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IMPACT OF NESTLE PHILIPPINES’ CORPORATE SOCIAL 
RESPONSIBILITY PROGRAMS ON CONSUMER 
BUYING BEHAVIOR: AN ASSESSMENT 
A The...
ii 
Philippine Copyright 2014 
by the Author 
and the 
Graduate School 
Polytechnic University of the Philippines 
All rig...
CERTIFICATION OF ORIGINALITY 
This is to certify that the research work presented in this dissertation entitled 
IMPACT OF...
ACKNOWLEDGEMENTS 
This thesis would not have been possible without the guidance and the help of 
several individuals who i...
ABSTRACT 
Title : Impact of Nestle Philippines’ Corporate Social 
Responsibility Programs on Consumer Buying Behavior: 
An...
Adviser : Mrs. Estelita Medina 
vi 
The Problem 
The main objective of the study was to assess the Impact of Nestle Philip...
vii 
Findings 
Based on the results obtained, it was revealed that fifty four point nineteen percent 
(54.19%) or 84 peopl...
viii 
Conclusions 
Based on the findings, it was concluded that the most number of respondents were 
at the age of 18 to 2...
knowing the factors to consider for the encouragement of brand purchase intention and 
even build-up of brand trust and br...
TABLE OF CONTENTS 
TITLE PAGE …………………………………………………………………………….i 
CERTIFICATE OF ORIGINALITY ……………………………………...………….iii 
ACKNO...
xi 
III. METHODOLOGY OF RESEARCH 
Method of Research ……………………………………………………………..39 
Population, Sample Size and Sampling Tec...
LIST OF TABLES 
Total Number of Respondents ………………………………………………………..…40 
Parameters for Awareness Level Check …………………………………...
Result of Nestle Philippines’ Corporate Social Responsibility Programs 
Awareness Level Check ……………………………………………………………….......
LIST OF FIGURES 
Conceptual Framework ………………………………………………..………….8 
xiv 
Survey Results 
Age ………………………………………………………………………………8...
Chapter 1 
THE PROBLEM AND ITS BACKGROUND 
xv 
Introduction 
Good governance has always been the object of anyone interest...
Filipinos. Its practice is particularly prevalent within and across families and kinship 
groups, and in church-related or...
constituents, crystallizing a sound relationship with the community, incorporating with 
the perspective of good governanc...
every organization as of time. That is why, the incorporation of Corporate Social 
Responsibility as a useful tool to enga...
Studies by Barone, Miyazaki, and Taylor (2000), Bhattacharya and Sen (2001), and 
Creyer and Ross (1997) suggested that co...
Afterwards, Donaldson and Dunfee (1994, 1999) extended and proposed an 
“Integrative Social Contract Theory” (ISCT) in ord...
attributions for achievement. Attributions are classified along three causal dimensions: 
locus of control, stability, and...
xxii 
Conceptual Framework 
Figure 1.Presents the conceptualized paradigm of the research work. 
IMPACT OF NESTLE PHILIPPI...
The above-showed figure illustrates the flow of the study underlying three major 
xxiii 
concerns: 
First is the Awareness...
xxiv 
2.3 Rural Development 
3. What is the impact of the Corporate Social Responsibility Programs on the 
consumer buying...
as Nestle Philippines innovates various techniques to reduce their water consumption and 
contribute to the water sustaina...
The researchers wish to include wider spectrum of respondents and more 
components to better justify the study but due to ...
Consumer Behavior is the behavior that consumers display in searching for, purchasing, 
using, evaluating, and disposing o...
Rural development generally refers to the process of improving the quality of life and 
economic well-being of people livi...
Chapter 2 
REVIEW OF RELATED LITERATURE AND STUDIES 
This chapter clearly presents the supporting literatures and studies ...
declared that: “in the modern commercial area, companies and their managers are 
subjected to well publicize pressure to p...
consumer attitude and behavior. In this thesis two studies were conducted to, firstly, gain 
an insight into the actual st...
Integrating CSR efforts into consumers' direct experience with your brand, and 
monitor their response to make sure your i...
unit increase in employee fairness perceptions translates to a price premium of about 
12%, and a similar increase in loca...
"Today, brands can confidently focus purpose messaging on both younger and 
xxxiv 
older consumers." 
"In countries where ...
decided that “doing good” is not only something we wish to do, but which was likely 
why our respective schools were start...
Then, it is responsibility-sharing. There are cases wherein companies involve the 
consumers in their CSR efforts. This co...
means for them to improve the issue they are motivated to ease. In short, more money to 
shell-out to cover this need. Wit...
businesses to embrace CSR. Because of this, it is possible that the spirit of CSR is often 
xxxviii 
lost. 
Nonetheless, d...
Aquino reasoned that corporate aid would help marginalized sectors to gain more 
purchasing power to buy the companies’ go...
the top caliber businessmen operating in the Philippines and to inspire others to follow 
suit to Corporate Social Respons...
quality books) said to me: “We are more concerned that our donations get to the neediest 
xli 
recipients than about tax d...
suppliers, creditors, trade unions, community members, consumers, government agencies, 
concerned non-governmental organiz...
disasters (e.g., Prestige shipwreck) which increased pressure on corporations through 
increased media coverage and increa...
intentions) (Vlachos et al., 2009). However, scholars have called for more empirical work 
in this area as most studies la...
xlv 
Local Studies 
In the Philippines, more consumers are willing to pay for goods and services 
offered by companies tha...
results the ambiguous direction of causality (meaning, does good corporate citizenship 
lead to better financial returns o...
point on a five-point scale, the consequent increase in share of wallet is approximately 
1.7 percentage points. The gain ...
About 55% of the respondents see CSR as an important factor that should be 
looked at when deciding which brands of produc...
They aim to keep their equipment free from bomb blasts, their executives’ safe, among 
others, "The community is our best ...
Synthesis and Relevance of the Reviewed Literature 
According to Kotler and Lee (2005), Corporate Social Responsibility is...
suggested that merchandises have societal and emotional characteristics and consumers 
develop emotional connections with ...
In connection with the above-mentioned explanation, the impact of Corporate 
Social Responsibility Programs in building a ...
Chapter 3 
METHODOLOGY OF RESEARCH 
This chapter contains the research method used, population, sampling design and 
sampl...
Buying behavior. Hence, the descriptive survey research method was adopted. 
Population, Sample Size and Sampling Techniqu...
lv 
Description of Subjects 
As mentioned above, consumer-beneficiaries of the Corporate Social 
Responsibility programs o...
Table 2 
Parameters for Awaness Level Check 
MARKA (Rating) MGA PANUKAT (Parameters) 
1 Lubos na May Nalalaman Fully Aware...
Table 4 
Parameters for Assessment of the Impact of Nestle Philippines’ CSR Programs on 
Consumer Buying Behavior 
MARKA (...
Time of answering is 4.96 minutes according to the computation done by the proponents. 
lviii 
(See Appendices for the res...
was done with the help of the University Statistician. Standard deviation was measured to 
determine the range of the resp...
Chapter 4 
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 
This chapter presents the results of the conducted study. It...
The apparent diversity of the maturity of the respondents reflects several 
implications in the study's findings. It can b...
college graduate, while forty five point sixty one percent (45.61%) or 70 of the subjects 
were secondary graduates and ni...
Table 10 
Result of Nestle Philippines’ Corporate Social Responsibility Programs 
Awareness Level Check 
lxiii 
Corporate ...
The table above shows the result of Nestle Philippines’ Corporate Social 
Responsibility Programs awareness level check. I...
Table 11 
Source of Awareness of Respondents with Nestle Philippines’ Corporate 
Social Responsibility Programs 
How did y...
Table 12 
Encounter Frequency of Respondents with Nestle Philippines’ Corporate 
Social Responsibility Programs 
How often...
Table 13 
Result of the Effectiveness of Nestle Philippines’ Corporate Social 
Responsibility Programs on Nutrition, Envir...
The aforementioned data show the result of the effectiveness of Nestle 
Philippines’ Corporate Social Responsibility Progr...
Table 14 
Result of the Impact of Nestle Philippines’ Corporate Social Responsibility 
Programs on Consumer Buying Behavio...
consumers-beneficiaries agreed that the company’s CSR programs establish a good brand 
rapport or brand equity. Thus, the ...
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT
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IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT

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The main objective of the study was to assess the Impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer Buying Behavior. It also sought to determine the level of awareness of the respondents towards the different Corporate Social Responsibility Programs of Nestle’ Philippines and to assess the effectiveness of the Corporate Social Responsibility Programs in terms of Nutrition, Environment, and Rural Development.

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IMPACT OF NESTLE PHILIPPINE'S CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT

  1. 1. IMPACT OF NESTLE PHILIPPINES’ CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT A Thesis Presented to the Faculty of College of Business Administration Polytechnic University of the Philippines Sta. Mesa, Manila In Partial fulfillment of the Requirements for the Degree in Bachelor of Science in Business Administration Major in Marketing Management KIMBERLY D. ABONGAN TRIXIA CAMILLE D. AGUILAR REYMART P. ARAZON CHEZKA MARIE M. NONATO AILEEN T. OLINIO ROCHELLE P. RELATOR LESLIE ANNE D. SEMPIO DIANA MAE A. SUGANOB CARL MARVIN P. YABUT March 2014
  2. 2. ii Philippine Copyright 2014 by the Author and the Graduate School Polytechnic University of the Philippines All rights reserved. Portions of this manuscript may be reproduced with proper referencing and due acknowledgement of the author.
