EFFECTS OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND EQUITY OF LISTED COMPANIES IN KENYA

Abstract

Corporate social responsibility (CSR) is one of the marketing strategies that are widely used in the industrial arena for the purposes of creating customer awareness, enhancing product penetration into the market and boosting firm’s profitability. The overriding question, therefore, the study asked was what effects CSR has towards sales volume increase, product extension into the market and consumer increase in numbers in organizations? The specific objectives guiding the research were; to establish the understanding of CSR among company practitioners on brand equity among listed companies; to assess the effect of CSR on sales volume increase among listed companies; to determine the effect of CSR on product extensions in the market among listed companies and to evaluate the extent to which CSR affect consumer increase in numbers among listed companies. This timely study was carried in the area of CSR because it is so rich, current, on going and challenging. The study is underpinned on the theory of Corporate Social Responsibility or Carroll’s four-part model. A census technique of 52 listed companies was used. Data was mainly collected through questionnaires and analyzed through descriptive and inferential statistics. A Multiple Linear Regression Analysis was employed on testing of the hypotheses. With regard to volume increase, the findings revealed that, there is a weak positive linear relationship between CSR and sales volume increase because P >.073. Similarly, there was a weak positive linear relationship between the CSR and product extension into the market since P >.216. The third variable indicated that there is a strong positive linear relationship between the CSR and consumer numbers increase in the market because P =.001. In summary, CSR enhances brand equity of firms. These findings therefore are important indicators that brand managers and marketers should relook the CSR practice and effectively tailor it to build a company’s brand equity, which is the backbone of any successful business venture. This study was carried out to contribute to the growing knowledge in the field of marketing, especially in the area of CSR as a marketing strategy and how it should be utilized by companies to generate more profits; as opposed to the perception that it is just a mere tool for publicity. It is upon the CSR practitioners to use the correct dimensions based on their objectives to achieve the desired outcomes. Finally, there is need for a replica of the same study, but now looking at other companies in Kenya that are not listed to see if similar results would be obtained for further generalizations of the findings.