THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON SALES

PERFORMANCE: THE CASE OF HAWASSA MILLENNIUM PEPSI

COLA PLANT, HAWASSA CITY

THESIS PROPOSAL SUBMITTED A PARTIAL FULFILLMENT OF THE

REQUIREMENTS OF MASTER’S DEGREE IN MARKETING
MANAGEMENT

BY: GETACHEWLAPISO

ADVISOR: TESHALE TEREFE (PHD)

OCTOBER, 2O23 G.C

SHASHAMENA, ETHIOPIA
CHAPTER ONE ............................................................................................................................................. 1
1. INTRODUCTION ....................................................................................................................................... 1
1.1 Background of the study ....................................................................................................................... 1
1.2 .Statement of the problem ................................................................................................................... 5
1.3 Research Questions .............................................................................................................................. 5
1.4 Research objectives .............................................................................................................................. 6
1.4.1 General objectives ............................................................................................................................. 6
1.4.2 Specific objectives .............................................................................................................................. 6
1.5. Research Hypotheses ........................................................................................................................... 6
1.6. Significance of the study ...................................................................................................................... 6
1.7. Scope of the study ............................................................................................................................... 7
1.8. Organization of the paper .................................................................................................................... 7
CHAPTER TWO ............................................................................................................................................ 8
2. RELATED REVIEW LITRATURE .................................................................................................................. 8
2.1. The Evolution of the Theory of CSR ............................................................................................... 10
2.1.1 Theories ........................................................................................................................................... 11
2.1.2. Importance of CSR Practices ..................................................................................................... 14
2.2. Empirical Review ................................................................................................................................ 17
2.3 Conceptual Framework ....................................................................................................................... 22
CHAPTER THREE ........................................................................................................................................ 23
3. RESARCH METHODOLOGY .................................................................................................................... 23
3.1 Description of the study area .............................................................................................................. 23
3.2. Research Design ................................................................................................................................. 24
3.3 Types and source of data .................................................................................................................... 25
3.4 Population of the Study ...................................................................................................................... 25
3.5 Tools and Methods of Data Collection ................................................................................................ 26
3.6 Data Processing and Analysis .............................................................................................................. 27
3.7 Validity Test ........................................................................................................................................ 28
3.8 Research Ethics ................................................................................................................................... 28
3.10 Budget Breakdown/Cost breakdowns............................................................................................... 29
Time and Budget Table ............................................................................................................................. 30
3.11 References ........................................................................................................................................ 31

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 Statement of deceleration
I, the undersign declare that the research proposal titled the impact of corporate social
responsibility to the marketing performance case of MOHA is my work has not been for degree
in any university and that all source of material used for the thesis has been duly acknowledged

Declared by --------------------------sign-------------------date----------------

Confirmed by advisor

Name Dr-------------------------sign-------------------date-------------------

II
 Acknowledgment
I wish to thank my almighty God for giving ne the gift of life to write this work. And
also I wish to express my attitude to my advisor Dr. Teshale Terefe for his
professional guidance and notification that enable me to write this proposal

III
 CHAPTER ONE
1. INTRODUCTION
1.1 Background of the study
The current believe that corporation have responsibility toward society is not new infect ,its
possible trace the business concern for the society several countries back(carrol
2008)however ,it was not until the 1930s and 40s when the role of executive and the social
performance of corporation began appearing in the literature (carrol999)and author began
discussing what were the specific responsibilities of companies In the late nineteenth century,
firm raised question about their workers’ health and their overall effect on society with the
rise of labor movement and the spread of slums crated by the industrial revolutions.
Corporation began to provide minimal social welfare, included the building of hospital and
bathroom of the distributions of food coupons(carrol2008)

The concept and definition of CSR has evolved overtime and the alternative interpretation
and approaches has been emerged CSRhas been defined in several, but very much related
way by various scholars ,institutions and international organizations, but there is no general
consensus on the term(hopkin2003) the reason of lack of an agreed definition in the ever
changing and dynamic nature of the concept of CSR and its interchangeable and overlapping
character with other related term are usually mentioned (Nasrulla and Rahim2014)

