THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY PRACTICE ON BUILDING BRAND EQUITY: THE CASE STUDY OF HILTON ADDIS ABABA

Abstract

Corporate social responsibility (CSR) is becoming a tool for competitive positioning. It is the basis for brand choice among other advantages and therefore described as a strategic tool in marketing. In-spite of these observations, there appears to be a rarity of studies, linking CSR to brand equity. This study therefore ascertains the role of CSR initiatives in building brand equity dimensions. Both quantitative and qualitative research approaches and explanatory research design were used. Primary data was collected using a five-point Likert scale. The study had 100% response rate. Statistical Package for the Social Sciences (SPSS) version 21 was employed to analyze the data. Relatively a high level of agreement was observed on societal CSR dimension of CSR with a mean score of 4.45. The correlation result indicates significant association between CSR to stakeholders and brand equity with the value of 0.982. Furthermore, a relatively high level of significant association of environmental and societal CSR with brand equity was observed with the value of 0.906 and 0.816 respectively. Further, the three assumption tests were checked before regression analysis was undertaken. These are Normality, Linearity and Multi-collinearity. It was found that there is a reasonable normal distribution and linearity on the collected data and less multi-collinearity between the variables. The variations explained by the regression of CSR practices on brand equity are 97.4%. There is a relatively good fit between the model and data. According to the main findings, CSR to stakeholder’s environmental and societal CSR practices have a positive and significant effect on brand equity. Thus, based on the findings of the study, the organization is recommended that among the three major aspects of social responsibilities more CSR attention needs to focus on improving stakeholders’ interests