  3. 3. CERTIFICATION OF ORIGINALITY This is to certify that the research work presented in this dissertation entitled IMPACT OF NESTLE PHILIPPINES’ CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT for the degree Bachelor of Science in Business Administration major in Marketing Management at the Polytechnic University of the Philippines embodies the result of original and scholarly work carried out by the undersigned. This dissertation does not contain words or ideas taken from published sources or written works that have been accepted as basis for the award of a degree from any higher education institution, except where proper referencing and acknowledgement were made. iii The Researchers ABONGAN, KIMBERLY AGUILAR, TRIXIA CAMILLE ARAZON, REYMART NONATO, CHEZKA MARIE OLINIO, AILEEN RELATOR, ROCHELLE SEMPIO, LESLIE ANNE SUGANOB, DIANA MAE YABUT, CARL MARVIN
  4. 4. ACKNOWLEDGEMENTS This thesis would not have been possible without the guidance and the help of several individuals who in one way or another contributed and extended their valuable assistance in the preparation and completion of this study. First and foremost, we would like to give our utmost gratitude to our college Dean, Dr. Leopoldo Francisco M. Bragas of College of Business for sharing us his knowledge as well as his patience and steadfast encouragement to complete this study; To our professor, Mrs. Estelita Medina, for being our mentor on this thesis paper who did reviews in spite of her busy schedule, made several important revisions and iv suggestions that really enhanced our study. To our parents who have been our source of inspiration as we hurdle all the obstacles in the completion of the write-up. We dedicate all our hardships and effort for their unselfish and unfailing moral and financial support. To our statistician Dr. Lincoln A. Bautista who made the computation of the results of statistical analysis possible, for aiding us step-by-step until the derivation of information and conclusion. Last but not the least, the one above all of us, the Omnipresent God, for answering our prayers and for giving us the strength to plod on despite of our constitution wanting to give up and throw in the towel, thank you so much Dear Lord. AK/ATC/AR/NCM/OA/RR/SLA/SDM/YCM
  5. 5. ABSTRACT Title : Impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer Buying Behavior: An Assessment Researchers : Kimberly D. Abongan Trixia Camille D. Aguilar Reymart P. Arazon Chezka Marie M. Nonato Aileen T. Olinio Rochelle P. Relator Leslie Anne D. Sempio Diana Mae A. Suganob Carl Marvin P. Yabut Degree : Bachelor of Science in Business Administration Major in Marketing Management Institution : Polytechnic University of the Philippines v Year : 2014
  6. 6. Adviser : Mrs. Estelita Medina vi The Problem The main objective of the study was to assess the Impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer Buying Behavior. It was also sought to determine the level of awareness of the respondents towards the different Corporate Social Responsibility Programs of Nestle’ Philippines and to assess the effectiveness of the Corporate Social Responsibility Programs in terms of Nutrition, Environment, and Rural Development. Research Methodology Descriptive Survey method was used. The survey was conducted at Makati City, San Juan City, Quezon City, Pasig City, Antipolo City, Tondo, and Las Piñas City using cluster sampling acquiring total 155 respondents. The data gathered were based on the tally of frequency and percentage. The resulting figures were presented in tables to be the basis of interpretation. Computation regarding the assessment of the effectiveness and impact of Nestle Philippines Corporate Social Responsibility Programs on Consumer Buying Behavior was done with the help of the University Statistician. Standard deviation was measured to determine the range of the respondents’ answer and the weighted mean was also acquired for the derivation of conclusion.
  7. 7. vii Findings Based on the results obtained, it was revealed that fifty four point nineteen percent (54.19%) or 84 people were between 18 to 25 years old, seventy one point sixty one percent (71.61%) or 111 of the respondents were female, forty five point eighty one percent (45.81%) or 71 of the respondents were college graduate, while sixty seven point seventy four percent (60.74%) or 105 respondents were students. The results of Nestle Philippines’ Corporate Social Responsibility Programs awareness level check clearly recorded that the respondents are less aware of company’s nutritional, environmental and rural development programs. The Source of Awareness of respondents with Nestle Philippines’ Corporate Social Responsibility Programs was illustrated. It was clearly noted that thirty one point sixty one percent (31.61%) or 49 respondents got aware with the company’s CSR programs through the school, while fifty seven point forty two percent (57.42%) or 89 of the respondents encountered these programs seasonal. Regarding the effectiveness of Nestle Philippines’ Corporate Social Responsibility Programs on Nutrition, it was founded that though the activities help the consumers to have a healthy body, it can be generalized that the Nestle Philippines’ Corporate Social Responsibility Programs are less effective in terms of Nutrition, Environment and Rural Development of consumer-beneficiaries. It was also revealed that consumer-beneficiaries agreed that the company’s CSR programs establish a good brand rapport or brand equity. Thus, the respondents slightly agreed that the initiatives do encourage brand switch and brand purchase intention, even create brand trust and brand loyalty.
  8. 8. viii Conclusions Based on the findings, it was concluded that the most number of respondents were at the age of 18 to 25 years old, female, college graduate as educational attainment and were students. It was also recorded that the consumer-beneficiaries are less aware of Nestle Philippines’ Corporate Social Responsibility Programs, though the activities help the consumers to have a healthy body, it was noted that the programs are less effective in terms of Nutrition, Environment and Rural Development. Respondents agreed that the company’s CSR programs establish good brand rapport or brand equity, thus, slightly agreed that these do encourage brand switch, hype brand purchase intention, create brand trust and brand loyalty. Therefore, Nestle Philippines’ Corporate Social Responsibility Programs have an impact on consumer buying behavior particularly on the establishment of brand equity to consumer-beneficiaries. Recommendations Based on the findings, conduction of researches regarding the perception of Filipinos about pro-health products is recommendable for this can serve as framework for businesses to cope with the demands of the consumers, supported by the concluded fact that programs mentioned above help the consumers to have a healthy body. Also, a comprehensive comparison among factors such as nutrition, environment and rural development would also be useful to determine what area should be tapped more to create a meaningful dialogue with the customers, and a clearer study on how to further the brand equity established within consumers would also be helpful to aid marketers to
  9. 9. knowing the factors to consider for the encouragement of brand purchase intention and even build-up of brand trust and brand loyalty. The proponents also wish for practitioners to improve brands’ relationship with the students who would be the first individuals to recommend products to friends and members of the family. Moreover, a more frequent holding of CSR programs would be helpful in the establishment of strong tie with consumers which could probably result to increasing brand purchase intention and could trigger the creation of brand trust and ix build-up of brand loyalty. For the improvement of the study, the researchers look forward that aside from the factors considered in profiling such as age, gender, educational attainment and occupational state, other important variables such as level of income and social class can be included for these are also supportive in assessing more the impact of Nestle Philippines’ Corporate Social Responsibility Programs on consumer buying behavior. Another is the pursuit to conduct the study in Lipa, Batangas which said to be the home of the company’s CSR programs to clearly assess the Impact of Nestle Philippines Corporate Social Responsibility Programs on Consumer Buying Behavior.
  10. 10. TABLE OF CONTENTS TITLE PAGE …………………………………………………………………………….i CERTIFICATE OF ORIGINALITY ……………………………………...………….iii ACKNOWLEDGEMENT ……………………………………………………………..iv ABSTRACT …………………………………………………………………..….……....v TABLE OF CONTENTS ………………………………………………………….........x I. THE PROBLEM AND ITS BACKGROUND Introduction ……………………………………………………………………….1 Background of the Study …………………………………………………………3 Theoretical Framework …………………………………………………………...5 Conceptual Framework …………………………………………………………...8 Statement of the Problem …………………………………………………………9 Significance of the Study ………………………………………………………..10 Scope and Limitations …………………………………………………………...11 Definition of Terms ……………………………………………………………...12 II. REVIEW OF RELATED STUDIES AND LITERATURE Foreign Literature ……………………………………………………………….15 Local Literature …………………………………………………………….……20 Foreign Studies………………………………………………………….……….28 Local Studies …………………………………………………………………….31 Synthesis and Relevance of the Reviewed Literature ………………………...…36 x
  11. 11. xi III. METHODOLOGY OF RESEARCH Method of Research ……………………………………………………………..39 Population, Sample Size and Sampling Technique ……………………..………40 Description of Subjects ………………………………………………………….41 Research Instrument ……………………………………………………….…….41 Validation of the Research Instrument …………………………………….……43 Data Gathering Procedure ……………………………………………………….44 Statistical Treatment of Data …………………………………………………....44 IV. PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA ………46 IV. CONCLUSIONS AND RECOMMENDATIONS Summary ………………….……………………………………………………..57 Findings …………………………………………………………………............58 Conclusions ……………………………………………………………………...62 Recommendations ……………………………………………………………….64 BIBLIOGRAPHY ……………………………………………………………………...66 APPENDICES ………………………………………………………………………….70 CURICCULUM VITAE ……………………………………………………………….88
  12. 12. LIST OF TABLES Total Number of Respondents ………………………………………………………..…40 Parameters for Awareness Level Check …………………………………………….......42 Parameters for the Degree of Effectiveness of Nestle Philippines’ CSR Programs on Nutrition, Environment and Rural Development ……………………42 Parameters for Assessment of the Impact of Nestle Philippines’ CSR Programs on Consumer Buying Behavior …………………………………………43 Basis for Statistical Interpretation and Discussion ……………………………………...45 Age of Respondents ……………………………………………………………………..46 Gender of Respondents ………………………………………………………………….47 Educational Attainment of the Respondents …………………………………………….47 Occupational State of the Respondents ………………………………………………....48 xii
  13. 13. Result of Nestle Philippines’ Corporate Social Responsibility Programs Awareness Level Check ………………………………………………………………....49 Source of Awareness of Respondents with Nestle Philippines’ Corporate Social Responsibility Programs ……………………………………………...51 Encounter Frequency of Respondents with Nestle Philippines’ Corporate Social Responsibility Programs ……………………………………………...52 Result of the Effectiveness of Nestle Philippines’ Corporate Social Responsibility Programs on Nutrition, Environment and Rural Development of Consumer-Beneficiaries ……………………………………53 Result of the Impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer Buying Behavior ………………………………55 Pilot Run Results ………………………………………………………………………..73 xiii
  14. 14. LIST OF FIGURES Conceptual Framework ………………………………………………..………….8 xiv Survey Results Age ………………………………………………………………………………82 Sex ……………………………………………………………………………….82 Educational Attainment …………………………………………………………83 Occupational State ………………………………………………………………83 Source of Awareness of Respondents with Nestle Philippines’ Corporate Social Responsibility Programs ……………………………………...84 Encounter Frequency of Respondents with Nestle Philippines’ Corporate Social Responsibility Programs ……………………………………...84
  15. 15. Chapter 1 THE PROBLEM AND ITS BACKGROUND xv Introduction Good governance has always been the object of anyone interested in the proper management of their organization, including their dealings with all their publics, particularly their students and parents, alumni, their employees, and the communities around them. For schools, on the main, this has meant providing scholarships and grants-in- aid for their faculty, staff and deserving students, philanthropy for various causes, and for many, a willingness to respond to situations which require their assistance or intervention. An organized process of taking care of all their publics, which should somehow also redound to some benefit to their bottom line, but particularly involvement in projects and activities which go beyond their immediate area — this is the kind of Corporate Social Responsibility which we all hope to have, where likely out of our values and hopefully something more, we have decided that “doing good” is not only something we wish to do, but which was likely why our respective schools were started by their founders in the first place. Now, there are norms and approaches which are available which can assist us do all these not only in a viable way, but in ways which are verifiable, and which become part and parcel of our organized, daily way of conducting our work. Philanthropy has been a tradition in the Philippines, where individual giving and volunteerism are acknowledged to be “hidden forces” in the social and economic life of
