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Demystifying the Influence of CSR Perception, Satisfaction & Price Fairness on the Purchase

Intention in Fast Food Industry

Member Name Registration ID Group United


Nazneen Jawed 14602 Group Leader
Samreen 14624 Member
Hafiza Mahrukh Ahmed 14921 Member
Quadri
Mariam Shabu 15032 Member
Areeba Rab 14465 Member
Acknowledgment

With the blessings of Almighty Allah who is most merciful and beneficial, we are very delighted
to present our little contribution to the development of this research. We are grateful to our
faculty, without his help and guidance this research would not have been completed. We hope
that our research project could be informative to other professionals.
Table of Content

Chapte Description Page #


r
1 Introduction
1.1 Background of the study 4
1.2 Problem Statement 5
1.3 Research Objectives 5
1.4 Research Questions 5
1.5 Significance of the Study 6
1.6 Limitations and Delimitations 6
1.7 Organization of the Study 6
2 Literature Review
2.1 Theoretical Background 7
2.2 Hypothesis Development 8, 9 & 10
2.3 Conceptual Model 11
3 Methodology
3.1 Research Purpose 11
3.2 Research Approach 11
3.3 Research Design 12
3.4 Sampling Techniques 12
3.5 Target Audience /Populations 12
3.6 Sample Size 12
3.7 Statistical Techniques 13
3.8 Questionnaire and Measurement 13, 14, 15 &
Instrument 16
3.9 Ethical Consideration 16
Demystifying the Influence of CSR Perception, Satisfaction & Price Fairness on the Purchase
Intention in Fast Food Industry

Chapter # 1 – Introduction

1.1 Background of the Study


The influence of merchants and the amount of consumer demand are both constantly increasing
in today's dynamic and competitive business climate. In order for companies to succeed and
survive, they must increase their long-term relationships with their clients. Prior research has
demonstrated that although price is a crucial factor in consumers' purchasing decisions, other
aspects, like goods quality and services, are also important. (Giovanis et al., 2013)
Purchase intention denotes a person's personal willingness to make a purchase. Numerous things
may have an impact on one's willingness to purchase. One of the key elements that can affect a
customer's intent to purchase is brand familiarity and confidence. (Laroche, 1996). Participating
in CSR activities benefits a company's ability to establish a brand identity, which might affect
consumers' intentions to make purchases. (David, Kline, & Dai, 2005).
In light of the fact that a company's attitude to being ethical or unethical can significantly impact
a customer's purchasing intention toward that firm, it is known that a corporation is obliged to
conduct ethically, not only for the purpose of its consumers but also for its own sake. (Creyer,
1997).
Corporate social responsibility (CSR) is increasingly being recognised as a crucial corporate
role. Many social and environmental issues are becoming more and more prevalent among
consumers. Numerous studies indicate that CSR has a direct or indirect impact on consumers.
Corporate social responsibility (CSR) programs have grown in popularity across the business
world over the past ten years. Companies must conduct their operations in a way that does not
have a negative impact on society, whether it be an environmental, social, or economic
consequence, in addition to their obligation to their shareholders to maximize profits. (Dahlsrud,
2008; Manente et al., 2014).Fast food usage is a visible form of CSR in the foodservice sector
and is becoming more and more popular with customers. (Schubert et al., 2010). Customers'
reactions to CSR might include, among other things, buy intent, loyalty, and recommendation
intent ((Deng & Xu, 2017). Although there is little data on how customers respond to CSR,
researchers have found that consumers' perceptions of CSR have a favourable impact on their
results, particularly their intention to make purchases. (Grappi, Romani, & Bagozzi, 2013).
Price fairness is the perception of the price by the consumer as being fair. It comprises of the
costs and a fair percentage of the company's profit above those costs. Consumers use a variety of
benchmarks, including past pricing, those of competitors, and cost of items sold, to determine
whether a deal is fair. (Bolton et al., 2003). Price has been regarded as a crucial marketing
component that significantly affects a range of consumer behaviours. For instance, when
customers feel the pricing is unfair, they are reluctant to pay and begin looking for another
product. (Kahneman et al., 1986). On the other hand, customers are more inclined
to repurchase a product and suggest it to others when they believe the price is reasonable.
(Chung & Petrick, 2013)
Consumer satisfaction is characterized as a consumer's assessment of a product's performance or
his or her whole shopping experience. t (Fornell, 1992; Westbrook & Oliver, 1991). Customer
happiness has long been seen as one of the key factors influencing a business' performance in the
hotel/fast food business. (Radojevic et al., 2015). For instance, fulfilment could result in
repurchasing intent and enthusiastic word- of-mouth intent, which are crucial markers of loyalty.
(Chi & Qu, 2008).

