THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) ON THE BRAND PREFERENCE IN BANKING INDUSTRY; (THE CASE STUDY: BANKS OF MELLAT AND REFAH IN IRAN)

Abstract

Corporate Social Responsibility (CSR) deals with the relations between companies and the society and especially it examines the impact of companies’ activities on individuals. The main purpose of this paper is to study the impact of CSR on the bran d preference in
banking industry that it has been investigated as the case study in two banks, Mellat and Refah, in Tehran-Iran. The research variables consist of transparency, commitment, the type of CSR program, and the brand’s perceived quality. The variables of “transparency”, “commitment”, and “CSR program type” have been considered to assess the effects of CSR while the variable of “brand’s perceived quality” examines the power of CSR actions. Since the previous communications of a company with its clients (in relation to CSR) are likely to affect the brand preference, the variable of “CSR reputation” has been also considered in the conceptual model of the research. In this study, the quantitative methods of developing a questionnaire and sampling have been used to collect data. The random sampling method was used to select 768 people who are the clients of Mellat and Refah banks in Tehran. The research includes six hypotheses which have been tested through t-test and regression. The results show that the type of CSR program and brand’s perceived quality significantly influence the  clients’ brand preference. Also, the effects of variables are changed based on the clients’ ages, cultural values, and tendency to CSR. Organizations and banks can enhance their brand preference through improving the CSR actions and variables. However, it is possible to achieve significant positive effects under certain conditions. Therefore,
identification and utilization of such conditions are necessary for any company which makes investments in CSR. In Iran, CSR is a new field and few studies have been conducted in this regard, especially there is no research about the impact of CSR on the brand and its preference. Considering the increasing importance of CSR, it is needed for banks to pay attention to different aspects of CSR