EFFECT OF PHILONTHROPIC PRACTICES ON CUSTOMER LOYALITY

PHILONTHROPIC PRACTICES

Philanthropy originated from the Greek word meant as a love of humanity. In the modern world, this is emphasized where the public good is produced by the private sector having a sense of charity on humanitarian grounds. Normally the corporate world uses this theme to get a Firm’s Reputation and more revenue in results. Even many firms have considerable assimilation into their objectives.

Corporate philanthropy has been in practice since long in the form of servicing in education and health and mostly confronting natural disasters, along with business motives. The two-fold objectives of philanthropy not only servicing the society but also help in nourishing the business or product of a firm. 

It is considered that the firm’s philanthropic investments have a purely commercial aspect and objectives. On the other hand, this view is also in the air that a firm who does charity investment is not only for the sake of commercial purpose but it has some social obligation and the firm tries to perform it in a better way.

Though it is little confusing that a commercial organization how is involved in social perspectives but it is also a fact that a firm if investing in philanthropy does get multiple gains, on one hand, it builds its social facet acceptable to locals and reshaping its goodwill among the people and on the other side, this investment is intrinsically returning in commercial results as well.

1.1 Problem statement

As said earlier the firms doing investment in philanthropic activities have manifold objectives where in Pakistan the firm involved in philanthropy may seem different results than expected. Ufone is not only a competitive telecom leader in the industry in Pakistan but proclaimed as an organization that has always been working towards an orderly corporate social responsibility and philanthropic plan including ways of benefiting the masses of our country especially for the youth. Social responsibility has become a global phenomenon due to which corporations around the world now heavily focus on the nurturing of society.

Ufone, one of the leading telecom companies in the country, has been at the forefront of many public initiatives which have been taken to benefit their valued customers. Since its inception, Ufone has been a socially responsible organization, and over the last few years, has increased its focus on Child Health Care. Moreover, there is also a keen focus on highlighting the need for a green and healthy environment. Ufone has been conducting Plant-a-Tree campaigns in various parts of the country, especially in hospitals and schools to ensure that a healthy environment is provided to all.

Tapal Tea is another company who engage itself in philanthropic activities in different time and manner. It worked individually and as well as with collaboration of other institutions for wellbeing and human welfare.  It managed free eye camps;    

Therefore a need is felt to see the outcome of philanthropy in intellectual assets like customer’s loyalty, firm’s reputation and brand image. The reason for choosing these factors is the prominence of these factors over other out of intangible assets.

1.2 Research Questions

  • What are the philanthropic activities of Ufone and Tapal Tea in Peshawar city?
  • What are the effects of philanthropic practices of Ufone and Tapal Tea on their Loyalty, Firm’s Reputation and Brand Image?
  • Do the philanthropic activities have any impact on the Firm’s Reputation of Ufone and Tapal Tea?

1.3Objectives

The aims and objectives of the study are:

To identify the impact of perceived philanthropic involvement of Ufone and Tapal Tea on its Customer’s Loyalty, Firm’s Reputation and Brand Image in Peshawar city.

1.4 Hypotheses to be tested

In this report, we have identified the effect following the hypothesis.

Hypothesis 1:

  • There is no effect of corporate philanthropy on customer’s loyalty.       
  • Effects of corporate philanthropy exist on the customer’s loyalty.
  • Corporate philanthropy enhances a firm’s reputation.
  • Corporate philanthropy has a significant effect on brand image.

1.5 Research design

Proper research design includes primary data, secondary data, sample size, statistical tools, time horizon and unit of analysis are briefly discussed below:

  • Primary Data

Primary data includes the first-hand data which was collected through a Likert scale questionnaire. The primary data was collected from both of the pharmaceutical firms i.e. Ufone and Tapal Tea. The first-hand data is collected from the employees of both firms.

  • Secondary Data

Secondary data include the second-hand data which is collected from different sources i.e. previous research publications, internet and books. The secondary data is reviewed in the form of a literature review in this report.

  • Sample Size

The primary data is collected from the selected sample of 200 respondents from each selected pharmaceutical firm. The total sample size is 150 which include the employees of Ufone and Tapal Tea. Also, among all the pharmaceutical firms that are in operation in Peshawar, Pakistan, out of these firms we selected Ufone and Tapal Tea for the comparison.

  • Statistical Tools

The tools used to interpret and conclude the findings are Regression analysis and the correlation factor. Using regression analysis, we have found out the relationship between the dependent variables and independent variables.

  • Time Horizon

Six months of time frame was assigned for the completion of this report. In this time frame, the research proposal was completed. Next month, we have completed a literature review.

In the coming two months we designed a questionnaire and also completed our data collection. Interpretation, findings, conclusion and recommendation were completed in two months. In the ninth month of the report we completed report writing and then finally on 20th December 2015 we submitted the final draft of this report in hard copy.

  • Unit of analysis

The data is collected individually from each respondent. Meanings to say that survey is done on an individual basis rather than in group form. Each unit is analyzed through a Likert scale questionnaire.

1.6Type of research

The research we have conducted is basic research, in which we have increased the overall understanding and knowledge about corporate philanthropy. Here, we are not focusing on problem analysis but we have just analyzed the concept of philanthropy, its applications and effects on different issues.

1.7 Type of study

This study is of two types, comparative study, an exploratory study. In a comparison study, we compared the philanthropic practices of two pharmaceutical firms, while in exploratory we have explored the effects of philanthropic practices on Customer Loyalties Firm’s Reputation and Brand Image.

1.8 Scope of research

The scope and extent of this report are beneficial for the academics, students, businesses and future research as well. Academics and students can help in their studies from our research; they can be beneficial by studying our literature review and findings because we have reported the literature from the latest research articles and journals. Businesses can learn from the results we have drawn to the study to make the concept of philanthropy as their mission and vision. Furthermore, the Ufone and Tapal Tea can improve their philanthropic practices by studying this report.

1.9 Impact of research

As this report is focusing on philanthropic practices and other variables, the impact of philanthropic practices on other variables has positive advantages for any organization. So this concept and the conclusion we have drawn will be beneficial for other firms and other scholars to make further studies.

1.10 Activity chart

Each activity of the research is conducted according to the schedule. The topic selection, identifying research goals and objectives along with the report questions were completed in the first month of the research. Next activity followed by the proposal is a literature review which has taken three months to complete. The third and fourth activity of the report was designing questionnaires and data collection. Second, last activity was data analysis and conclusion of the report. Finally, the last activity i.e. report submission was performed and submitted in the last month.

1.11 Limitation of research

Our paper has several limitations. The limitations are from a methodology perspective. It may be that the methodology we have used is not sufficient for this research. The sample size we have used for the data collection might be less or it would have more than 200 respondents from each firm. 

The respondent given by the employees is not accurate or it might be filled by another individual.  It may be because of the extra burden of work on employees, couldn’t be filled by the actual respondent. The questionnaire we have designed might be misunderstood by the employees. The wordings, the concept can also be the issue of not getting the actual meaning. These are some of the limitations that might have happened in this report.