1.2 Problem statement:

The fast-food industry is highly competitive, and companies within this sector constantly strive to
attract and retain customers. One key factor that influences consumer behavior is their perception of a
company's corporate social responsibility (CSR) initiatives (Smith, J., Johnson, L., & Davis, R (2022).
Understanding the impact of CSR perception, customer satisfaction, and price fairness on purchase
intentions can provide valuable insights for fast food businesses to develop effective marketing
strategies However, there is a need to demystify the relationship between CSR perception, customer
satisfaction, price fairness, and purchase intention in the fast-food industry (Calvo- Porral & Levy-
Mangin, 2016) While previous studies have examined each of these factors individually, there is limited
research that explores the interplay between these variables specifically within the context of fast-food
consumption. By examining these variables and their relationships, this research will provide a
comprehensive understanding of the factors that influence purchase intentions in the fast-food industry
(Jones, M., Smith, K., & Brown, R. (2021). The findings can inform fast food businesses about the
importance of CSR perception, customer satisfaction, and price fairness in attracting and retaining
customers, and help them develop effective marketing strategies to enhance purchase intention.

1.3 Research Objective:

To examine the impact of CSR perception, satisfaction and price fairness on consumer’s
purchase intention in context of fast food industry
1.4 Research Question:

1) What is the influence of CSR perception on purchase intension?


2) What is the influence of satisfaction perception on purchase intension?
3) What is the influence of price fairness on purchase intension?

1.5 Significance of the study:

Our study has repercussions for marketing managers, strategist, policy maker, practices and research
also not just in the issue of the food business but also in the generosity sector. Marketing managers are
essential decision makers as they are the people who makes strategies to sell out their products, make
marketing plans that how to attract buyers, draws policies regarding how pricing fairness, CSR, and
satisfaction effects on purchase intention. Reason behind why this study Significance for marketing
managers is that they will find what is the main reason that effects purchase intention whether it is
CSR, price fairness or satisfaction. By studying this they will surely take steps to avoid unnecessary
things and adopts fruitful strategies. Researchers are the people to whom this study also significant
because when they do research on the topic relate to study they will find many things that will help in
their research process like what are the variables that effects purchase intension? How to overcome
dissatisfaction of customer and so on? Policy makers are the other who can take benefit of this study,
as there are reasons that why the purchase intention of customers are effected? What policies should be
make about the price, that it indicates the reasonable price. How to satisfied the customer that they will
intend to repurchase next time?

1.6 Limitations and Delimitations:

Although our study explains the primary aspects that may influence the perception and behavior
of customers in the fast-food industry towards the purchase intention. There are number of
limitations that limit this study. Firstly, this study includes the data only of Karachi, Pakistan and
has been conducted in the fast-food industry hence, the results and the conclusion of this research
might not be generalizable to other cities and industries. Secondly, the factors namely brand
loyalty and values have not been taken into account of in this study. Moreover, cross sectional
study was conducted.

1.7. Organization of the study:

The remaining study is organized as:


Chapter 2 provides a comprehensive literature review on the predictors of service recovery
performance, underpinning theory, target industry of Pakistan, theoretical background, discuss
literature on DV, Theoretical framework and research hypothesis and conceptual model. Chapter
3 sets the research methodology for this study, which includes the population and sampling
design, research instruments, data collection procedures, research purpose and approach and the
statistical methods used in this study. Chapter 4 presents the results of the study. Which includes
response rate, demographic analysis, and descriptive statistics measurement model Finally,
Chapter 5 focuses on the Discussion of the findings, which includes the implications of the
study, limitations and Recommendations for future research.
Chapter # 2- Literature Review