  16. 16. Filipinos. Its practice is particularly prevalent within and across families and kinship groups, and in church-related organizations or social welfare agencies which undertake such activities as Sunday collections, social events, fund drives “for-a-cause” like “Piso para sa pasig”, the solicitation of donations, special fund campaigns (Christmas fund xvi drives) and disaster relief operations. According to M.A. Velasco of the Center for the Study of Philanthropy, the notion of philanthropy and concern for humanity form part of the Asian psyche. In the Philippines, mutual aid is manifested in rural traditional communities. For example, the spirit of “Bayanihan” (a Philippine tradition which entails ‘brotherhood’) is exemplified in the lending of mutual assistance. It is rooted in a deep sense of mutual respect. The bayanihan tradition was cited by Philacor, the Philippines’ leading manufacturer of refrigerators, washing machines and the like, for its decision to practice corporate citizenship. The company reported a threefold growth in actual returns to shareholders within a year after implementing Corporate Social Responsibility activities. The Philacor example supports the hypothesis that economic and ethical motives and benefits are not fundamentally opposed to each other but may actually be reconciled. Meaning, doing business is no longer just the survival of the fittest. Corporations need to give back something to the communities that support their services and programs (Soliman, 2013). That is why at present, it was adopted as a “best practice”, absorbed into the core functions and value systems of businesses. It is now considered the soul of capitalism, as it makes corporations aware of the fact that doing business is not just the bottom line. That it is no longer being concern only on the mass production of goods or giving beneficial services thus, more on having a meaningful dialogue with a wide spectrum of
  17. 17. constituents, crystallizing a sound relationship with the community, incorporating with the perspective of good governance and competitiveness, concerning to the environmental sustainability and ecological balance, and doing relevant activities for public wellness as of creating shared values which is the fundamental part of corporations xvii at today’s era. Background of the Study Today, companies face their toughest competition ever. Moving from a product-and- sales philosophy to a holistic marketing philosophy, however, gives them a better chance of outperforming the competition. The cornerstone of a well-conceived holistic marketing orientation is strong customer relationships. Marketers must connect with customers—informing, engaging, and maybe even energizing them in the process. (Kotler and Keller, 2009) Understanding consumer buying behavior is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high-quality customer data and enabled by it” (Buttle, 2004). Customers keep the organization standing in a society. Without customer relationship an organization will not survive and will not be successful in their field. Customers provide the ‘life-blood’ to the organization in terms of competitive advantage, revenue and profits. In spite of the competition an organization must keep their products on top and of good quality because that’s what the customers are looking for. Their reactions and suggestions are merely important to assessing the status of the business in the industry. Their brand perception is actually significant for
  18. 18. every organization as of time. That is why, the incorporation of Corporate Social Responsibility as a useful tool to engage with consumers through environmental and social projects and is, moreover, an effective marketing tool which gains more and more popularity within companies is now getting on trend. Many studies have attested the collective impact of multiple CSR strategies on consumer attitudes. For example, Brown and Dacin (1997) have examined the combined influence of various CSR actions, which are support for causes, contributions to the community, and environmental concern, finding that “CSR associations influence product attitudes through their influence on overall company evaluations”. Murray and Vogel (1997) have investigated the effect of associated CSR practices on consumers and presented similar findings. The CSR activities mentioned in the research are, for instance, environmental protection practices(energy conservation), engagement in acts to promote human welfare, corporate social marketing (electric safety education for schoolchildren), contribution to the economic development of the region, and consumer protection program. Their research found that CSR programs lead to improved customer attitudes towards the firm, including beliefs about the company’s honesty, consumer responses, and increased support for the firm in labor or government disputes. Correspondingly, Bhattacharya and Sen (2001) argued that a company’s efforts in multiple CSR domains, for example community involvement, support for ethical involving issues like women, ethnic minorities, gays and lesbians, disabled minorities, and so on had a direct effect on the attractiveness of the company’s products, in addition to a positive effect on company evaluations by customers. Bhattacharya and Sen (2004) have noted that consumers engaged in positive word of mouth about firms that were committed to CSR actions. xviii
  19. 19. Studies by Barone, Miyazaki, and Taylor (2000), Bhattacharya and Sen (2001), and Creyer and Ross (1997) suggested that consumers are willing to actively support companies committed to cause-related marketing, environmentally friendly practices and that CSR practices have an impact on customer purchase intention. Overall, the above-mentioned studies provide evidence supporting the suggestion that socially responsible companies are likely to be perceived more favorably by consumers than less socially responsible companies. Indeed, the researchers aim to assess and to have a deeper understanding of the impact of corporate social responsibility programs particularly of Nestle on consumer buying behavior in Philippine setting. This study focuses on how the company’s designed cosmetic activities may have affected the consumers’ brand loyalty and trust, its effect on their perception of brand equity and xix purchase intention. Theoretical Framework One of the studies that anchor this present work is the Donaldson’s (1982) Integrative Social Contract Theory. With this, he considered the business and society relationship from social contract tradition, mainly from the philosophical thought of Locke. He assumed that a sort of implicit social contract between business and society exists. This social contract implies some indirect obligations of business toward society. This approach would overcome some limitations of deontological and teleological theories to business.
  20. 20. Afterwards, Donaldson and Dunfee (1994, 1999) extended and proposed an “Integrative Social Contract Theory” (ISCT) in order to take into account the socio-cultural context and also to integrate empirical and normative aspects of management. Applied to the study, the meaningful contract between the businesses and the society is getting more significant. The organizations are now being concern with the society they do belong with – realizing that aside from doing their operations, there is a more relevant activity to do, and this is to serve the community. Another supporting principle is the Attribution Theory developed by Weiner. It is concerned primarily with how individuals interpret events and how this relates to their xx thinking and behavior Heider (1958) was the first to propose a psychological theory of attribution, but Weiner and colleagues (e.g., Jones et al, 1972; Weiner, 1974, 1986) developed a theoretical framework that has become a major research paradigm of social psychology. Attribution theory assumes that people try to determine why people do what they do, i.e., attribute causes to behavior. A person seeking to understand why another person did something may attribute one or more causes to that behavior. A three-stage process underlies an attribution: (1) the person must perceive or observe the behavior, (2) then the person must believe that the behavior was intentionally performed, and (3) then the person must determine if they believe the other person was forced to perform the behavior (in which case the cause is attributed to the situation) or not (in which case the cause is attributed to the other person). Weiner focused his attribution theory on achievement (Weiner, 1974). He identified ability, effort, task difficulty, and luck as the most important factors affecting
  21. 21. attributions for achievement. Attributions are classified along three causal dimensions: locus of control, stability, and controllability. The locus of control dimension has two poles: internal versus external locus of control. The stability dimension captures whether causes change over time or not. For instance, ability can be classified as a stable, internal cause, and effort classified as unstable and internal. Controllability contrasts causes one can control, such as skill/efficacy, from causes one cannot control, such as aptitude, xxi mood, others' actions, and luck. Attribution theory is closely associated with the concept of motivation. It also relates the work done on script theory and inferencing done by Schank. In connection to the study, the initiative of companies that does corporate social responsibility programs as motivating mechanism is the main factor considered in this research. At this point, the implementation of these cosmetic activities to encourage consumers can be taken as an example to clearly explain the Attribution theory of Weiner.
  22. 22. xxii Conceptual Framework Figure 1.Presents the conceptualized paradigm of the research work. IMPACT OF NESTLE PHILIPPINES’ CORPORATE SOCIAL RESPONSIBILITY PROGRAMS ON CONSUMER BUYING BEHAVIOR: AN ASSESSMENT AWARENESS EVALUATION EFFECTS OF NESTLE PHILIPPINES’ CORPORATE SOCIAL RESPONSIBILITY IMPACT OF NESTLE PHILIPPINES’ CORPORATE SOCIAL RESPONSIBILITY Checking the level of awareness of the respondents towards the different Corporate Social Responsibility Programs of Nestle’ Philippines. Assessment of the effectiveness of Nestle Philippines’ Corporate Social Responsibility Programs in terms of Nutrition, Environment, and Rural Development? BRAND EQUITY BRAND SWITCH BRAND PURCHASE INTENTIONS BRAND TRUST BRAND LOYALTY
  23. 23. The above-showed figure illustrates the flow of the study underlying three major xxiii concerns: First is the Awareness Evaluation which consists of the presentation of the Nestle Philippines’ different Corporate Social Responsibility programs that will be evaluated by the respondents. This will be the guiding point towards assessing the effects of the CSR activities to consumers’ Nutrition, also to Environment and to Rural Development which is the second area of concern of this study. It aims to determine the rate of its corollary to consumers’ related life aspects prior their consumer buying behavior. Lastly, is the measurement of the impact of the Corporate Social Responsibility programs of Nestle Philippines’ on Consumer Buying Behavior and specific areas which may have affected like brand loyalty and trust, its effect on their perception of brand equity and purchase intention. Statement of the Problem The study was focused on the Impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer Buying Behavior. It also sought to answer the following: 1. What is the level of awareness of the respondents towards the different Corporate Social Responsibility Programs of Nestle’ Philippines? 2. How do the respondents assess the effectiveness of the Corporate Social Responsibility Programs in terms of: 2.1 Nutrition; 2.2 Environment; and
  24. 24. xxiv 2.3 Rural Development 3. What is the impact of the Corporate Social Responsibility Programs on the consumer buying behavior? Significance of the Study Consumer buying behavior is not a new-fangled concept but it is convalescing day by day with changing ecology. Studying consumer buying behavior is very decisive aspect of marketing. That’s why it is so much relevant to assess how this particular aspect of consumers is affected by Corporate Responsibility Programs of business organizations today. This research will confidently be a useful tool to different individuals and organizations like as follows. Nestle Philippines is of course the first to benefit with this study. The recognition of their societal concern will attract more customers and will prefer their products more thinking that in one way or the other the procurement of Nestle products can improve lives and cause environmental sustainability and rural development. Also the government will have an opportunity to coordinate with the projects of the company. The increasing number of economic problems is no longer a joke, thus for them needing an integrated relationship with businesses like Nestle Philippines who shares its blessings with those who need its help the most – the hardworking farmer, the promising student, the malnourished child, the calamity victim, the unemployed, and the other less fortunate people in the communities where the Company operates. The environmental organizations will also have gains from this. The discovery of a new partner to settle the predicaments concerning ecological imbalance is a great help
  25. 25. as Nestle Philippines innovates various techniques to reduce their water consumption and contribute to the water sustainability for future use. One step is the reuse of sealing water for vacuum pumps. They also treat waste water in their Reverse Osmosis Plants to reduce the disposal of waste water in rivers and streams. The treated waste water is used for irrigation of plants, water for fish ponds, and other cleaning purposes. They also installed Wastewater Treatment Plants in all their factories to prevent the contamination of natural xxv waterways (Nestlé Philippines, 2011). Moreover, this may serve as a reference for students in their future research work and as guide relative to corporate social responsibility and/or consumer brand preference studies. Lastly, it will be an eye-opener to Filipinos that it is not only about getting benefits from Nestle Philippines’ creating shared value programs but also being responsible and concern enough in lessening the issues confronting Philippines. Scope and Limitations With the numerous benefits of this research work this will only cover Nestle Philippines only not the Nestle Global as a whole. It deals with the impact of Nestle Philippines’ Corporate Social Responsibility on consumer buying behavior in Philippine setting. This study focuses on how the company’s designed cosmetic activities may have affected the consumers’ brand loyalty and trust, its effect on their perception of brand equity and purchase intention. The observational phase under the residence of the researchers will be conducted, including the households as respondents to be carried on by the whole semester.
