Tesco's Customer Loyalty and CSR Initiatives: A Case Study

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RESEARCH PROPOSAL

TITLE
'' The impact of Customer Perception on Customer Loyalty with regards to Corporate
Social Responsibility-A case study of Tesco''

Table of Contents
TITLE......................................................................................................................................... 2
INTRODUCTION AND BACKGROUND........................................................................................4
RESEARCH QUESTIONS AND OBJECTIVES.................................................................................5
LITERATURE REVIEW................................................................................................................ 6
METHODOLOGY..................................................................................................................... 10
TIMESCALE............................................................................................................................. 12
RESOURCES............................................................................................................................ 13
REFERENCES........................................................................................................................... 14
APPENDIX............................................................................................................................... 16
RESEARCH ETHICS APPROVAL FORM..................................................................................16

INTRODUCTION AND BACKGROUND
Corporate Social Responsibility is referred to a concept in the business which is perceived to
change the way of the businesses. The customer perceptions are greatly influenced by the
CSR initiatives taken by a firm leading to brand loyalty. In this research, the impact of
customer perceptions with regard to CSR initiatives taken by Tesco will be examined that
leads to customer loyalty. This research investigates the relationship between the perceived
CSR undertaken by Tesco with that of brand loyalty (Schwartz and Carroll, 2003).
Many benefits are rendered to an organisation engaged in the CSR activities that drive them
towards a step closer to sustainability. With the same expectation of the business, there is
more focus laid towards the CSR practices which lead to changing customer perceptions
driving more customer loyalty.
For this research Tesco that is a retail industry is undertaken to study the relationship
between the perceived CSR with that of customer loyalty. Tesco is considered to be a British
Multinational Grocery retailer and has positioned effectively itself amongst the global
retailers in past (Tingchi Liu et al., 2014). From the past data, Tesco has emerged to be a
corporately responsible organisation which has been successful in delivering unbeatable
value to the local communities aligning its organisational goal with the customers,
environment and therefore supporting good causes.
The rationale of this research is to analyse the impact of the customer’s perceptions on
customer loyalty with references to the CSR activities undertaken by Tesco. This will help in
identifying the factors related to CSR on the perceptions of the customers and will help to
devise a relationship between the perceived CSR and customer loyalty. This will lead to the
identification of the relationship and the impact created by the CSR on the perception of the
customers of the retail industry specifically Tesco that positively impact customer loyalty.
This will help to boost research skills and academic skills. This will also help to identify the
factors affecting customer perception in the retail industry with context to CSR (Tingchi Liu
et al., 2014).

RESEARCH QUESTIONS AND OBJECTIVES
For this research to be effectively conducted the following research questions and
objectives are laid out:
Research question:
“Do the perspectives of customers related to CSR initiatives positively contribute to the
customer loyalty of Tesco?”
Research aim:
In alignment to the research question the research aim is:
To assess the impact of the customer perceptions related to CSR on customer loyalty of
Tesco.
Research objectives:
There is a positive relationship between the perceptions of customers, CSR and the loyalty
which will be explored in this research with context to the retail industry. Keeping the same
in consideration the following objectives have been devised for this research:
 To understand the concept of CSR in the retail industry
 To investigate the relationship between the CSR initiatives and perceptions of the
customers
 To establish a relationship between customer loyalty and customer perceptions To produce recommendations on the findings of the research to maintain the
positive impact of customer perceptions on customer loyalty due to the CSR
initiatives by Tesco

LITERATURE REVIEW
This chapter will undertake a range of reviews from the past researches and studies
conducted on similar topics which will attempt to inject the understanding of the current
research paper. This will involve rendering insights on the literature of CSR, perceived CSR,
conceptual framework and the relationship between perceived CSR and customer loyalty.
Concept of CSR
According to Diallo and Lambey-Checchin (2017), the concept of Corporate Social
responsibility was injected in the early 20th century which has presented an idea of
companies growing concern towards the responsibilities towards the community and public
together with the stakeholders (Pivato et al., 2008). This has been referred to the
responsibilities fulfilled by the corporations and businesses together with the financial
responsibilities to investors which ensure the betterment of the society as well as the
community. Further Saleh et al. (2015) connoted a fined definition of CSR by classifying the
CSR in three categories namely, social responsiveness, social responsibility and the social
obligations which combinable attain the eight dimensions (Pivato et al., 2008).
Elg and Hultman(2016) defined CSR as the social obligations of the businesses to pursue the
policies and align their decision such that the desired values and objectives in line with the
society’s welfare are accomplished. There is an underlying belief that corporations and
businesses should manage the operations of the business such that the public expectations
should be fulfilled by improvising the socio-economic welfare (Saleh et al., 2015).

The CSR was later made more precise when it was divided into four categories such as
ethical, philanthropic, economic and legal. The Carroll’s Pyramid of CSR is presented as
under:
Figure 1: Carroll’s Pyramid of CSR
(Source: Schwartz and Carroll, 2003, p.504)
Conceptual framework
For this research CSR forms an important aspect that is witnessed to build a competitive
advantage by improvising the relationship with the customers and bolstering their profit
margins, there are many factors where a typology of four different nature of responsibility
in CSR practices namely economic, philanthropic, legal and ethical (Diallo and Lambey-
Checchin, 2017). Keeping in mind the same, the retail sector also devised the CSR related
strategies which focus on the Fair Trade practices, cohesion measures and social equity.
These lead to the changing customer perceptions leading to better customer loyalty in the
retail sector (Mohammed and Rashid, 2018).
Economic CSR
Legal CSR
Ethical CSR
Philanthropy CSR
Customer
perceptions
Customer
Loyalty
Figure 2: Conceptual Framework
(Source: Author’s Work, 2019)

