The Mediating Role of Consumer Trust on the CSR-Brand Loyalty Link

Abstract

Background/Objectives: Organizations are now realizing their responsibility towards the society and the environment. This research paper analyzes two dimensions of Corporate Social responsibilities and their effects on Brand Loyalty. To examine the mediating effect of Consumer Trust on the Corporate Social Responsibility (CSR)-Brand Loyalty relationship. Methods/Statistical Analysis: Philanthropic CSR and Economic CSR are taken as the independent variables, Brand Loyalty as the dependent variable and consumer trust as the mediating variable. A confirmatory factor analysis is used to test the constructs and the relationship between variables is established using a SEM model. The mediating effect is analyzed using Regression weights in SPSS.A sample of 240 consumers in a shopping mall is selected using Mall intercept survey. Findings: The finding reveals that the constructs are validated. Before the mediating variable enters there exist a direct effect of Economic CSR and indirect effect of philanthropic CSR on Brand Loyalty. After the mediating variable enters, the regressions weights are reduced and the beta value is significant with regards to Economic CSR. Hence there is a partial mediation of Consumer Trust on the Economic CSR and Brand Loyalty. It's found that Economic CSR has both direct and indirect effect on Brand Loyalty. There is a complete mediation of Consumer trust on Philanthropic CSR and Brand Loyalty as the regression weights are reduced and the beta value is not significant. Hence there is no direct effect of Philanthropic CSR on Brand loyalty. Application/Improvements: This paper highlights the effects of Consumer Trust as mediating variable on the CSR-Brand Loyalty relationship. If the firm does well to the society and to the environment, the customers are loyal to the organization and will have positive word of mouth.