  26. 26. The researchers wish to include wider spectrum of respondents and more components to better justify the study but due to limited time, financial constraint and conflict on class schedule, these things were not be done. Eventually, a comprehensive assessment of the Impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer Buying Behavior will be published. xxvi Definition of Terms The following terms were defined as used in the title, statement of the problem and other significant parts of the research work. Brand Awareness is the extent to which the consumer associates the brand with the product that they wish to purchase. It is the brand recall and the brand recognition of the company to the consumers. It is an essential part of brand development which helps the brand to stand out from the others in this monopolistically competitive market. Brand Equity is the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself. Brand Loyalty is a result of consumer behavior and is affected by a person's preferences. Loyal customers will consistently purchase products from their preferred brands, regardless of convenience or price. Brand Purchase intention is the implied promise to one’s self to buy the product again whenever one makes next trip to the market. Brand Switch is the changing of support and conviction for one brand to a competing brand.
  27. 27. Consumer Behavior is the behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy xxvii their needs. Consumer Loyalty is the likelihood of previous customers to continue to buy from a specific organization. Great attention is given to marketing and customer service to retain current customers by increasing their customer loyalty. Consumer Perceived Value is the anticipated benefit from a consumer's perspective of a product or service. The customer perceived value stems from tangible, psychological and social advantages, and since it affects demand for a product, it needs to be taken into account when setting prices. Corporate Social Responsibility is the company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship through their waste and pollution reduction processes, by contributing educational and social programs, and by earning adequate returns on the employed resources. Nutrition is the process of providing or obtaining the food necessary for health and growth Philanthropy etymologically means love of humanity in the sense of caring for, nourishing, developing, and enhancing what it is to be human on both the benefactors by identifying and exercising their values in giving and volunteering and beneficiaries by benefitting parts. Philacor is the divisional name for the ten industry shops, which are located throughout the Philadelphia Prison System.
  28. 28. Rural development generally refers to the process of improving the quality of life and economic well-being of people living in relatively isolated and sparsely populated areas. Sustainability is a business strategy that drives long-term corporate growth and profitability by mandating the inclusion of environmental and social issues in the xxviii business model.
  29. 29. Chapter 2 REVIEW OF RELATED LITERATURE AND STUDIES This chapter clearly presents the supporting literatures and studies regarding the nature and importance of Corporate Social Responsibility and how this concept primarily affects the buying behavior of consumers, specifically in Philippine setting. xxix Foreign Literature A growing number of writers however have recognized that the activities of an organization impact upon the external environment and have suggested that one of the roles of accounting should be to report upon the impact of an organization in this respect. Such a suggestion first arose in the 1970’s and a concern with a wider view of company performance is taken by some writers who evince concern with the social performance of a business, as a member of society at large. Indeed the desirability of considering the social performance of a business has not always however been accepted and has been the subject of extensive debate. Thus, Hetherington (1973) states that, “There is no reason to think that shareholders are willing to tolerate an amount of corporate non-profit activity which appreciably reduces either dividends or the market performance of the stock.” Conversely, writing at a similar time, Dahl (1972) states “....every large corporation should be thought of as a social enterprise; that is an entity whose existence and decisions can be justified insofar as they serve public or social purposes.” Similarly, Carroll (1979), one of the early CSR theorists states that: “business encompasses the economic, legal, ethical and discretionary expectations that society has of organization at a given point in time”. More recently this was echoed by Balabanis, Phillips and Lyall (1998), who
  30. 30. declared that: “in the modern commercial area, companies and their managers are subjected to well publicize pressure to play an increasingly active role in the welfare of xxx society.” Some writers have taken the view that a corporation should not be concerned with social responsibility and certain to come across the statement from Milton Friedman, made in 1970:“there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” Equally, some people are more cynical in their view of corporate activity. So Drucker (1984) had the opinion that: “business turns a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth.” While Robertson and Nicholson (1996) thought that: “a certain amount of rhetoric may be inevitable in the area of social responsibility. Managers may even believe that making statements about social responsibility insulates the firm from the necessity of taking socially responsible action.” Moir (2001) is more ambivalent: “whether or not business should undertake CSR, and the forms that responsibility should take, depends upon the economic perspective of the firm that is adopted”. Corporate social responsibility (CSR) is a useful tool for companies to engage in environmental and social projects and is, moreover, an effective marketing tool which gains more and more popularity within companies. However, CSR communication is a difficult undertaking because it bears a variety of threats and opportunities. For this reason the right CSR communication strategy is essential to effectively influence
  31. 31. consumer attitude and behavior. In this thesis two studies were conducted to, firstly, gain an insight into the actual status of CSR in the Netherlands and, secondly, to analyze how the degree of pro-activity in a company’s CSR communication strategy influences consumer attitude and, finally, consumer behavior. In the study about the general insight about CSR in the Netherlands it was found that Dutch consumers have a positive attitude regarding CSR and are interested in this topic. They see companies, the government but also themselves in obligation to contribute in environmental and social causes. Dutch consumers state that they already have some knowledge about environmental and social topics but are also interested to get more information about these topics. The second study showed that a more reactive communication strategy compared to a more proactive communication strategy has got a more positive impact on consumer attitude and behavior because it reduces consumer skepticism and it increases the company’s image and the perceived intrinsic motives. Moreover, it partly reduces the consumers’ perceived extrinsic motives for the company’s engagement. This positive attitude showed to go along with positive consumer behavior like increase Word-of-Mouth (WoM) about the company in general as well as over its CSR engagements and the consumers’ purchase behavior. It was also found that consumer attitude towards the companies CSR communication was more positive when the project the company engages in fits with the company’s image. Due to the high interest and positive consumer attitude companies should start or increase their engagement in CSR. Due to the fact that a more reactive communication strategy has got better effects on consumer attitude and behavior, it is advised that companies should use this kind of communication strategy (Schiefelbein, xxxi 1999).
  32. 32. Integrating CSR efforts into consumers' direct experience with your brand, and monitor their response to make sure your initiatives and your message resonate with them. Recognize that just because you spend money on CSR initiatives does not mean the consumer will think it's fair to charge higher prices. But don't shy away from CSR initiatives that have real meaning to consumers even if they are expensive, because the returns in customer loyalty are substantial enough to more than cover those costs. First, all four dimensions of CSR performance -- environmental friendliness, treating employees fairly, community support, sourcing from local growers and suppliers -- positively influence consumers' attitudes toward a retailer. But consumers seem to modify their purchase behavior only when the CSR domain directly affects their actual experience with the company or brand. In our context, broad initiatives like environmental friendliness and community support build only goodwill, but initiatives like offering locally sourced products and fair employee compensation -- actions related directly to the products and people that consumers face -- bring both goodwill and a xxxii higher share of wallet from consumers. Second, this economic return is significant and meaningful. For instance, if a retailer is able to improve consumers' perception of its fair treatment of employees by one point on a five-point scale, the consequent increase in share of wallet is approximately 1.7 percentage points. The gain from a similar improvement in local sourcing is even more pronounced at more than 2 percentage points. These numbers appear small, but they represent a sales lift of 10% to 15% for the average retailer in our study. Third, if a retailer chose to leverage its improved CSR perception into higher prices rather than higher share of wallet, the calculations from our model show that a one-
  33. 33. unit increase in employee fairness perceptions translates to a price premium of about 12%, and a similar increase in local product sourcing translates to a price premium of xxxiii about 16%. Fourth, much, but not all, of this benefit is direct: Consumers patronize the company because they see personal benefits from the CSR initiatives and because the initiatives resonate with their own values. But an indirect benefit can occur through consumers' perception of how fair the company's prices are. Consumers don't just respond to the price charged; they also respond to how fair they think the price is. High prices are considered fairer if they can be attributed to "good" motives like CSR efforts or costs rather than to "bad" motives like profit-taking. We find that as much as 15% of the share-of -wallet gain from the perception of employee fairness accrues through improved perceptions of price fairness. Like the direct effect, this indirect benefit is not equal across different CSR initiatives. There is no indirect benefit of local product sourcing -- indeed, price fairness perceptions are not better for companies that offer locally produced products (Ailawadi, 2000). Half of global consumers are willing to pay more for goods and services from companies that have implemented programs to give back to society, an increase of 5 percentage points from 2011, according to a new study from Nielsen. "While cause-marketing programs seem to resonate most strongly among younger respondents, the rapid change in sentiment among middle-aged consumers expands the cause opportunity for brands," said Nic Covey, vice president of corporate social responsibility at Nielsen.
