Abstract

This study assessed The Effect of Corporate Social Responsibility on Brand Loyalty in MTN and ORANGE Buea. The objective of this study is To examine the effect of corporate social responsibility on Brand Loyalty in MTN and ORANGE Buea. Data used for the study were collected through questionnaires from 50 Users of MTN and ORANGE BUEA. The study has used both descriptive and inferential statistics using simple regression analysis.

The findings of the study assessed the effect of corporate social responsibility on brand loyalty in MTN and ORANGE Buea. Specifically the study used three main attributes of corporate social responsibility which are; Economic responsibility, legal responsibility and philanthropic responsibility effects on brand loyalty in MTN and ORANGE Buea.

The study recommend that, management of MTN and ORANGE  Buea should implement the different types of corporate social responsibility but should focus more on legal and philanthropic responsibility because they have a positive and significant effect on brand loyalty while though economic responsibility is positive, its effect on brand loyalty is insignificant.

Again, though most of these types of corporate social responsibility are implemented, their effect on brand loyalty is still insignificant as in the case of economic responsibility. Therefore, this policy needs to be reviewed

CHAPTER ONE

INTRODUCTION.

1.1 Background to the Study

Brand loyalty has emerged as a critical area of interest in marketing and business research due to its role in ensuring long-term business success. According to John Welt (2006) Brand loyalty refers to the consistent preference and repeated purchase of a product or service by consumers, driven by trust, satisfaction, and emotional attachment to the brand. According to Kotler and Keller (2022), brand loyalty is a major factor in sustaining a company’s competitive edge, as loyal customers are less likely to switch to competitors, resulting in higher profitability and reduced marketing costs. Factors that influence or determine brand loyalty include customer satisfaction, brand trust, product quality, emotional connection, perceived value, corporate reputation, and Corporate Social Responsibility (CSR) initiatives that align with consumer values and societal expectations.

In today’s dynamic and competitive market, companies are increasingly focusing on Corporate Social Responsibility (CSR) as a strategy to strengthen brand loyalty. Sen 2018 found that, CSR encompasses initiatives that contribute to societal development, environmental sustainability, and ethical business practices. Du, Bhattacharya (2019) argue that businesses engaging in CSR build stronger relationships with their customers, as consumers are more likely to support brands that align with their values and contribute positively to society. Similarly, He and Li (2018) found that CSR enhances customer perceptions of a brand’s credibility and trustworthiness, fostering emotional connections that drive long-term loyalty.

The relationship between Corporate Social Responsibility (CSR) and brand loyalty is grounded in the idea that CSR initiatives foster trust, emotional connections, and a positive brand image. When companies engage in socially responsible actions such as environmental sustainability, community development, and ethical practices, they align with the values of socially conscious consumers. Research by Mark Will (2018) indicates that CSR enhances a company’s credibility and reputation, making consumers more likely to remain loyal. By demonstrating a commitment to societal wellbeing, CSR helps build an emotional bond with customers, leading to increased satisfaction, repeat purchases, and positive word of mouth, all of which are crucial to sustaining long-term brand loyalty.

Globally, the relationship between Corporate Social Responsibility (CSR) and brand loyalty has been increasingly emphasized as consumers become more socially and environmentally conscious. Recent studies show that CSR initiatives significantly impact brand loyalty by building trust and aligning a company’s values with those of its customers. Grewal  (2019) found that consumers are more likely to remain loyal to brands that engage in CSR, as they perceive these companies as responsible and trustworthy.

Additionally, David and Sam (2018) highlighted that CSR strengthens emotional connections with consumers, leading to increased satisfaction and loyalty. In global markets, such as North America and Europe, consumers actively support brands with sustainable practices, while in emerging markets, CSR addressing local issues like healthcare and education fosters loyalty. Companies like Nike, Starbucks, and Ben & Jerry’s demonstrate the power of CSR in enhancing customer retention and increasing brand loyalty by aligning their business practices with the values and expectations of consumers worldwide.

Recent research highlights the significant role of Corporate Social Responsibility (CSR) in influencing brand loyalty in developed countries like the U.S., U.K., China, and Germany. Consumers in these regions are increasingly prioritizing brands that demonstrate a commitment to social and environmental issues, with CSR fostering trust and emotional connections. Bhattacharya et al. (2018) and Grewal and Levy (2021) note that CSR enhances brand reputation and encourages repeat purchases. Companies like Starbucks and Patagonia have successfully built loyalty by focusing on sustainability and ethical practices. In China, Clinton (2020) found that CSR focused on sustainability resonates with the growing middle class, while Adeyemi et al, (2023) highlighted that in Germany, CSR initiatives, particularly around sustainability, strengthen consumer loyalty. Overall, CSR is increasingly seen as essential for building long-term brand loyalty in developed markets.

