd and prefer to buy their products consistently

II. Emotional Connection (6 questions): The scale used is a 7-point likert scale where 1
denotes strongly disagree and 7 denotes strongly agree [adapted from (Levy & Hino,
2016)]
1. I feel proud to use and support ITC products.
2. ITC products make me feel like they understand my needs and preferences.
3. I feel like ITC products reflect my personality and values.
4. Using ITC products makes me feel happy and satisfied.
5. I feel emotionally invested in the success and impact of ITC.
 6. ITC products evoke positive emotions in me, such as trust, pride, or nostalgia.

III. CSR Perception (11 questions) The scale used is a 7-point likert scale where 1 denotes
strongly disagree and 7 denotes strongly agree [adapted from (Jha et al., 2022)]
1. ITC Ltd treats its employees fairly and ethically.
2. ITC Ltd actively supports social causes and community initiatives.
3. ITC Ltd takes steps to reduce its environmental impact through sustainable practices.
4. ITC Ltd invests in programs that benefit the local communities where it operates.
5. ITC Ltd is transparent and accountable in its CSR activities.
6. ITC L t d uses its CSR initiatives to genuinely improve society, not just for
marketing purposes.
7. The CSR activities of ITC Ltd make me feel more positive about buying their products.
8. Compared to other FMCG brands, ITC’s activities are more effective in making a
positive impact.
9. I trust ITC Ltd more than other FMCG brands to deliver on its CSR promises.
10. The overall efforts of ITC Ltd in terms of CSR make me more loyal to their products.
 IV. Consumer Awareness of a Company’s Commitment to CSR (5 questions) The scale
used is a 5-point likert scale where 1 denotes strongly disagree and 7 denotes
strongly agree [self-developed on which reliability tests will be run]

1. I am aware of ITC Ltd’s CSR activities.

2. It is easy to find information about ITC Ltd’s CSR activities.
3. The communication channels used by ITC Ltd effectively convey the impact of
their CSR activities.
4. The communication about ITC Ltd’s CSR activities make me feel positively about
the company.
5. The information about ITC Ltd’s CSR activities influences my decision to purchase
their products.
Questionnaire for the Company

1. Can you describe ITC's key CSR activities and their objectives?

2. How do you measure the effectiveness of your CSR initiatives?

3. What are the biggest challenges you face in implementing your CSR activities?

4. What communication strategies do you use to raise awareness about your CSR activities?

5. How do you evaluate the effectiveness of your CSR communication strategies?

6. How does your CSR communication differ from your marketing communication?

7. Do you track how CSR activities impact brand perception and customer loyalty?

8. How do you engage with stakeholders (employees, communities, NGOs) in your CSR
activities?

9. What are your plans for future CSR initiatives?

10. How does ITC differentiate itself from other FMCG companies in terms of CSR?

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