  34. 34. "Today, brands can confidently focus purpose messaging on both younger and xxxiv older consumers." "In countries where skepticism toward corporate social responsibility runs high, cause-marketers face an uphill battle," Covey said. "In these markets, especially, social-impact programs must be incontestably authentic to a company's business objectives, vision and values." Speaking of giving back to society, several markets indicated a high willingness to pay more for products and services from companies that give back, but lower rates of experience in actually paying more - potentially indicating, according to Covey, "markets that are uniquely ripe for cause-marketing programs" (Nationmultimedia.com) Local Literature Good governance has always been the object of anyone interested in the proper management of their organization, including their dealings with all their publics, particularly their students and parents, alumni, their employees, and the communities around them. For schools, on the main, this has meant providing scholarships and grants-in- aid for their faculty, staff and deserving students, philanthropy for various causes, and for many, a willingness to respond to situations which require their assistance or intervention. An organized process of taking care of all their publics, which should somehow also redound to some benefit to their bottom line, but particularly involvement in projects and activities which go beyond their immediate area — this is the kind of CSR which we all hope to have, where likely out of our values and hopefully something more, we have
  35. 35. decided that “doing good” is not only something we wish to do, but which was likely why our respective schools were started by their founders in the first place. Now, there are norms and approaches which are available which can assist us do all these not only in a viable way, but in ways which are verifiable, and which become part and parcel of our organized, daily way of conducting our work. The Philippines is home to a multitude of corporations, of differing scales and trades, both international and local in nature. Due to this, the economic development of the country has been progressing at a notable rate. To maintain the financial advancement currently enjoyed by the country, the Philippines must be on par with the global market trends. Corporate Social Responsibility (CSR) accounts for one of these business xxxv directions. The essence of CSR is encapsulated within its three words. Despite being universally understood as a company’s course of action towards aligning their business strategies with the improvement of the public’s welfare, the implementation of CSR in the country has taken various forms. The paragraphs below briefly presents four of the most prevalent directions corporations take when acting upon its CSR. Primary is dole outs. In this setting, companies provide financial support to the third sector. More often than not, it presents limited to no company engagement after the monetary aid is granted so long as the donation is used for the benefit of the common good or a certain project. Though the benefactor may ask for the project’s progress report, the beneficiary, normally a non-government organization (NGO) or a commune is given the power to carry out its tasks with no donor consultation. A manifestation of this may include a corporation giving a check in the name of philanthropy.
  36. 36. Then, it is responsibility-sharing. There are cases wherein companies involve the consumers in their CSR efforts. This concept of responsibility sharing allows for their patrons to be part of the solution for the problem the company wishes to alleviate. Here, the firm informs their consumers of the crisis, and asks them to partake in its attempt to solve it. An example of this scenario is that of a commercial airline in the Philippines. Together with the World Wide Fund for Nature (WWF), travellers are urged to offset the carbon emission of their flight by donating a minimal amount to the aforementioned non-profit organization. The collated donations are then directed to a specific project site that concentrates on mitigating as well as adapting to the effects of climate change. Next is financial allotment and employee involvement. A number of companies have opted to involve their employees in their CSR efforts. Coupled with allocating budget to carry out the task of improving lives, management empowers their workforce to be engaged. This tactic often forms part of a company’s employee retention program. It allows the workforce to experience work on the ground, hence creating a sense of affinity towards the community-building program, and ultimately a loyalty of some sort towards xxxvi the company. Last is the revamping the system. While there has been much debate on this, corporations have committed to reviewing their business processes. This type may come in the form of “greening the supply chain” as to lessen the carbon emissions of their industry or choosing to adopt community-based products to aid in local trade. The scenarios above indicate a lot of work. And for businesses, work means investing in additional manpower, a wider workspace, office equipment, to name a few. If not the former, it means supplying a charitable institution or a community with the
  37. 37. means for them to improve the issue they are motivated to ease. In short, more money to shell-out to cover this need. With this added financial burden to a company’s bottom line, xxxvii why be involved in CSR? Although the Philippine government has been conducting sessions on requiring companies based in the country to aid in nation building through CSR activities, as of the moment, the proposed ruling hasn’t been passed into law, therefore non-binding. With the non-compulsory state of CSR in the country, we once again ask the question of why invest in CSR. Though CSR activities may be translated to tax breaks, these efforts in the Philippines are often a combination of corporate ‘altruism’ and a marketing approach. Companies who act upon their task of giving back to the community usually craft their activities based on the sector of society wherein their products are centered on. For example, publishing houses are often involved in the enhancement of education or tree planting. The food industry advocates for the improvement of health and nutrition especially amongst the lower stratum of the population. In addition, construction firms work towards the building of homes for the homeless. Corporations focus on the area wherein their expertise is most applicable. This method for CSR provides for the exposure of the company not only through depicting a positive image due their involvement in the improvement of lives, but also for advertising of whatever item the company manufactures. For instance, a drug company who organizes a medical mission will naturally use their products for the beneficiaries. They may also opt to distribute the medicines they produce in hopes that those who receive them will patronize it. This ‘hitting two birds with one stone’ approach has led many
  38. 38. businesses to embrace CSR. Because of this, it is possible that the spirit of CSR is often xxxviii lost. Nonetheless, despite the intentions of the companies, one cannot deny that the CSR efforts corporations perform play a part in the enhancement of lives. The factor that separates CSR endeavors from each other is the depth of involvement. Ideally, deeds implemented by companies should uphold sustainability. Sustainability in a sense that, should the company put a stop on the program for whatever reason the beneficiaries should be able to continue the undertaking. In effect, CSR should embody the quote “give a man a fish and he will eat for one day, but teach a man to fish and he can eat for a lifetime”. With that, education should be an integral component to the aforementioned enterprise (Bretaña, 2011). “The people’s buying power grows, your businesses grow, the market grows, and everybody wins!” President Aquino arguing that companies not just to outdo each other in marketing and advertising, but in corporate social responsibility as well. He reasoned that corporate aid would help marginalized sectors to gain more purchasing power to buy the companies’ goods and services. Aquino was urging companies, during the 11th CSR Expo and Conference of the League of Corporate Foundations, not just to outdo each other in marketing and advertising, but in corporate social responsibility as well. “Many of us see, in traditional and social media, how your companies compete for attention and patronage by outspending each other in advertising and marketing. It would be nice to see a spending war in the area of corporate social responsibility. As well,” said Aquino.
  39. 39. Aquino reasoned that corporate aid would help marginalized sectors to gain more purchasing power to buy the companies’ goods and services. He noted that corporations should not separate their marketing operations from consumers and government, calling for corporations to tie up with government to come xxxix up with CSR programs in the future. “Let us talk. We will always be ready to work with corporations that want to go the extra mile to reach out and empower the people in their respective communities. We have always been about inclusive growth, and have always believed that a country must move forward together,” the President said (GMA Network, 2013) The leaders of some of the largest corporations in the Philippines at the time of massive demonstration in the early 1970 following the imposition of Martial Law and the adverse effect of oil shock that brought the Global Financial crisis pushed more Filipino families into poverty. Thus in year 2000 onwards, pushed by new challenges such as increasingly critical consumers of products and services who demand more from the companies that produce them. Companies are now being scrutinized as never before and they are made to measure up to standards of environmental sustainability, ethical behavior and governance structures. Questions arise on what else they can do to make poverty history given their access to talent, resources, technology, information and capital. The quality of the company’s response to these questions - the way they express corporate social responsibility - has become as much of an asset as brands, plants and cash. Fortunately, many corporations are already responding to these challenges. The battle cry now from
  40. 40. the top caliber businessmen operating in the Philippines and to inspire others to follow suit to Corporate Social Responsibility to wit: “Corporate Social Responsibility or “CSR” is doing your business responsibly. It is going beyond compliance to the law, by becoming the supplier or service provider of choice (provision of quality goods and services), employer of choice (fair to employees, compliance with labor laws) and neighbor of choice (going beyond business to serve their communities through corporate citizenship).”– Jaime Augusto Zobel de Ayala, Chairman, Ayala Corporation. CSR is about giving back to the communities that we serve, sharing with the less fortunate and being able to help our fellow countrymen. CSR of the past was more of just philanthropy. But over the years, it has taken on a different meaning – all good citizens should be involved in social responsibility (Emeritazornosa, 2010). CSR (corporate social responsibility) is getting more and more popular. A few years ago, most people had not heard of CSR. Today, it is a buzz-word in corporate circles. It would be almost unthinkable for a corporation not to be involved in some form of CSR. Most corporations realize that it’s not only good to give back to society but it’s vital for a corporation to have an active CSR program. Lots have been written on how CSR helps corporations in terms of profitability. However, in dealings with different corporations on behalf of Goducate, Many say that most of them do not look on CSR as a means to get a tax saving or publicity. The vast majority are more concerned that their donation reaches the ones who really need the help – whether or not they get a tax exemption or publicity. It is so encouraging to see that most of the hard-nosed business leaders have real social responsibility! As Sam Yeo, the Financial Director of Tien Wah Press (one of the world’s largest printers of high xl
  41. 41. quality books) said to me: “We are more concerned that our donations get to the neediest xli recipients than about tax deductions.” He realizes that the neediest recipients are usually found outside the wealthy city of Singapore where his company operates. Therefore, when he helps the really needy people in another country, his company will not get much publicity (if any at all!). Furthermore when his company helps an organization like Goducate it will not get any tax exemptions because Goducate is not a tax-exempt organization. He is fully aware that Goducate chose not to apply for tax-exempt status in Singapore because it would then have to spend the majority of its funds in Singapore which has one of the highest per capital earnings in the world. Building, maintaining and expanding a business takes a toll on society and the environment, which is why plenty of corporate entities engage, not only in profit-generating practices, but also in socially responsible programs. Enterprises give back to the community for a variety of reasons, such as to improve the living standards of their patrons, to make the economy they’re part of a healthier one, and to mitigate their environmental impact. This way, they can be assured that their business is sustainable. Corporate Social Responsibility is the way to accomplish this. In its most basic definition, CSR is a business entity’s contribution to the development of a society. According to the International Institute for Sustainable Development, key areas that CSR addresses are “environmental protection and the wellbeing of employees, the community and civil society in general, both now and in the future.” When a company takes it upon itself to commit to a certain responsible investment, it effectively communicates to its stakeholders—investors, employees,
  42. 42. suppliers, creditors, trade unions, community members, consumers, government agencies, concerned non-governmental organizations and the public sphere—that it recognizes the importance of social welfare and can be counted on to be part of the solution, make xlii ethical decisions and do the right thing. Society at large benefits greatly with different CSR efforts by being ensured of product safety and quality, having access to corporate-sponsored community education, employment, housing and anti-poverty programs, being beneficiaries of employee volunteer outreach activities and receiving charitable contributions (Biado, 2001). Foreign Studies Scholars and practitioners are increasingly focusing their attention on Corporate Social Responsibility (CSR), because of its significant impact on organization’s economic and financial performance (Luo and Bhattacharya, 2008). Companies are increasingly incorporating social responsibility as an important aspect of corporate management (Swaen and Chumpitaz, 2008). Corporate social responsibility refers to the “obligations that companies have to integrate environmental and social parameters into their modus operandi and long-term development policies” (Swaen and Chumpitaz, 2008, Persais, 2002). Increasingly, society expects businesses to have an obligation to the society in which they are located, to the people they employ, and their customers, beyond their traditional bottom-line and narrow shareholder concerns (Senand Bhattacharya, 2001; Carroll, 1979; Jones, 1980; Maignan, Ferrell, and Hult, 1999). CSR became a critical issue for organizations after financial scandals (e.g., Enron affair), social problems (e.g., poor working conditions in developing countries), and environmental
  43. 43. disasters (e.g., Prestige shipwreck) which increased pressure on corporations through increased media coverage and increased transparency requirements (Swaen and Chumpitaz, 2008). Organizations are increasingly investing resources to demonstrate their commitment, ethical outlook, and responsible behavior in this area (Decock-Good, 2000; Martinet and Reynaud, 2000). Researchers have established that CSR programs indeed have a strong influence on consumers’ attitudes and behaviors towards products and companies (Berens, Van Riel, and Van Bruggen, 2005; Senand Bhattacharya, 2001). Extant research has also focused on the influence of CSR on brand image and consumer trust (Wessels, 2003; Kennedy, Ferrell, and Le Clair, 2001), brand loyalty, firm’s economic performance, and corporate success (Bibb and Kourdi, 2004; Reichheld and Schefter, 2000). Prior studies have also reported that CSR activities help to build company reputation, which also indicates company’s involvement in providing quality services/products (Swaen and Chumpitaz, 2008). Customers often use corporate reputation to assess products, with positive reputation resulting in higher perceptions of product/service quality (Olson and Haddock, 1971; Shapiro, 1983). Researchers and practitioners have understood the value of company’s socially responsible actions and its impact on driving consumers’ purchasing decisions along with the traditional criteria of price, quality and service (Swaen and Chumpitaz, 2008). Extant research has provided substantial evidence that customer perception of corporate social responsibility influences customer responses to products (Brown and Dacin, 1997), attitudes towards products (Berens, Van Riel and Van Bruggen, 2005), identification with a particular company (Sen and Bhattacharya, 2001), consumers’ behavioral intentions and actual behaviors (switching behavior; consumer defection; repeat patronage and recommendation xliii
  44. 44. intentions) (Vlachos et al., 2009). However, scholars have called for more empirical work in this area as most studies lack empirical support, or findings are mixed (Vlachos et al., 2009). Therefore, there is a need to further test these proposed relationships. Perspectives and mixed results call for more detailed investigation of the interaction effects of perceptions of service quality and CSR on customer attitudes and behavioral intentions. Most CSR related studies has been done in product-based industry, prompting investigation in service-based industries. Although few initiatives have been taken in service context, there is no explicit argument provided why such relationships might be different and/or important in a service-based industry compared to a product-based industry. The current study makes an attempt to fill this gap in the literature. One of the critical reasons for the initiation of the CSR programs was to keep a check on multinational companies from exploiting human resources in developing nations. “CSR is an over-arching strategic concept that is rooted in globalization; the desire to control multinational companies’ activities; and the international community’s self-imposed goal of sustainable development. It brings into the business arena a number of previously distinct themes: human rights, labor standards, environmental protection and sustainable development, consumer protection and more recently, the fight against corruption and corporate governance” (D’ Hamale, 1999). However, CSR research has mostly ignored the perspective of globalization. The present study makes a contribution to the literature xliv by incorporating this perspective.
