Consumers' Perception of CSR: Effects on Trust and Purchase Intention

1. CONSUMERS’ PERCEPTIONS OF CORPORATE SOCIAL RESPONSIBILITIES: EFFECTS ON TRUST AND PURCHASE INTENTION Aydın KAYABAŞI ; Dumlupınar University, Faculty of Economics and Administrative Sciences. aydin.kayabasi@dpu.edu.tr Burcu MUCAN; Dumlupınar University, Hisarcık Vocational School. burcu.mucan@dpu.edu.tr SocialBusiness@AnadoluConference, June 2015, Eskişehir, Turkey.

2. OUTLINE • Introduction; Evaluation of CorporateSocialResponsibility(CSR). • Theoretical Background for • CSR & Consumer Trust. • CSR & PurchaseIntention. • Trust & PurchaseIntention. • Method • Researchpurpose • Sample, data collection • Results • Conclusions Social Business@AnadoluConference, 2015 June

3. INTRODUCTION • According to Carroll (1999); In 1950s CSR concept began. In 1960s expanded. In 1970s proliferated. In 1980s began to mature. In 1990s transitioned to alternative themes. (stakeholder theory, corporate citizenship). In 2000’s betterment of society. Definition of Corporate Social Responsibility (CSR); CSR is the social responsibility of abusiness which includes the economic, legal, ethical, and discretionaryexpectations that society has of organizations at a given point in time (Saeidi et.al.2015; Carroll, 1979). Social Business@AnadoluConference, 2015 June

4. Carroll’s “pyramid of CSR” indicates a hierarchy of responsibilities ascending from economic and legal to more socially oriented responsibilities – i.e. ethical and philanthropic (Tuan, 2012; Carroll, 1991) Expected / desired responsibilities Obligatory responsibilities Schwartz, Carroll (2003: 504) Social Business@AnadoluConference, 2015 June

5. THEORETICAL BACKGROUND • There have been numerous studies suggesting a link between • CSR and consumer behaviour/customer satisfaction (Becker-Olsen et al., 2006; Luo & Bhattacharya, 2006). • CSR andfinancialperformance (Stanwick& Stanwick, 1998; McWilliams & Siegel, 2000; Saeidi et al., 2015). • CSR andbrand/productevaluations (Brown & Dacin, 1997; Klein & Dawar, 2004). • CSR andcustomerperceptions (Chen, et al., 2012; Monday, 2011). Social Business@AnadoluConference, 2015 June

6. Brown and Dacin (1997) found that positive CSR associations can enhance product evaluations. Park et al. (2014) asserts that CSR activities create and nurture consumers’ trust in companies. Bhattacharya et al. (2008) found that successful CSR strategies must also satisfy varying employee needs. Chen et al. (2012) statedthatcustomer loyalty can be enhanced through CSR initiativesandmarginallysignificantinfluence on behavioral and attitudinal loyalty. Social Business@AnadoluConference, 2015 June

7. Corporate Social Responsibility and Consumer Trust; Many studies have analysed the relationship between consumer trust…. Pivato et al. (2008) analysed the impact of CSR on consumer trust and reported that CSR is the creation of trust among stakeholders, and that trust in turn influences subsequent actions (Monday, 2011). H1: Consumers’ perceptions of CSR (economica, legalb, ethicalc, philanthrophicd) have an effect on consumer trust. Corporate Social Responsibility and Purchase Intention; Lee and Shin (2010) found that there is a positive relationship between consumers’ awareness of CSR and consumers’ purchase intentions. Consumersseekgood CSR andintenttobuy productsfromcompanies. H2: Consumers’ perceptions of CSR (economica, legalb, ethicalc, philanthrophicd) have an effect on purchase intention Social Business@AnadoluConference, 2015 June

8. Consumer Trust and Purchase Intention; Chaudhuri and Holbrook (2001) suggest that brand trust will contribute to both purchase loyalty and attitudinal loyalty, where trusted brands should be purchased more often and evoke a higher degree of attitudinal commitment. Pivato et al. (2008) suggest that trust plays an important role as a mediating variable in the CSR–financial-performance relationship. H3: Consumer trust has an effect on purchase intention. Social Business@AnadoluConference, 2015 June

9. METHOD Research Purpose; explore the effect of consumers’ perceptions of CSR on consumer trust and purchase intention. • To determine consumers’ level of awareness of social responsibilities (economic, legal, ethical and philanthropic). • To analyse the effect of level of awareness of social responsibilities (economic, legal, ethical and philanthropic) on consumers’ trust. • To analyse the effect of level of awareness of social responsibilities (economic, legal, ethical and philanthropic) on consumers’ purchase intention. • To analyse the effect of consumers’ trust on purchase intention. Sub-aims; Social Business@AnadoluConference, 2015 June

