Corporate Social Responsibility as a Factor Promoting Customer Loyalty in the Latvian Retail Sector
Keywords:customer loyalty, corporate social responsibility, retailing, competitiveness, corporate citizenship
The retail sector is an important engine of the national economy and an indicator of the development of the national economy. Over the last ten years, the total retail turnover index has increased by 31%, which highlights the acquisition of competitive advantages. Businesses need to fight strategically for consumers in an environment where information and services are widely available. Promoting customer loyalty is important for companies, but with the realization of responsible and sustainable operations, corporate social responsibility is one of the ways to promote it. It is important to understand how important corporate responsibility is to consumers and what corporate social responsibility activities are now important to consumers to draw conclusions about their impact on customer loyalty. The aim of the current research is to identify corporate social responsibility activities that promote customer loyalty in the Latvian retail sector. In order to achieve the aim of the work, the following tasks have been set: (1) to study theoretical aspects of corporate social responsibility and customer loyalty; (2) to develop a questionnaire to assess public opinion on the importance of corporate social responsibility in the food retail sector and to conduct an in-depth interview to find out the opinion on the results of the questionnaire in practice;(3) to identify the corporate social responsibility activities that are important to society and promote the loyalty. The research question put forward is: What corporate social responsibility activities affect customer loyalty? For analysis of statistical data, the authors use such methods as internal coherence analysis (Cronbach's alpha), frequency analysis, ranking, factor analysis, graphical analysis. In order to identify the factors influencing corporate social responsibility in the Latvian retail sector, a survey was carried out. As a result of factor analysis a scheme of corporate social responsibility activities was developed for companies in the food retail sector, grouping together the most important directions and activities of corporate social responsibility for consumers in order to promote the customer loyalty.
Keywords: customer loyalty, corporate social responsibility, retailing, competitiveness, corporate citizenship
Abu-Alhaija, A.S., Nerina, R., Hashim, H., Jaharduddin, N.S. (2018). Determinants of Customer Loyalty: A Review and Future Directions. Australian Journal of Basic and Applied Sciences, 12(7), 106-111.
Al-Ghamdi, S., Nada, B. (2019). Do Coportate Responsibility activitites enhance customer satisfaction and customer loyalty? Evidence form the Saudi banking sector. Cogent Business & Management, 6, 1-19.
Boone, A.N., Boone, D.A. (2012). Analyzing Likert Data. Journal of Extension, 50(2) (Article Number 2TOT2) Retrieved 10.04.2022, from https://archives.joe.org/joe/2012april/pdf/JOE_v50_2tt2.pdf
Cabinet of Ministers of Republic of Latvia. (2020). No jaunā gada Latvijā minimālā alga būs 500 eiro Retrieved 10, December, 2021 from https://www.mk.gov.lv/lv/jaunums/no-jauna-gada-latvija-minimala-alga-bus-500-eiro?utm_source=https%3A%2F%2Fwww.google.com%2F
Carroll, A.(1991). The Pyramid of Corporate Social Responsibility: Towards the Moral Management of Organizational Stakeholders. Business Horizons, (34), 39-48.
Carroll, A.B. (2021). Corporate Social Responsibility: Perspectives on the CSR Construct’s Development and Future. Business & Society, 60(6), 1258–1278.
Chang, Y., Yeh, C. (2017). Corporate social responsibility and cutomer loyalty in intercity bus services. Transport Policy, 59, 38-45.
Cho, Y.S., Rha, H., Burt, S. (2015). The impact of customer awareness of manufactuer name diclosure on retail brand attitudes on loyalty in Korea. Journal of Retailing and Customer Services, 22, 128-137.
Chun, K., Bang, W. (2016). Effect of CSR on Customer Loyalty; Moderating Effect of Authenticity. International Journal of u- and e- Service, Science and Technology, 9(5), 135-142.
Dang, V.T., Nguyen, N., Pervan, S. (2020). Retailer corporate social responsibility and consumer citizenship behavior: The mediating roles of perceived consumer effectivness and consumer trust. Journal of Retailing and Consumer Services, 55, 1-10.
Dapi, B., & Phiri, M. A. (2015). The impact of corporate social responsibility on brand loyalty. Journal of Governance and Regulation, 4(4), 8-16.
Deepa, S., Chitramani, P. (2015). CSR in Retailing Industry – a Case of Three Retail Stores. International Journal of Business and Administration Research Review, 3(9), 128-135.
Eur-Lex. (2011). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. A renewed EU strategy 2011-14 for Corporate Social Responsibility Retrieved 25.02.2022 from https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52011DC0681
Filipe, S., Marques, S.H., Salgueiro M.F. (2017). Customers’ relationship with their grocery store: Direct and moderating effects from store format and loyalty programs. Journal od Retailing and Consumer Services, 37, 78-88.