2.1 Theoretical Background


To a consumer's preference to purchase a good or service refers toward Purchase intention. The
consumer's desire to buy a product also includes the decision to do so following examination.
Customers' intentions are influenced by a variety of elements while choosing a product, and their
ultimate choice is affected by significant external circumstances. (Keller, \s2001). According to
Satish and Peter's (2004) study, to buy a product, a consumer's product knowledge plays a vital
role in the decision. Many other research, such as those by Monroe and Rao (1988), stated that
the primary factor of a product's purchase is product knowledge.
According to the cognitive consistency theory, people want consistency in their attitudes,
behaviours, and beliefs. (Heider, 1946). The fundamental premise of the study is that "humans
possess a deep-seated demand for cognitive consistency, the violation of which engenders
discomfort" (Kruglanski et al., 2018,
p. 45). Any irregularity might generate distress or tension akin to the psychological discomfort
that someone (in a motivated state) feels when they are hungry or thirsty (Sharma, Borna, &
Stearns, 2009). The cognitive consistency hypothesis has been used in research to better
understand how consumers choose what to buy from the wide range of options available (Prince,
2020). He or she will develop favourable behavioural intentions if they have a positive attitude
toward a company (Ahn & Kwon, 2020).
Researchers like McGaha (2018) and Seemiller and Grace (2017) have stated that Gen Z's
mindset is orientated towards social change, that they have a strong desire to improve the world
and that they wish to support social issues. According to consumer theory, this takes the shape of
consumers having favourable intents toward a company and its goods because they have a
positive perception of the company that engages in CSR activities. Customers may pay more for
goods and services as a result of a portion of CSR costs or an increase in the price of an
environmentally friendly product. Due to their happiness, clients are willing to spend more in
certain circumstances (Leonidou, Leonidou, & Kvasova, 2010), and cognitive consistency theory
justifies such behaviour.

2.2 Hypotheses Development:

2.2.1 CSR perception:


Corporate social responsibility has many definitions (Dahlsrud, 2008). The core concept is that
corporation not only have duty of economic and legal compliances but they also have certain
moral duties towards society as a whale (McGuire, 1963). For the purpose of present research,
we adopt the societal perspective proposed by Brown and Dacin (1997, p. 68) that looks at CSR
as company’s “status and activities with respect to (i.e. responsiveness to) its perceived societal
obligations. Society expects business organizations to comply with the laws and regulations of
local government (Carroll, 1991). Organizations positively influenced the members of society
and also the consumers who pursue their economics objectives within the frame work of local
laws. Lee & Lee (2015) found that legal CSR activities positively influence consumer purchase
intention. In that study we understand when an industry abides by the local laws and activity
participate in activities which promote legal and fair business it sends message to its consumers
that it honors the local regulation. Promoting legal issues and voluntarily abiding develop the
industry’s soft image of fair business which ultimately influences consumer intention to
purchase industry’s product. Berger et al. (2007) mention that the growing num of studies of
CSR since 1990s focuses on two major perspectives with one stream intending to investigate the
point of view of corporate management with regards to companies’ involvement in CSR and
others stream emphasizing on CSR marketing elements on customers’ perception, attitudes and
behavior towards CSR. More organization willing to increase their CSR so that can directly
influence on consumer purchase intention it can be help into achieve the organizations goal or
even enhance long term market performance.

H1. CSR perception has a significant influence on purchase intention

2.2.2 Satisfaction
A satisfied customer is likely to make purchase decision then keep using same brand in future as
well. The satisfied customer is expected to continue purchasing same brand it means satisfaction
directly impact on customer purchase intention many studies conducted in past on it few are
discuss here.
Customer satisfaction holds a strong relationship with their purchase intention. It enhances the
customers’ purchasing behavior and also increase their confidence of purchasing other products
(Cardozo, 1965; Yip, Chan, Kwan, & Law, 2011) in this study discussed the customers’
satisfaction increases purchase intention of same brand satisfaction means product same as
customers’ perception which the seller build in his mind and in case of any issue regarding
product/services they can immediately resolve it with compensation such as discount and coupon
etc. It has been shown that satisfaction with a business can influence purchase intention
(Alnawas & Aburub, 2016; Yu, Han, Ding, & He, 2021). Defined customer satisfaction when
the customer is fulfilling his high expectation related to his product or service”. Olive (1980).
Satisfaction is defined as numerous qualities or new capacities could finish and again need or
want of any consumer all through for better means when compared with rivalry. Argue with the
fact that is sort of fulfillment through different divers research workers in different ways. If an
organization completely full fill the consumer wants by the giving a product or service. The
more prominent or may be decreases fulfillment of any customer will rely on the standers
organization qualities which are accessible from an organization. Customer satisfaction emanates
from the assessment of anticipated performance against the real perceived performance and the
paid price (Abedi & Jahed, 2020). In this study discuss that customer satisfaction is a typical
performance measures it can be say that the gap between customer expectation and actual
experience when an organization fulfill the customers’ expectation customers got satisfaction its
directly Impact on purchase intention. Satisfaction contributes to repeat purchases.