In developing countries, including those in Africa, the relationship between Corporate Social Responsibility (CSR) and brand loyalty is becoming more pronounced as consumers are increasingly aware of the social and environmental impacts of the brands they support. Research indicates that consumers in these regions are more likely to remain loyal to brands that demonstrate a commitment to social causes, such as poverty alleviation, education, healthcare, and environmental sustainability. Adeyemi et al, (2023) found that CSR activities addressing local social issues, like job creation and community development, significantly enhance customer trust and emotional attachment to brands. In Africa, where issues such as economic development, healthcare, and education are critical, companies that invest in these areas such as MTN and Coca Cola tend to build stronger relationships with consumers. CSR in Africa not only helps brands differentiate themselves from competitors but also aligns them with the values and aspirations of local communities, thereby fostering long-term brand loyalty. As such, CSR initiatives in developing countries are increasingly seen as vital for companies aiming to strengthen their market position and build a loyal customer base.

In Cameroon, the relationship between Corporate Social Responsibility (CSR) and brand loyalty for companies like MTN and Orange is significant. Both brands have engaged in various CSR initiatives that focus on community development, education, healthcare, and environmental sustainability, which resonate strongly with consumers in the region. MTN, for example, has invested in educational programs and local infrastructure, while Orange has supported initiatives in health and community development. According to Nkongho and Tchouanguea (2020), such CSR activities contribute to building trust and emotional connections with local customers, making them more likely to remain loyal to these brands. Consumers in Buea, particularly those who value social responsibility, are drawn to these companies because their actions align with the community’s needs and values. As Ngwane (2021) noted, CSR activities that directly benefit local communities in areas like education and health lead to stronger customer satisfaction and long-term loyalty. In Buea, where community ties are important, MTN and Orange’s CSR efforts not only enhance their brand image but also foster a sense of shared purpose with their customers, driving brand loyalty.

The telecommunications industry, particularly in developing regions like Africa, has experienced rapid growth and increasing competition. Companies such as MTN, a leading telecommunications provider, have adopted CSR initiatives to differentiate themselves and build strong customer relationships. Grewal and Levy (2021) note that CSR efforts, such as community development programs, education support, and environmental conservation, significantly influence customer satisfaction and loyalty. In regions like Buea, where MTN operates, CSR initiatives play a key role in enhancing the brand’s image and fostering loyalty among socially conscious customers.

Recent studies have highlighted those customers now consider a company’s social impact when making purchasing decisions. Adeyemi et al, (2023) emphasize that consumers reward brands that demonstrate a commitment to societal well-being through repeat patronage and positive word-of-mouth. For instance, CSR initiatives such as providing scholarships, supporting healthcare facilities, and empowering local communities contribute to customer trust and emotional engagement with a brand. This study focuses on the case of MTN in Buea to explore how CSR initiatives influence brand loyalty. By examining the relationship between CSR and brand loyalty, this study will provide insights into how socially responsible practices can help businesses build long-term customer relationships and gain a competitive advantage in a highly competitive market.

Recent literature presents controversies regarding the relationship between CSR and brand loyalty. While some studies, like Luo and Bhattacharya (2006), argue that CSR can enhance loyalty only when consumers perceive it as authentic, others, such as Ailawadi et al, (2020), emphasize that CSR initiatives related to social causes have a stronger impact, while Sen and Bhattacharya (2001), suggest that the influence of CSR varies across industries and consumer segments. Additionally, David, Kline, and Dai (2005), caution that CSR may backfire if perceived as insincere or self-serving, potentially damaging brand loyalty. Thus, while CSR is generally seen as a tool to boost loyalty, its effectiveness depends on consumer perceptions, the nature of the initiatives, and the authenticity of the company’s efforts.

1.2 Statement of the Problem

Brand loyalty faces challenges due to various aspects of Corporate Social Responsibility (CSR), as highlighted by recent researchers worldwide. While CSR is designed to build trust and long term consumer commitment, its effectiveness is often inconsistent. Luo and Bhattacharya (2006) argue that CSR only strengthens brand loyalty when consumers perceive the initiatives as authentic and aligned with the company’s core values.

However, when CSR activities appear insincere or disconnected from the brand’s purpose, they can lead to consumer skepticism and harm brand loyalty. Becker Olsen et al, (2020) further note that CSR initiatives that are poorly communicated or irrelevant to consumer values may have minimal or even negative impacts, as customers may view them as opportunistic marketing tools. Additionally, Ailawadi et al, (2020) suggest that different aspects of CSR such as environmental sustainability, philanthropy, or ethical labor practices appeal to diverse consumer segments, making it difficult for businesses to satisfy all expectations simultaneously. In emerging markets, Adeyemi et al, (2023) highlight that companies focusing on global CSR standards often fail to address local priorities, which reduces their impact on brand loyalty. Overall, these studies show that the diverse and complex nature of CSR can create challenges for companies, as misalignment, poor perception, or irrelevance of CSR activities can weaken brand loyalty rather than strengthen it.

