INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY ON BRAND PREFERENCE IN THE TELECOMMUNICATIONS INDUSTRY A STUDY OF MTN NIGERIA UMUAHIA ABIA STATE, NIGERIA

TABLE OF CONTENTS

Title Page - - - - - - - - - i

Declaration - - - - - - - - - ii

Certification - - - - - - - - - iii

Dedication - - - - - - - - - - iv

Acknowledgement - - - - - - - - - v

Abstract- - - - - - - - - - vi

Table of Content - - - - - - - - vii

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study - - - - - - 1

1.2 Statement of Problem - - - - - - - 4

1.3 Objective of Study - - - - - - - 5

1.4 Research Questions - - - - - - - 5

1.5 Significance of the Study - - - - - - 6

1.6 Scope of the Study - - - - - - - 6

1.7 Limitation of Study - - - - - - - 7

CHAPTER TWO: REVIEW OF LITERATURE

2.0 Introduction - - - - - - - - 8

2.1 Nature of Corporate Social Responsibility - - - - 8

2.2 Stakeholders in CSR - - - - - - - 10

2.3 Background of CSR - - - - - - - 11

2.4 Perspectives of CSR - - - - - - - 13

2.5 CSR in Nigeria - - - - - - - - 16

2.6 Benefits of CSR - - - - - - - - 24

2.7 CSR and Public Relations - - - - - - 30

2.8 Brands and Brand Telecommunication Industry - - - 32

2.9 Profile of MTN Nigeria - - - - - - - 34

2.10 MTN Foundation - - - - - - - - 35

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research Design- - - - - - - - 38

3.2 Sources of Data - - - - - - - - 38

3.3 Population of Study - - - - - - - 38

3.4 Sample Size Determination - - - - - - 39

3.5 Sampling Technique - - - - - - - 41

3.6 Design of Research Instrument - - - - - 41

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA - - - 42

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 Summary of Findings- - - - - - - 62

5.2 Conclusion - - - - - - - - - 63

5.3 Recommendations - - - - - - - 64

References- - - - - - - - - 66

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The Nigerian telecommunication industry is one of the biggest and most profitable industries in Nigeria as it worth stand at over 2.9billion dollars (4.6 trillion naira) as at the year ended 2010 (www.mtnonline.com}.This performance has been possible because of a major breakthrough in the wireless telephone system which comes either as fixed wireless or the global system for mobile communication (GSM) (Wojuade 2005) One cannot over emphasize the importance of communication as a very important variable in the economic growth of any given nation. The Nigerian telecommunication industry has evolved over the years from a monopolised industry into a purely competitive industry, with lots of players who work hard to gain patronage from consumers.

The Nigerian telecommunication market is presently operated by four major telecom companies namely, MTN, GLO, AIRTEL and ETISALAT. There is intense competition among these companies to increase customer patronage, they also copy or imitate one another's promotional technique in their bid to out-wit each other in the market given that there is an awakening as regards to how products are produced, the rendering of services and how environmentally responsible these telecommunication companies are, consumers are now shifting their attention to the degree of benefits they derive from consuming a product as the sole reasons for making their purchasing decisions (Leon, 2009), Corporate social responsibility is now employed as an instrument for inducing sales and increasing patronage in the telecom industry. The business world is known as a changing world where technologies that are used now may not be relevant in the next couple of years, therefore the ability of a company to stay proactive and inculcate new trends has now become a competitive advantage.

Consumers and indeed the general public are increasingly getting more environmental and socially sensitive, corporate social responsibility (CSR, also called corporate conscience; corporate citizenship, social performance, or sustainable responsible business/ Responsible Business) is now employed as a strategy to meet the ethical and social needs of the society as there is usually an unwritten contract today between customers and brands they buy. Customers expect the company they patronize to constantly deliver what they advertised and expect the company to treat them with respect and be honourable and forthright in the eyes of the society. (Kotler 2010).

Social responsibility refers to the obligation that organisations have to preserve the ecological environment and to serve the general public: (Kerin, 2004). This definition goes ahead to emphasize that for any company to be socially responsible, the environmental effects and customer interest must be considered as they seek to serve their customers. This recent interest in social performance has brought to the fore the relevance of the societal marketing concept, which postulates that a company's marketing decision should consider consumer want, the company's requirements, customers long-run interest and the society's long run interest.' (Kotler, 2010).