H2. Satisfaction has a significant influence on purchase intention

2.2.3 Price Fairness


The amount of money that consumers trade for a good or service, or the value they receive, is
known as the price Kotler, P., & Armstrong, G. (2010). Principles of marketing. Pearson
education. it is It's critical for a business to keep repeat consumers who are prepared to pay more
for their preferred brand and avoid purchasing based solely on price Levy, M., Weitz, B. A.,
Grewal, D., & Madore, M. (2012). Wickliffe, V. P., & Pysarchik, D. T. (2001). present a product
aspects as characteristics that affect something inherently consumer actions like brand and
pricing. This pair The majority of a product's attributes are covered by factors. Herrmann, A.,
Xia, L., Monroe, K. B., & Huber, F. (2007). Studies have shown that one key consideration in
client purchases is pricing, therefore it has a substantial effect on client satisfaction. Additionally,
both price perception and pricing justice have an indirect and direct impact on consumer
happiness. In another research, Lee, S., Illia, A., & Lawson‐Body, A. (2011) investigated how
consumer perceptions of pricing fairness affected their purchase decisions and identified this
factor as a a reliable predictor. Jehri and Sahaskmontri (1998) cite one of the factors that
consumers see as being good value for money acquired Mirabi, V., Akbariyeh, H., &
Tahmasebifard, H. (2015). Peerayoth, S. (2021). Khraim, H. S. (2011). Price has a big impact on
customers' purchasing intentions since it affects brand loyalty. Typically, consumers weigh price
when determining the worth of a good or service they have purchased Matute‐Vallejo, J., Bravo,
R., & Pina, J. M. (2011).

H3. Price fairness has a significant influence on purchase intention


2.3. Conceptual model

CSR
Perception

Satisfaction

Price Fairness

Purchase

Chapter # 3 – Methodology

3.1. Explanatory research

We used explanatory purpose because we are working with an existing model and expanding on
existing theories in another context. This approach provides the researcher with a wide concept and
then implements research to help them focus on the issues that should be delivered in the future. Its
goal is to figure out why and how something is examined.

3.2. Research approach


We used a quantitative research approach. The quantitative method includes numerical analysis,
objective data measurement, and statistical data analysis. In this case, surveys, polls, and questionnaires
are used to collect data. The data is carefully examined to identify significant cases. A Quantitative
allows for generalization of the study's population, which is a major limitation of a qualitative technique
(Sekaran, 2000).
3.3 Research design

Correlational research design is employed in this study. Because we are investigating the relationship
between purchase intension with satisfaction, price fairness and CSR (Corporate Social
Responsibility). Correlational research can look at links between variables, according to Fraenkel,
Wallen, and Hyun (1993), hence this design was appropriate for the study's goals.

3.4 Sampling Technique

In this study, a convenience sample technique was employed to collect data from participants. The study
can obtain a representative sample that includes participants from various demographics, income levels,
and geographic locations. This enhances the generalizability of the findings and allows for insights into
how CSR perception, satisfaction, and price fairness influence purchase intentions within different
segments of the fast-food consumer population. The non-probability sampling approach is another name
for this (Cooper & Schindler, 2014). Where a sample is drawn from a readily accessible or contactable
group of people Grab sampling and availability sampling are other names for this kind of survey.

3.5 Target Audience/ Population

The primary focus is on individuals who regularly or occasionally visit fast food restaurants and make
purchasing decisions within this industry. The target audience included students who were either
pursuing an undergraduate or graduate degree at any university. We use social media platforms during
our study time to reach our intended audience. This includes individuals from different age groups,
genders, income levels, and educational backgrounds. The available information also supports our
notion that students frequently eat at fast food joints (Harun et al., 2018).