  45. 45. xlv Local Studies In the Philippines, more consumers are willing to pay for goods and services offered by companies that have implemented social programs in their target communities, a recent Nielsen survey showed. The Nielsen Global Survey on Corporate Social Responsibility (CSR) revealed that 7 out of 10 Filipino consumers today, or 71%, will spend more for goods and services offered by businesses known to engage in activities that "give back to society." This is up from 68% a year ago. "The positive view of Filipino consumers towards corporate social responsibility runs high," said Stuart Jamieson, managing director of Nielsen Philippines. According to Jamieson, to attract socially conscious consumers, he said companies should work on two key things: (1) Genuine CSR programs, as opposed to those that merely get talked about but not done and (2) The alignment of those programs with the company's vision, values and business objectives. Among Southeast Asian nations surveyed by Nielsen, the top 3 with consumers showing strong willingness are Philippines (71%), Thailand (68%), and Indonesia (66%). Meanwhile, consumers who said they "had spent" on goods and services offered by CSR-driven companies are from Thailand (66%), Philippines (64%) and Indonesia (56%). Jamieson urged companies to "re-access responsibility, work towards sustainable innovation and develop clear and strong messaging." (Loresco, 2011) Several cross-sectional studies spanning firms across different industries have correlated CSR performance with financial performance. The correlation is often positive, but there are also several negative and insignificant effects. Add to these mixed
  46. 46. results the ambiguous direction of causality (meaning, does good corporate citizenship lead to better financial returns or do financially sound companies devote more resources to CSR?); the inconsistency among studies with respect to which CSR dimensions do and do not generate positive returns; and that different stakeholder groups respond differently, and it becomes clear that we don't really know much about whether, how, and how much xlvi CSR benefits a company. We set out to answer this question for a major sector of the economy, consumer goods retail. We collected field data from more than 3,000 grocery shoppers regarding the major grocery retailers in their markets. We measured their perceptions of retailers' CSR on four dimensions, as well as other attributes such as price, merchandise quality, service and assortment. We then estimated a model of how these variables affect consumers' attitudes toward the retailers and their share of wallet. Here is what we found. First, all four dimensions of CSR performance -- environmental friendliness, treating employees fairly, community support, sourcing from local growers and suppliers -- positively influence consumers' attitudes toward a retailer. But consumers seem to modify their purchase behavior only when the CSR domain directly affects their actual experience with the company or brand. In our context, broad initiatives like environmental friendliness and community support build only goodwill, but initiatives like offering locally sourced products and fair employee compensation -- actions related directly to the products and people that consumers face -- bring both goodwill and a higher share of wallet from consumers. Second, this economic return is significant and meaningful. For instance, if a retailer is able to improve consumers' perception of its fair treatment of employees by one
  47. 47. point on a five-point scale, the consequent increase in share of wallet is approximately 1.7 percentage points. The gain from a similar improvement in local sourcing is even more pronounced at more than 2 percentage points. These numbers appear small, but they represent a sales lift of 10% to 15% for the average retailer in our study. Third, if a retailer chose to leverage its improved CSR perception into higher prices rather than higher share of wallet, the calculations from our model show that a one-unit increase in employee fairness perceptions translates to a price premium of about 12%, and a similar increase in local product sourcing translates to a price premium of xlvii about 16%. Consumers patronize the company because they see personal benefits from the CSR initiatives and because the initiatives resonate with their own values. We find that as much as 15% of the share-of -wallet gain from the perception of employee fairness accrues through improved perceptions of price fairness. Like the direct effect, this indirect benefit is not equal across different CSR initiatives. There is no indirect benefit of local product sourcing -- indeed, price fairness perceptions are not better for companies that offer locally produced products. Poll results of the 2009 Reader’s Digest Trusted Brands Survey in the Philippines showed that consumers consider corporate social responsibility (also called corporate philanthropy) as a significant factor that influences purchasing behaviors. The survey was an indication that most consumers patronize businesses that are actively reaching out to the society’s marginalized sectors.
  48. 48. About 55% of the respondents see CSR as an important factor that should be looked at when deciding which brands of products to buy. About 44% thinks CSR is more than important. Thus, a whopping 99% of respondents share the same views. The 2009 survey was trend-setting in that it was the first year that the poll added CSR as a benchmark to the survey. The Reader’s Digest Trusted Brands Survey said the action speaks of the organization’s belief that CSR is significantly affecting consumers’ perception about the brands, the community, the employees, and the environment. Last year, the survey identified good customer service as a prime factor that affects consumer behavior. The poll result this year also synchronized survey results across Asia, where in totality, 78% of respondents think CSR influences purchasing decisions of consumers (Humarang, 2009). A prominent feature in the CSR process is the corporate foundation or the founding family's charity arm. Just like in the 2007 survey, the foundation is involved in xlviii all aspects of the CSR process in 2011. While the board and the top management officials planted the CSR seed when they initiated it in the organization, it is usually the foundation that brings the companies’ CSR activities into fruition. After all, the community where the business operates, and usually the target of foundation work, was cited as the main beneficiary of the companies’ CSR by a whopping 95% of the respondents. Mutually beneficial relationship with the host community is a major measurement of CSR success. A hefty 70% of the respondents said community acceptance is their main goal. Another 22% considered “unhampered operations” important. These usually refer to companies that have operations in poor communities, most of them in far-flung areas.
  49. 49. They aim to keep their equipment free from bomb blasts, their executives’ safe, among others, "The community is our best security," explained Senen Bacani, president of La Frutera, which has a vast banana plantation in a Maguindanao, a region in the south where rebels operate nearby. "Not only is there no disruption in our business operations, but in a way our good name is very important in the business community because it really adds more to the credibility of what the company is doing." (Rimando, 2007) In Philippine setting, seven out of 10 Filipino consumers are willing to pay more for goods and services from companies that have implemented programs to give back to society, an increase of three points from 2011, according to a new study from Nielsen, a leading global provider of information and insights into what consumers watch and buy. In the Nielsen Global Survey on Corporate Social Responsibility in which more than 29,000 Internet respondents were surveyed in 58 countries, 75 percent of surveyed consumers from India showed the strongest willingness to spend more for goods and services from socially-responsible companies. Consumers from the Philippines' neighboring countries in Southeast Asia, Thailand (68%) and Indonesia (66%) likewise indicated strong willingness. ''The positive view of Filipino consumers towards corporate social responsibility runs high. In order to continue getting the support of consumers, authenticity is key. Companies should ensure that their social impact programs remain true to the company's vision, values and business objectives,'' says Stuart Jamieson, managing director of xlix Nielsen Philippines.