Foster, J.J. (2002). Data Analysis Using SPSS for Windows Versions 8 to 10. A Beginner’s Guide. London: Sage Publications Ltd.
Gürlek, M., Düzgün, E., Uygur. S.M. (2017). How does corporate social responsibility create customer loyalty? The role of corporate image. Social Responsibilty Journal, 13(3), 409-427.
Jansons, V., Kozlovskis, K. (2016). Mārketinga pētījumi: teorija un prakse SPSS 20 vidē. Mācību grāmata. 2. daļa. Rīga: RTU Izdevniecība.
Jones, P., Comfort, D., Hillier, D. (2007). What’s in store? Retail marketing and corporate social responsibilty. Marketing Intelligence & Planning, 25(1), 17-30.
Kotler, P., Lee, N. (2005). Corporate Social Responsibility. Doing the Most Good for Your Company and Your Cause. New Jersey: John Wiley & Sons, Inc.
Kristapsone, S. (2020). Statistikās analīzes metodes pētījumā. Rīga: Biznesa augstskola Turība.
Liniņa, I. (2018). Kā piesaistīt un noturēt pircēju. Rīga: Biznesa augstskola Turība.
Linina, I., Vevere, V., Zvirgzdina, R. (2019). Corporate Social Responsibility and Loyalty Formation Mechanisms in Retailing. Vision 2025: Education Excellence and Management of Innivations Through Sustainable Economic Competitive Advantage. IBIMA 34 Conference Proceedings, Madrid, 5333-5343.
Mandhachitara, R., Poolthong, Y. (2009). A Model of Customer Loyalty and Corporate Social Responsibility. Journal of Services Marketing, 25(2), 122-133.
Musso, F., Risso, M. (2006). CSR within Large Retailers International Supply Chains. Emerging Issues in Management, (1), 79-92.
Official Statistics Portal. (2021). Population number and characteristics Retrieved 10.02.2022 from https://stat.gov.lv/en/statistics-themes/population/population-number
Oliver, R.L. (1999). Whence Consumer Loyalty? Journal of Marketing, 63, 33-44.
Pekovic, S., Rolland, S. (2020). Recipes for achieving customer loyalty: A qualitative comparative analysis of the dimesions of customer experience. Journal of Retailing and Customer Services, 56, 1-15.
Pires, G., Stanton, J., Rita, P. (2006). The Internet, Consumer empowerment and Marketing Strategies. European Journal of Marketing, 40(9/10), 936-949.
Pivato, S., Misani, N., Tencati, A. (2008). The Impact of Corporate Social Responsibility on Consumer Trust: The Case of Organic Food. Business Ethics: A European Review, 17(1), 3-12.
Rai, A.K., Medha, S. (2013). The Antecedents of Customer Loyalty: An Empirical Investigation in Life Insurance Context. Journal of Competitiveness, 5(2), 139-163.
Rivera, J.J., Bigne, E., Curras-Perez, R. (2018). Effects of Corporate Social Responsibility on consumer brand loyalty. RBGN Review of Business Management, 21(3), 395-415.
Rodrigues, P., Borges, A.P. (2015). Corporate social responsibility and its impact in consumer decision-making. Social Responsibility Journal, 11(4), 690-701.
Rodriguez-Gomez, S., Arco-Castro, M.L., Lopez-Perez, M.V., Rodriguez-Ariza, L. (2020). Where Does CSR Come from and Where Does It Go? A Review of the State of the Art. Administrative sciences, 10(3), 60-79.
Smigielska, G., Oczkowska, R. (2017). Retailers’ Responsibility towards Consumers and Key Drivers of Their Development in Poland. Administrative Sciences, 7(3), 1-15.
Stanisavljević, M. (2016). The Impact of Corporate Social Responsibilty on Customer Loyalty. 2016 ENTRENOVA Conference Proceedings, 434-439.
Uncles, M.D., Dowling, G.R., Hammond, K. (2002). Customer Loyalty and Customer Loyalty Programs. Journal of Consumer Marketing, 20(4), 294-316.
Wan, L.C., Poon, P.S., Yu, C. (2016). Consumer reactions to corporate social responsibility brands: the role of face concern. Journal of Consumer Marketing, 33(1), 52-60.
World Business Council for Sustainable Development. (1998). Corporate Social Responsibility. Meeting, Changing Expectations. WBCSD Publications.
Zvirgzdiņa, R., Liniņa, I., Vēvere, V. (2015). Efficient Consumer Response (ECR) Princpiples and Their Application in Retail Trade Enterprises in Latvia. European Integration Studies, 9, 257-264.