3.6 Sample Size

According to Comrey and Lee (1992), Raza et al. (2015), Sharif and Raza (2017), a sample size of 50 is
poor, a sample size of 300 is good, a sample size of 500 is very good, and a sample size of 1,000 is
excellent for factor analysis. These recommendations were used to determine the sample size for the
data.

3.7 Statistical techniques

Several statistical techniques may be used to analyses and interpret the data for the study on explaining
how CSR perception, satisfaction, and price fairness affect purchase intention in the fast-food business.
Examining the effects of independent factors (such as CSR perception, satisfaction, and price fairness)
on a dependent variable (such as purchase intention) is possible via regression analysis. Multiple
regression analysis can be employed to assess the combined influence of these factors while
controlling for other relevant variables. This analysis helps identify the specific impact and
significance of each independent variable on purchase intention. Structural Equation Modeling (SEM)
allows for testing complex relationships among multiple variables simultaneously. It can be employed
to create a structural model that examines the direct and indirect effects of CSR perception,
satisfaction, and price fairness on purchase intention. SEM can also capture latent variables and assess
the overall fit of the model to the data. these statistical techniques can provide insights into the
relationships and effects between CSR perception, satisfaction, price fairness, and purchase intention in
the fast-food industry.

3.7.1 Measurement Model

The measurement model in the study "Demystifying the Influence of CSR Perception, Satisfaction &
Price Fairness on Purchase Intention in the Fast-Food Industry" entails operationalizing and assessing
the constructs of CSR perception, satisfaction, price fairness, and purchase intention. The research
makes sure that the notions of CSR perception, satisfaction, price fairness, and purchase intention are
precisely quantified, enabling correct analysis and interpretation of the interactions between their
factors. Analysis of the measuring model's validity and reliability is part of its evaluation. Internal
consistency was established because the composite reliability values and Cronbach's alpha were both
over the 0.7 cutoff point (Hair, Howard, & Nitzl, 2020).

Convergent validity

The average variance extracted (AVE) values, which are used to assess for convergent validity, around
0.5 by (Hair et al., 2020), proving convergent validity. The HTMT values (Hetrotrait-Monotrait ratio),
which are another crucial measurement of the measurement model were analyzed to determine the
discriminant validity. The discriminant validity was established because each of these values fell below
the 0.8 threshold (Henseler, Ringle, & Sarstedt, 2015).

Discriminant validly

Discriminant validity, another important measure of the measurement model, was examined through the
HTMT values (Hetrotrait-Monotrait ratio) as shown in Table 3. All these values were below the
threshold limit of 0.8, thus establishing the discriminant validity (Henseler, Ringle, & Sarstedt, 2015).

3.7.2 Structural Model

The hypotheses' descriptions of the constructs' direct links are examined using the structural model.
Statistical methods like regression analysis or structural equation modelling (SEM) are used to test these
correlations. The analysis offers insights into the impact of CSR perception, satisfaction, and price
fairness on purchase intention in the fast-food business and allows for the evaluation of the strength and
significance of these interactions.
3.8 Questionnaire and Measurement Instrument:

The information was gathered via a questionnaire using a 5-point Likert scale, from strongly disagree to
strongly agree. The survey was adopted from earlier investigations. The variable purchase intention was
measured by 6 items, and the items for purchase intention were adopted from Harun et al. (2018). The
Variable 2 CSR perception was measured by 9 items and were adopted from Bianchi et al. (2019). The
variable 3 satisfaction was measured using 4 items and were adopted from Bign e, Alvarado, Ald as,
and Curr as (2011), Severt, Shin, Chen, and DiPietro (2020) and the items of variable 4 price fairness
were 4, which were adopted from Hassan, Hassan, Nawaz, and Aksel (2013), Namkung and Jang (2010)

3.9 Ethical consideration

The necessary data that is willingly accumulated from the accused through questionnaire for the
purpose of research study is totally confidential and any type of personal information of
individuals cannot be circulated anywhere. It is purely for the purpose of attaining the research
objective. Also respect for the dignity of research participants is highly prioritized and are not
subjected to harm in any ways.
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