  50. 50. Synthesis and Relevance of the Reviewed Literature According to Kotler and Lee (2005), Corporate Social Responsibility is a difficult concept to pin down as it overlaps with other such concepts as sustainable business, corporate citizenship and business ethics (Moon, 2002).According to Mohr, Webb and Harris (2001), CSR is a company’s effort and responsibility to reduce or avoid harmful effects and to maximize its long run positive and useful impact on society. In spirit CSR speaks of organization’s reaction to social plans. Earlier Organizations were considered only as profit maximizing entities. However, with a change in the structure of business environment, the role of organizations has altered dramatically. Today, organizations are an essential part of social life (Karaibrahimoglu, 2010). CSR is basically a tool for organizations to carry out diverse activities to fund and resolve social problems and to fulfill their commitment towards society. It also allows the organizations to generate and assign the resources in effective and efficient way (Petrick and Quinn, 2001). So is one of the best tools to gain competitive advantage (Porter and Kramer, 2002). Due to this reason CSR is quickly gaining importance as more and more firms are realizing its value. CSR initiatives and actions are not only about charity but about transforming these ideas into useful business strategies. CSR driven efforts does not only relate to make a contribution by donating money but it speaks of incorporating societal and moral practices into business strategies that help the consumers in building a optimistic brand image. Research has shown that socially responsible activities of a firm enhance the brand image of the firms‟ goods as well as the general image of the firm. Brand image is an important concept in consumer behavior studies since the early 1950s (Li, Wang andCai, 2011). Levy (1959) proposed the concept of brand image and l
  51. 51. suggested that merchandises have societal and emotional characteristics and consumers develop emotional connections with the brands. Brand image is the most vital part of brand equity as brand image comprises of all links in the mind of consumers interconnected to that brand. So if anything which has an influence on a business from consumer's point of view is brand image. The brand image of a popular brand is a valuable business asset as consumers identify products and services more easily through the respective brands. These perceptions which are grounded on connections between characteristics and the brand name are normally stated as the brand’s image (Keller, 1993). So, brand image is basically a perception of a brand held in the memory of a customer and it reveals a customer’s general impression. Nowadays a brand is not considered just as logo but it is more likely taken as a carefully scored experience which is supported by huge marketing budgets, action and cultured mindset. A positive brand image can be taken as a capability of a firm to hold its market position(Wu, 2011).A positive brand image helps to increase numerous outcomes such as customer’s contentment, service superiority, loyalty and repurchasing intention (Lai, Griffin and Babin, 2009). Therefore, much of the marketing struggle is focused on building up perceptions about the brand in the memory of a consumer. CSR could be a beneficial for building a positive brand image and building consumers‟ positive attitudes so it is a key source of competitive advantage. Endorsing brand image with the help of CSR initiatives assures positive comments and eventually has a positive impact on the brand because a firm is crystal clear about its external communications as well as internal practices. li
  52. 52. In connection with the above-mentioned explanation, the impact of Corporate Social Responsibility Programs in building a positive brand image is a significant factor to clearly assess the consumer buying behavior. lii
  53. 53. Chapter 3 METHODOLOGY OF RESEARCH This chapter contains the research method used, population, sampling design and sample size, description of subjects, utilized research instrument, validation of the research instrument and data gathering procedure. liii Method of Research Descriptive Survey Method was used in this study. This particular design of research is concern with the present phenomena in terms of conditions, practices beliefs, processes, relationships or trends invariably termed as “descriptive survey study”. According to Dr. Y.P. Aggarwal (2008) descriptive research is devoted to the gathering of information about prevailing conditions or situations for the purpose of description and interpretation. This type of research method is not simply amassing and tabulating facts but includes proper analyses, interpretation, comparisons, identification of trends and relationships. Moreover, it is concerned not only with the characteristics of individuals but with the characteristics of the whole sample thereof. It provides information useful to the solutions of local issues (problems). The survey research employs also applications of scientific method by critically analyzing and examining the source materials, by analyzing and interpreting data, and by arriving at generalization and prediction. Since, the present study was undertaken to study the Impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer
  54. 54. Buying behavior. Hence, the descriptive survey research method was adopted. Population, Sample Size and Sampling Technique Beneficiaries of the Corporate Social Responsibility programs of Nestle Philippines are the subject of this research considering the gained experience of each individual with the company’s several community activities which is a contributing factor in evaluating and assessing the programs the business organization is doing. Cluster Sampling was employed in the selection of samples. The population is properly divided per cluster by the residence area of the researchers. Below is the table showing the number of samples per researcher and the specific area where the final liv subjects were obtained. Table 1 Total Number of Respondents NAME OF THE RESEARCHER RESIDENCE AREA NUMBER OF SAMPLES OBTAINED Abongan, Kimberly Cembo, Makati City 20 Aguilar, Trixia Camille First West Crame, San Juan City 20 Arazon, Reymart SFDM, Quezon City 20 Nonato, Chezka Marie Rosario, Pasig City 20 Olinio, Aileen Brgy. San Jose, Antipolo City 20 Relator, Rochelle Tondo, Manila 20 Sempio, Leslie Anne San Franciso Del Monte, Quezon City 20 Suganob, Diana Mae Pulanlupa I, Las Piñas City 20 TOTAL SAMPLES 160
  55. 55. lv Description of Subjects As mentioned above, consumer-beneficiaries of the Corporate Social Responsibility programs of Nestle Philippines are the subject of this research. They were divided accordingly based on cluster or area where the researchers are living. Each proponent was asked to gather data from 20 respondents accumulating to 160 total respondents for this study. Research Instrument The instrument of the research includes the phases or aspects of the instruments, the items, how items were selected and validated, and the number of items. Data were gathered utilizing the survey method. The subjects were asked to answer a questionnaire prepared by the research proponents. This questionnaire was also translated to Filipino for the convenience of the respondents. To assure the confidentiality of the research, respondents were screened first before answering the questionnaire. The first part of the questionnaire is the personal data sheet or the profile. This part seeks for information as regards with age, sex, educational attainment and occupational state which served as the variables for this study. The second part of the questionnaire contains the different corporate social responsibility programs of Nestle Philippines. This aims to check the level of awareness of the respondents with the different social initiatives of the company. The following table shows the rating used:
  56. 56. Table 2 Parameters for Awaness Level Check MARKA (Rating) MGA PANUKAT (Parameters) 1 Lubos na May Nalalaman Fully Aware 2 May Nalalaman Aware 3 Walang Masyadong Nalalaman lvi Less Aware 4 Walang Nalalaman Unaware 5 Lubos na Walang Nalalaman Fully Unaware The third part involves the evaluation of the effectiveness of the corporate social responsibility programs of Nestle Philippines on Nutrition, Environment and Rural Development which were evaluated by the respondents through the following parameters: Table 3 Parameters for the Degree of Effectiveness of Nestle Philippines’ CSR Programs on Nutrition, Environment and Rural Development MARKA (Rating) MGA PANUKAT (Parameters) 1 Lubos na Epektibo Strongly Effective 2 Epektibo Effective 3 Di-Gaanong Epektibo Less Effective 4 Hindi Epektibo Ineffective 5 Lubos na Hindi Epektibo Strongly Ineffective The last part of the questionnaire comprises the assessment of the impact of corporate social responsibility on consumer buying behavior particularly with the beneficiaries’ brand loyalty and trust, its effect on their perception of brand equity and purchase intention.
  57. 57. Table 4 Parameters for Assessment of the Impact of Nestle Philippines’ CSR Programs on Consumer Buying Behavior MARKA (Rating) MGA PANUKAT (Parameters) 1 Lubos na Sumasang-ayon Strongly Agree 2 Sumasang-ayon Agree 3 Di-Gaanong Sumasang-ayon lvii Less Agree 4 Hindi Sumasang-ayon Disagree 5 Lubos na Hindi Sumasang-ayon Strongly Disagree The questionnaire was validated through presenting the questions to Professor Estelita E. Medina, the subject adviser in Fundamentals of Research for initial evaluation, checking of errors, and was revised for improvement. For final checking and validation of the questionnaire, it was presented to Dr. Lincoln A. Bautista, the Director of the Institute of Data and Statistical Analysis of the Polytechnic University of the Philippines, Manila. The researchers were directed to conduct a pilot run which objects to test the degree of difficulty of the questionnaire. It was conducted at the PUP Main Campus with 20 different marketing students who are also beneficiaries of Nestle Philippines’ corporate social responsibility programs. The following results were obtained based on the time duration the participants have answered the research instrument. The Average
  58. 58. Time of answering is 4.96 minutes according to the computation done by the proponents. lviii (See Appendices for the results) Data Gathering Procedure Following the approval of the research adviser and the validation of the University Statistician, the proponent of the study reproduced copies of the questionnaire and distributed by cluster to the based on the corresponding sample size divided per researcher. The data gathered were based on the tally of frequency and percentage. The resulting figures would then be presented in tables to be the basis of interpretation. Statistical Treatment of Data After the survey questions were accomplished by selected respondents from the area of residence of the researchers, the proponents have processed the data gathered through identifying the percentage: Where : P = Percentage n = number of Respondents N = Total number of Respondents 100= Given as constant Computation regarding the assessment of the effectiveness and impact of Nestle Philippines Corporate Social Responsibility Programs on Consumer Buying Behavior
  59. 59. was done with the help of the University Statistician. Standard deviation was measured to determine the range of the respondents’ answer and the weighted mean was also acquired for conclusion. The table below was used to ascertain the results of the study. Table 5 Basis for Statistical Interpretation and Discussion Range Scale Verbal Interpretation 1 Fully Unaware 1.00 - 1.49 1 Fully Unaware 1.5 Unaware 1.50 - 2.49 2 Unaware 2.5 Less Aware 2.50 - 3.49 3 Less Aware 3.5 Aware 3.50 - 4.49 4 Aware 4.5 Fully Aware 4.50 - 5.00 5 Fully Aware Range Scale Verbal Interpretation lix 1 Strongly Ineffective 1.00 - 1.49 1 Strongly Ineffective 1.5 Ineffective 1.50 - 2.49 2 Ineffective 2.5 Less Effective 2.50 - 3.49 3 Less Effective 3.5 Effective 3.50 - 4.49 4 Effective 4.5 Strongly Effective 4.50 - 5.00 5 Strongly Effective Range Scale Verbal Interpretation 1 Strongly Disagree 1.00 - 1.49 1 Strongly Disagree 1.5 Disagree 1.50 - 2.49 2 Disagree 2.5 Slightly Agree 2.50 - 3.49 3 Slightly Agree 3.5 Agree 3.50 - 4.49 4 Agree 4.5 Strongly Agree 4.50 - 5.00 5 Strongly Agree
  60. 60. Chapter 4 PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA This chapter presents the results of the conducted study. It shows the complete data regarding the respondents’ profile down to the impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer Buying Behavior. Table 6 Age of Respondents Age Frequency Percentage 17 years old and below 32 20.65 18 - 25 years old 84 54.19 26 - 33 years old 17 10.97 34 - 41 years old 11 7.10 42 - 49 years old 5 3.23 50 years old and above 6 3.87 Total 155 100.00 The table above presents the age range of the respondents. It was noted that fifty four point nineteen percent (54.19%) or 84 people were between 18 to 25 years old. Twenty point sixty five percent (20.65%) or 32 respondents were at the age bracket of 17 years old and below. Ten point ninety seven percent (10.97%) or 17 individuals were between 26 to 33 years old. Seven point ten percent (7.10%) or 11 respondents were 34 to 41 years old. On the other hand, 3.87% or 6 individuals were 50 years old and above. Then, three point twenty three percent (3.23%) or 5 respondents were aged 42 to 49 years lx old, for a total of 100% or 155 respondents.