10. Conceptual Framework; H1: Consumers’ perceptions of CSR (economica, legalb, ethicalc, philanthrophicd) have an effect on consumer trust. H2: Consumers’ perceptions of CSR (economica, legalb, ethicalc, philanthrophicd) have an effect on purchase intention. H3: Consumer trust has an effect on purchase intention. Social Business@AnadoluConference, 2015 June

11. Sample and Data Collection; • Data was collected from 410 university students studying on four different universities in Turkey. • 15 Questionnaire were not suitable for sample and 395 quesitonnaire were used for analyse. MeasurementScale • The definitions for measure to respondents CSR knowledge, were cited from Kotler and Lee (2005). • Perceptions of CSR (21 items) were adapted from Maignan (2001). • Consumer trust (4 items) and purchase intention (4 items) were adapted from Rose et al. (2012) and Deveraj et.al.(2006). Social Business@AnadoluConference, 2015 June

12. RESULTS • Demographic characteristics of the participants ; • 18–22 Years (n = 249) 63% • 23–28 Years (n = 146) 38% • Female (n = 189) 48% • Male (n = 206) 52% • >1500 (n = 130) 32%. • 1501–2250 (n = 85) 22% • 2251–3000 (n = 81) 21% • 3001–3750 (n = 51) 13% Age Sex Income Social Business@AnadoluConference, 2015 June

13. Respondents knowledge about CSR definitions. Social Business@AnadoluConference, 2015 June

14. Validity and Reliability Bartlett’s Test of Sphericity (BTS) was used to evaluate the validity of the data regarding the factor analysis. According to BTS values, p<0,001 is statistically significant, and thus the data is suitable in terms of factor analysis. Kaiser’s measure of sampling adequacy was used in order to evaluate sampling adequacy, and revealed that the results are within the acceptable limits (KMO; 0.83, 0.77, 0.79) (Harrison-Walker, 2001). • Exploratory Factor Analysis Notes: FL: Factor Loadings, EV: Eigenvalues, VE: % Variance Explained. Social Business@AnadoluConference, 2015 June

15. Confirmatory Factor Analysis Pursuant to explanatory factor analysis, confirmatory factor analysis was applied so as to analyse the adaptive values of the measurement model. As a result of the confirmatory factor analysis, the values of the measurement model were determined to have good fit. Social Business@AnadoluConference, 2015 June

16. Correlation Matrix No statistically significant relation between CSR and trust and purchase intention was identified. It was determined that there is only a statistical relation between the philanthropic dimension and trust and purchase intention (p<0.05). • Structural Model Covariance structure analysis was used in order to test the hypotheses developed on the basis of the literature. The fit indices obtained as a result of the analysis show that there is congruence between the model and the data. Social Business@AnadoluConference, 2015 June

17. Path Results Only a significant relation between the philanthropic dimension (β=0.14, p<0.01) and trust and purchase intention(β=0.49, p<0.01). No statistically significant relation was found between CSR perceptions and trust. Moreover, no significant relation was determined between CSR perceptions and purchase intention. Social Business@AnadoluConference, 2015 June

18. CONCLUSIONS • According to the consumers in our sample, CSR is a responsibility that corporates should take in order to mitigate their effects on society, while society expects corporates to do business in a way that it meets ethical, legal, commercial and social expectations. • Consumers perceived CSR according to four categories – namely economic, legal, ethical and philanthropic – as has been outlined in the literature (Maignan 2001)ç • It was observed that consumers’ perceptions of corporate economic, legal, ethical responsibilities do not affect trust in corporations and purchase intention. • Only perceptions of philanthropic responsibilities of corporates do, affect consumers positively. • The result that consumer trust affects purchase intention positively is also supported by H3. Social Business@AnadoluConference, 2015 June

19. The results obtained regarding perceptions of CSR and purchase intention have parallel characteristics with the studies of David (2005), Sen and Bhattacharya (2001), and Carrigan and Attalla (2001). • According to these studies, the effect of CSR on purchase intention is quite low, and even ineffective. • What does impact the effect is elements such as consumers’ individual values, perceptions, and level of knowledge of CSR, or the concordance level of corporates with consumers’ characteristics. Social Business@AnadoluConference, 2015 June

20. As a result…. Corporates are required to strengthen their corporate image so as to earn consumers’ trust by using other market components. The study also revealed that corporates may be able to bring about a positive effect on consumers’ purchase intentions by including more philanthropic activities in their CSR efforts. Thank you… aydin.kayabasi@dpu.edu.tr burcu.mucan@dpu.edu.tr Social Business@AnadoluConference, 2015 June