In developed countries, brand loyalty faces challenges when aspects of CSR are poorly executed, misaligned, or perceived as insincere. Luo and Bhattacharya (2006) and Becker-Olsen et al. (2020) argue that consumers may view irrelevant or opportunistic CSR initiatives with skepticism, weakening trust and loyalty. In socially conscious markets like the U.S., U.K., and Germany, Grewal and Levy (2021) highlight those inconsistencies, such as greenwashing or unmet expectations, can damage brand credibility. Additionally, Ailawadi et al, (2020) note that the diverse CSR priorities in developed countries make it difficult for companies to satisfy all stakeholders, which can further undermine brand loyalty.

In developing countries, brand loyalty is challenged by the disconnection between CSR initiatives and local needs. Adeyemi et al, (2023) found that consumers often view CSR efforts focused on global issues, like environmental sustainability, as irrelevant to their immediate concerns. Ngwane (2021) highlights that CSR initiatives targeting social development, such as education and healthcare, resonate more with consumers, but when companies focus on unrelated issues, they risk losing loyalty. Additionally, Ameh et al, (2022) argue that CSR in these regions can be seen as insincere or self-serving, weakening its impact on brand loyalty. Thus, CSR’s effectiveness in developing countries depends on its alignment with local priorities and perceived authenticity.

In Cameroon, Brand Loyalty is often affected by how CSR initiatives are perceived and whether they aligns with local customers need. Research by Nkongho and Tchouanguea (2020) suggests that while companies may focus on global CSR causes such as environmental sustainability, these efforts often fail to resonate with consumers who are more concerned with local issues like education, healthcare, and infrastructure thereby affecting brand loyalty.

Ngwane (2021) further highlights that CSR activities centered on community development are more likely to foster loyalty among Cameroonian consumers, as they directly address immediate social needs. However, when CSR initiatives are perceived as disconnected from the community or as mere marketing strategies, Ameh et al, (2022) argue that they may be seen as insincere, leading to a reduction in brand loyalty. These studies point to the need for companies operating in Cameroon to ensure their CSR efforts are authentic, relevant, and aligned with local priorities in order to effectively build and maintain consumer loyalty.

In the case of MTN and Orange in Cameroon, brand loyalty faces challenges due to aspects of CSR that may not resonate with local consumers or may be perceived as insincere. Recent research suggests that CSR initiatives, if not aligned with consumer expectations, can fail to foster brand loyalty. Nkongho and Tchouanguea (2020) note that while MTN and Orange invest in global CSR activities such as environmental sustainability, consumers in Cameroon are more concerned with local issues like education, healthcare, and infrastructure development. As a result, CSR efforts in areas not directly relevant to local needs may not significantly strengthen customer loyalty. Additionally, Ngwane (2021) argues that when CSR activities are perceived as marketing tactics rather than genuine efforts to improve the community, consumers may view these initiatives as opportunistic, which can negatively affect brand loyalty. This is particularly relevant for brands like MTN and Orange, where consumer loyalty is crucial in a competitive telecommunications market. Ameh et al,  (2022) further highlight that if CSR actions by companies like MTN and Orange are seen as insincere or disconnected from the community’s immediate concerns, they risk alienating customers, thus undermining brand loyalty. Therefore, the challenge for MTN and Orange lies in ensuring that their CSR initiatives are both authentic and tailored to the specific social needs of the Cameroonian community to foster lasting brand loyalty.

The relationship between CSR and brand loyalty is controversial, with recent studies highlighting conflicting views on its effectiveness. Luo and Bhattacharya (2006) argue that CSR only enhances brand loyalty if it is perceived as authentic and aligned with company values. However, Ailawadi et al (2020) suggest that CSR initiatives targeting global issues, like environmental sustainability, may not resonate with all consumers, especially those prioritizing local concerns.

Becker-Olsen et al (2020) note that CSR can backfire if seen as a marketing tool, leading to consumer skepticism and weakened loyalty. Furthermore, Sen and Bhattacharya (2001) argue that the success of CSR in fostering loyalty varies by industry. These controversies indicate that CSR’s impact on brand loyalty is not universally positive and can be undermined by perceptions of insincerity, misalignment with consumer values, and industry specific factors.

1.3 Research Question

1.3.1 Main Research Question

What is the effect of corporate social responsibility on brand loyalty in MTN Buea?

1.3.2 Specific Research Question

1. How does economic responsibility affect brand loyalty in MTN Buea?
2. What is the effect of legal responsibility on brand loyalty in MTN Buea?
3. To what extend does philanthropic responsibility impact brand loyalty in MTN Buea?

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