  61. 61. The apparent diversity of the maturity of the respondents reflects several implications in the study's findings. It can be generalized that most of the respondents lxi were at the age of 18 to 25 years old. Table 7 Gender of Respondents Sex Frequency Percentage Male 44 28.39 Female 111 71.61 Total 155 100.00 The data above show the gender division of the respondents. Seventy one point sixty one percent (71.61%) or 111 of the respondents were female while twenty eight point thirty nine percent (28.39%) or 44 of the subjects were male. It was clearly noted that the most number of respondents participated in the study were female. Table 8 Educational Attainment of Respondents Educational Attainment Frequency Percentage Elementary Graduate 14 9.03 Secondary Graduate 70 45.16 College Graduate 71 45.81 Total 155 100.00 This table illustrates the educational attainment of the respondents. It was clearly noted that forty five point eighty one percent (45.81%) or 71 of the respondents were
  62. 62. college graduate, while forty five point sixty one percent (45.61%) or 70 of the subjects were secondary graduates and nine point three percent (9.03%) or 14 individuals were lxii elementary graduates. It is evident that the most number of respondents participated in the study were college graduate. Table 9 Occupational State of the Respondents Occupational State Frequency Percentage Student 105 67.74 Employed 34 21.94 Unemployed 16 10.32 Total 155 100.00 The above-showed data presents the occupational state of the respondents. It was clearly noted that sixty seven point seventy four percent (60.74%) or 105 respondents were students, twenty one point ninety four percent (21.94%) or 34 of the subjects were employed, while ten point thirty two percent (10.32%) or 16 respondents were unemployed. It is noticeable that the most number of respondents participated in the study were students.
  63. 63. Table 10 Result of Nestle Philippines’ Corporate Social Responsibility Programs Awareness Level Check lxiii Corporate Social Responsibility Programs Fully Aware Aware Less Aware Unaware Fully Unaware SD WM VI 5 4 3 2 1 Frequency Nutrition 1.081 3.23 Less Aware 1. Laki sa Gatas: Putting Milk at the Heart of Good Nutrition for Growing Children 45 34 32 19 25 1.427 3.35 Less Aware 2. Libreng Check-Up: “Choose Wellness, Choose Nestlé” at the Trade 38 34 38 26 19 1.335 3.30 Less Aware 3. Morning Exercise at Makati Park: Making Wellness the Lifestyle Choice of Filipinos 27 27 49 27 25 1.304 3.03 Less Aware Environment 1.253 3.23 Less Aware 4. Conserving Water Program (Programa ukol sa Pagtitipid ng Tubig) 38 30 39 28 20 1.350 3.25 Less Aware 5. Spreading Water Awareness (Pagpapabatid sa Kahalagahan ng Tubig) 28 41 39 30 17 1.259 3.21 Less Aware Rural Development 0.952 3.15 Less Aware 6. Micro- Distributorship Program (Mga Ice Cream Cart Vendor na nag-iikot sa bawat bayan) 39 36 35 32 13 1.289 3.36 Less Aware 7. Nestlegosyo: Helping Small Stores Boost Business 12 33 60 32 18 1.094 2.93 Less Aware OVERALL: 0.918 3.20 Less Aware
  64. 64. The table above shows the result of Nestle Philippines’ Corporate Social Responsibility Programs awareness level check. It was clearly noted that the respondents are less aware of the company’s nutritional programs particularly of Laki sa Gatas: Putting Milk at the Heart of Good Nutrition for Growing Children, Libreng Check-Up: “Choose Wellness, Choose Nestlé” at the Trade, and Morning Exercise at Makati Park: Making Wellness the Lifestyle Choice of Filipinos. It is also noticeable that the consumers are less aware of the environmental programs like Conserving Water Program (Programa ukol sa Pagtitipid ng Tubig) and Spreading Water Awareness (Pagpapabatid sa Kahalagahan ng Tubig). The record also indicates that customers are less aware of the rural development initiatives of Nestle Philippines namely Micro-Distributorship Program (Mga Ice Cream Cart Vendor na nag-iikot sa bawat bayan) and Nestlegosyo: Helping Small Stores Boost lxiv Business. It can be generalized that the consumer-beneficiaries are less aware of Nestle Philippines’ Corporate Social Responsibility Programs.
  65. 65. Table 11 Source of Awareness of Respondents with Nestle Philippines’ Corporate Social Responsibility Programs How did you know that Nestle Philippines has Corporate Social Responsibility programs? lxv Frequency Percentage Family 31 20.00 Friends 42 27.10 School 49 31.61 Government Councils 33 21.29 Total 155 100.00 The table above illustrates the Source of Awareness of Respondents with Nestle Philippines’ Corporate Social Responsibility Programs. It was clearly noted that thirty one point sixty one percent (31.61%) or 49 respondents got aware with the company’s CSR programs through the school, while twenty seven point ten percent (27.10%) or 42 of the subjects were informed by their friends. It is also visible that twenty one point twenty nine percent (21.29%) or 33 were educated with the help of government councils, thus, twenty percent (20%) or 31 individuals were got conversant through family. Based on the mentioned results, the school is the first-hand source of awareness of respondents with Nestle Philippines Corporate Social Responsibility Programs.
  66. 66. Table 12 Encounter Frequency of Respondents with Nestle Philippines’ Corporate Social Responsibility Programs How often do you witness/join the Corporate Social Responsibility programs of Nestle Philippines? Frequency Percentage Weekly 18 11.61 Monthly 19 12.26 Quarterly 7 4.52 Yearly 22 14.19 Seasonal 89 57.42 Total 155 100.00 The report above clearly states the encounter frequency of respondents with Nestle Philippines’ Corporate Social Responsibility Programs. It was clearly noted that fifty seven point forty two percent (57.42%) or 89 of the respondents encountered these programs seasonal. Fourteen point nineteen percent (14.19%) or 22 of the subjects experienced those yearly, while twelve point twenty six percent (12.26%) or 19 individuals witnessed the company’s initiatives monthly. It is also noticeable that eleven point sixty one percent (11.61%) or 18 respondents joined with the CSR Programs of Nestle Philippines weekly, thus, four point fifty two percent (4.52%) or only 7 persons said that they encounter these social activities lxvi quarterly. It can be generalized that the Encounter Frequency of Respondents with Nestle Philippines’ Corporate Social Responsibility Programs is seasonal.
  67. 67. Table 13 Result of the Effectiveness of Nestle Philippines’ Corporate Social Responsibility Programs on Nutrition, Environment and Rural Development of Consumer-Beneficiaries lxvii Degree of Effectiveness Strongly Effective Effective Less Effective Ineffective Strongly Ineffective SD WM VI 5 4 3 2 1 Frequency Nutrition 1.190 3.38 Less Effective 1. Informing you about the status of your health 43 46 29 19 18 1.326 3.50 Less Effective 2. Helping you to have a healthy body 48 43 24 22 18 1.364 3.52 Effective 3. Providing an avenue for a diet 23 40 43 32 17 1.221 3.13 Less Effective Environmental Sustainability 1.082 3.32 Less Effective 4. Helping in taking care of the environment 28 44 45 26 12 1.178 3.32 Less Effective 5. Conducting programs about water conservation 26 43 49 24 13 1.168 3.29 Less Effective 6. Good implementation of nourishing water. 25 48 48 23 11 1.131 3.34 Less Effective Rural Development 1.122 3.26 Less Effective 7. Helping in improving the means of living of the community people 24 44 46 31 10 1.140 3.26 Less Effective 8. Giving hope to those who are less fortunate 28 37 52 27 11 1.161 3.28 Less Effective 9. Providing an additional source of income to those who are in-need 28 37 48 27 15 1.216 3.23 Less Effective OVERALL: 1.061 3.32 Less Effective
  68. 68. The aforementioned data show the result of the effectiveness of Nestle Philippines’ Corporate Social Responsibility Programs on Nutrition, Environment and Rural Development of consumer-beneficiaries. It was clearly noted that the aim of company’s nutritional programs particularly in informing about the status of consumer’s health and providing them an avenue for a diet are less effective, while helping the consumers to have a healthy body was recorded as effective. It is also noticeable that the objectives of the environmental programs like helping in taking care of the environment, conducting programs about water conservation and good implementation of nourishing water are less effective. The record also indicates that the agenda of the rural development initiatives of Nestle Philippines are less effective specifically in helping to improve the means of living of the community people, giving hope to those who are less fortunate and providing an additional source of income to those who are in-need. Though the activities help the consumers to have a healthy body, it can be generalized that the Nestle Philippines’ Corporate Social Responsibility Programs are less effective in terms of Nutrition, Environment and Rural Development of consumer-beneficiaries. lxviii
  69. 69. Table 14 Result of the Impact of Nestle Philippines’ Corporate Social Responsibility Programs on Consumer Buying Behavior The table shows the result of the impact of Nestle Philippines’ Corporate Social Responsibility Programs on consumer buying behavior. It was clearly noted that lxix Impact of Social Responsibility Programs of Nestle Philippines on Consumer Buying Behavior Strongly Agree Agree Moderately Agree Disagree Strongly Disagree SD WM VI 5 4 3 2 1 Frequency 1. Nagiging positibo ang iyong pagtingin sa Nestle Philippines at sa mga produkto nito. (Brand Equity) 43 55 21 20 16 1.299 3.57 Agree 2. Naeeng-ganyo kang bumili ng kanilang produkto kapalit ng iyong nakasanayang ginagamit. (Brand Switch) 32 52 36 23 12 1.196 3.45 Slightly Agree 3. Mas nahihikayat kang bumili nang bumili ng kanilang mga produkto. (Brand Repeat Purchase Intention) 32 54 37 21 11 1.170 3.48 Slightly Agree 4. Umuusbong ang iyong tiwala sa mga produktong mayroon sila. (Brand Trust) 35 51 31 23 15 1.259 3.44 Slightly Agree 5. May paniniwalang walang kahit anong produkto ang makakapalit sa produktong iyong ginagamit mula sa Nestle Philippines. (Brand Loyalty) 32 40 53 17 13 1.176 3.39 Slightly Agree OVERALL: 1.129 3.47 Slightly Agree
  70. 70. consumers-beneficiaries agreed that the company’s CSR programs establish a good brand rapport or brand equity. Thus, the respondents slightly agreed that the initiatives do lxx encourage brand switch. It is also noticeable that customers slightly agreed that the CSR programs hype the buyers to purchase more than the usual routine of procurement or brand purchase intention. The record also indicates that the respondents slightly agreed with Nestle Philippines’ consumer-related activities’ ability to create brand trust as well as form brand loyalty. Based on the above-mentioned discussion, it can be generalized that Nestle Philippines’ Corporate Social Responsibility Programs have an impact on consumer buying behavior particularly on the establishment of brand equity to consumer-beneficiaries.

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