Similarly, the Chartered Institute of Personnel and Development (CIPD) considers CSR to involve corporotions taking responsibility for their "impact economically, socially, environmentally and in terms of human rights" (CIPD website). The UK Corporate Responsibility Bill (2002) suggests that corporations should "take all reasonable steps to minimise any negative environmental, social and economic impacts" (Article 7b). These definitions tend to emphasise the avoidance of harm, based on the notion of a shared responsibility towards 'stakeholders' and the achievement of sustainability. A growing body of evidence asserts that corporations can do well by doing well. Well-known companies have already proven that they can differentiate their brands and reputations as well as their products and services if they take responsibility for the well-being of the societies and environments in which they operate. These companies are practicing Corporate Social Responsibility (CSR) in a manner that generates significant returns to their businesses. Therefore, this work seeks to explore how corporate social responsibility goes on to determine the brand preference of a company amongst others in the telecommunication sector critically examining MTN Nigeria.

1.2 STATEMENT OF PROBLEM

MTN group released its full year result for its financial year ended December 2010, showing that MTN Nigeria remains the most profitable in its global operations with a total revenue of
N749 billion (www.mtngroup.com). MTN Nigeria has been able to achieve this level of profitability because the Nigerian society as its host community. Has accepted its services and patronized them; it would appear that its patronage is tied to the level of the company's CSR.

Using activities of the last six years as a base, MTN has contributed for the welfare of Nigerians: the sick, the youth, students, etc. The company has provided them with small loans to start businesses, organize skill acquisition seminars. In the health sector, MTN has also financed surgeries for selected ill members of the public, built a free dialysis centre amongst others. In the area of education, they have built ecliorqres in some selected universities (UNN, UNIBEN, ABU, and UNILAG), awarded scholarships to students and provided learning materials for some secondary schools, Going by the level of brand preference 'evidently enjoyed by MTN in Nigeria, it appears also that these popular activities have helped to reinforce it. Based on this premises, the researcher wants to examine the extent to which MTN’s activities such as youth empowerment, health improvement and educational assistance can influence the consumers prefer their products to their competitors products

1.3 OBJECTIVE OF STUDY

The general objective of this study is to examine the influence of corporate responsibility in brand preference in the telecommunication industry.

More specifically this research seeks to achieve the following:

1. To examine the extent to which MTN's youth empowerment program influences preferential patronage for its services.

2. To determine how its health improvement program has contributed to the patronage of its services.

3. To determine how MTN's CSR activities on education has any impact on its building of brand preference.

1.4 RESEARCH QUESTIONS

1. Does MTN's CSR on youth empowerment influence preferential patronage for its services?

2. Has MTN’s CSR on health improvement contributed to its patronage?

3. Has MTN's CSR on education had an impact in the building of brand preference for the company?

1.5 TEST OF HYPOTHESIS

1. Ho  MTN’s CSR activities on education has no impact in the building of brand preference for the company?

2. H_o: MTN’s effort on health has not contributed to its patronage.

3. H₀: MTN’s youth empowerment programme does not influence preferential patronage for its services

1.6 SIGNIFICANCE OF THE STUDY

The study of the influence of CSR on brand preference in telecommunications industry will be of great significance to the following persons and groups. The outcome of this work would help to intimate the management of MTN of the very crucial role played by its CSR activities in building its brand and increasing its preference.

It will also be of great benefit to the customer and also the society at large as it will educate them on various CSR activities carried out by MTN and how to benefit from them.

It will also be of benefit to the government as they would see through this work the need for companies to be socially responsible and therefore put measures in place to encourage companies to adopt the concept of CSR.

1.7 SCOPE OF THE STUDY

For the purpose of this research and in order to ensure-effective and efficient result, the researcher limited his studies to just MTN's CSR activities which are youth empowerment, health and education, this study was limited to Umuahia Metropolis .

1.8 LIMITATION OF STUDY

In the course of this research, the researcher encountered some problems such as time constraint, insufficient fund, and unavailability of some relevant materials. The short period allowed for the researcher to collect some relevant data and the finance at the disposal of the researcher was not enough to enable him carry out more research.

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