Consumer perceptions of CSR
Elg and Hultman (2016) presented in the study a critique of the impacts related to the CSR
on the perceptions of the customers by emphasizing on the awareness generated in
customers due to the CSR. The CSR practices and initiatives usually lent in positive attitudes
and the positive behavioural influences and intentions which incline them to buy products
that are socially aligned and are produced by a socially responsible company (Anselmsson
and Johansson, 2007). The CSR activities boost the awareness therefore and lead to a
positive impact on the perceptions of the customers and their attitudes towards the
companies providing them, on the another hand, Anselmsson and Johansson (2007) argued
that many consumers declare their will and the driving factor to duly considering the CSR
aspect while but when they make actual purchases and consume the products they are less
likely to undertake the CSR initiatives (Mohammed and Rashid, 2018).
Impact of CSR on consumer loyalty to a retailer
According to Cha and Bagozzi (2016), store loyalty has been emerging as a challenge for the
retailers leading to a positive impact in the long term. The consumers consider both the
monetary as well as non-monetary aspects to judge the stores and thus become loyal.
Irrespective of this fact there are CSR activities such as the social actions, environmental
programs and the ethical products that contribute to the better image of the companies,
there is a direct link between the customer loyalty and the CSR which changes the consumer
intentions (Diallo and Lambey-Checchin, 2016). Majority of studies has depicted a positive
link within the loyalty and the CSR and thus the implementation of the actions aligned with
CSR becomes a vital concern for retailers so as to regain the consumer loyalty by positively
influencing the customer perceptions (Alrubaiee et al., 2017).
Moisescu (2015) in the study depicted a link between the perceived CSR and the brand
loyalty undertaking a Romanian telecommunication industry which found out that the
companies have high rate of customer loyalty sores due to more social responsibilities met
by them, the findings of the research depicted thereafter the component of CSR which has

been clustered into seven components significantly impacting the brand loyalty towards the
company (Alrubaiee et al., 2017).
The main seven CSR perceptions are presented below:
Figure 3: Sub-Dimensions of Perceived CSR
(Source: Moisescu, 2015, p.26)
Recent studies have also laid out the findings that the impact of CSR is created due to the
philanthropy which influences customer satisfaction and loyalty (Tingchi Liu et al., 2014).
There are many philanthropic aspects and activities undertaken by retail industries such as
the donation contributions, voluntary activities and the cause-related activities which boost
the customer satisfaction and thus boost the customer loyalty (Diallo and Lambey-Checchin,
2016). Some of the charitable contributions and the development activities based on the
community positively influence customer satisfaction and develop loyalty towards the firm
(Diallo and Lambey-Checchin, 2016).

METHODOLOGY
For this research to be effectively conducted the method of data collection will be employed
by a combination of the primary as well as secondary data sources. This will involve a range
of the secondary resources collected through the use of the articles, journals, peer-reviewed
papers and the online articles that are conducted on the similar area of research (Flick,
2015). The secondary data sources will be collected by reviewing 30 sources on the basis of
the abstract reading which will then be selected for in-depth reading. This will help in
conducting the Meta-analysis of the sources and generating a literature review for this
research (Flick, 2015).
The primary research on another hand will be collected by designing a questionnaire of 10
questions where the questionnaire will be circulated to the respondents i.e. customers of
Tesco distributed at stores of Tesco so as to collect their responses (Silverman, 2016). The
questionnaire will be distributed to 100 respondents that are the customers of Tesco and
the data analysis will be conducted by random sampling method out of which the responses
of only 50 respondents will be analysed through the use of graphs and pie charts. This will
help in presenting the data collected to the intended audience and will help in effective
conducting if the research (Silverman, 2016).
The sampling method used will be random sampling method where the respondents will be
randomly selected to get the questionnaire filled and will help in generating a
representative sample of the customer base of the Tesco in the retail sector (Kumar, 2019).
Apart from the customers of Tesco, the online approach was also used to get the
questionnaire filled by the students of UKCBC students to provide a more representative
sample of the retail market of the UK. This helps in reducing the impact of the influence of
the student sample as well as the customers of Tesco of the particular store (Silverman,
2016).
ETHICAL CONSIDERATIONS
For every research ethical considerations forms serious concern which must be duly
considered by the researcher. For the same, this research wills also consider the following

ethical considerations in alignment to the confidentiality, fairness and transparency of the
research in order to collect honest responses (Kumar, 2019).
For this research, another ethical consideration was of the voluntary participation of the
respondents of the questionnaire which was gained through a consent form which reveals
the purpose of the research clearly and helps in adhering to the confidentiality of the
research findings. This helped in gaining clarity of the voluntary participation and convey
them the motive of the research (Tingchi Liu et al., 2014).
Another consideration was ensuring the privacy of the respondents and the results of this
research which will not be used for commercial purpose rather will be utilised only for
academic purpose (Kumar, 2019).
A research ethics Approval form for this research has been attached in Appendix 1 which
ensures the accomplishment of the ethical considerations during this research.

TIMESCALE
For this research, the following timescale shows the time involved in this research. The plan
for this research started on March 4th when the introduction to the management project
was given. This has helped in formulating the research topic, aims and objectives and then it
was followed by formulating the research proposal. The research is planned such that the
research proposal is submitted before the deadline i.e. before 20th May and then the final
project is completed before 15th December.
Introduction to the management project
Forming Aims and Objectives
Preparaing research proposal
Collecting litrature review
Selecting Data collection techniques
Ethical considerations
Understanding research philosophies
submitting research proposal
4-Mar-19 19-Mar-19 3-Apr-19 18-Apr-19 3-May-19 18-May-19 2-Jun-19