Bowen define CSR as it refers to the obligation of business man to peruse to polices, to make
those decisions, or to follow those lines of action which are desirable interims of objectives
and values of owner society(Bowen2013)According to the world business council of
sustainable development (WBCSD) ‘corporate social responsibility is continuing
commitment by business to behave ethically and contribute to economic development while
improving the quality of life of the workforce and their families as well as the local
community and society at large”(chunget al..,2015)Carrol identifies four dimensions for CSR.
The corporate social responsibility concept has encompassed economic legal end ethical and
philanthropic (discretionary) activates of business performance at a given point in time. The
approach essence passes whole range of responsibility of affirm”(carrolA.,1997)As the
review of related literature show, Africa does not have a positive score in the development of
literature and other scholarly articles in CSR(Visser, 2008). Ethiopia is among the
undeveloped nations in terms of the development of literature in the area.There is increasing
trend in the number of bottled water manufacturing companies in Ethiopia engaged in the
production and sale of potable water in the form of packaged/bottled soft drink for safe

1
drinking by branding soft drink as a commercial product (Ensermu, 2014).According to
Central Statistics Agency annual report of Ethiopia (2016) , the number of manufacturing
bottled soft drink companies in Ethiopia increased dramatically and has contributed much to
the growth and development of Ethiopian economy (CSA, 2016). It has also offered
emerging employment opportunities and participating in social responsibilities.

In Ethiopia, soft drinks have become essential part in lifestyle of the people in the society.
There are number of soft drink brands are available in the market. In those brands, some
brands are very famous not only in Ethiopia but also globally. A soft drink is a cold beverage,
usually sweet drink, which does not contain alcohol. In Ethiopia, soft drinks are known by the
Amharic word "leslassa", meaning literally "smooth" (Aregawi ,2006). Soft Drinks Industry
is one of the processing industries that play an important role in the economic development,
especially for developing countries like Ethiopia. Even if industry constitutes a very few
number of companies, There is stiff competition in the industry. Therefore, to get acceptance
in the market and to increase sales volume promotion is prominent tool that affect consumer-
buying behavior positively. In contrast to this, in-effective operation of promotion can waste
millions of Birr and actually damage the image of company and its products (Aregawi, 2006).

Thus, this study attempts to assess the impact of promotion on the buying behavior of
MOHA soft drink industry products consumers` in Hawassa city.Historical Background of
MOHA and Hawassa millennium Pepsi cola pant Pepsi cola traces its origins to 1898 when
Caleb Brad ham, a pharmacist in New Bern,North Carolina, created a curative drink for
dyspepsia called Pepsi cola. Pepsi cola later referred to simply as Pepsi was mixture
carbonate water, cane sugar syrup, and an extract from tropical cola nuts. To sell this product,
Brad ham formed the Pepsi cola company in1903. In addition to selling the drink at drugstore
Counters; Brad ham bottled Pepsi for sale on store shelves. At this time, bottling was a new
innovation in food packaging. However, due to major increases in the price of sugar, Braham
began to lose money on Pepsi and in 1923; he failed for bankruptcy
(http://www.Wikipedia.com).

The craven Holding company of craven country, North Carolina, Purchased the company's
assets. In 1931 Charles G. Guth of the loft company in New York City Purchased Pepsi-Cola
from the holding company. Guth had difficulty getting the business going again, but he
increased sales by selling larger bottles at an unchanged price. By 1933, 313 franchised U.S.
dealers bottled in the United States, Cuba, sold Pepsi Cola and England sold in 83 countries

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(WWW.Wikipedia .com, processed in Oct 14, 2014) When did Pepsi started in Ethiopia?
Nefas Silk Pepsi Cola is the first Pepsi cola plant in Ethiopia and it was established in 1966;
as a share company with an initial capital of 1 Million Birr. The capacity of the bottling line
at that time was 20,000 bottles per hour (bph). In 1986, the plant was renovated and expanded
to a capacity of 50,000 bph with twin fillers. Total renovation and expansion investment cost
was Birr 6,647,944.00 (aregawi, 2006). MOHA soft Drinks Industry S.C was formed and
registered under the commercial code of Ethiopia on May 15, 1996. This company was
formed after the acquisition of four Pepsi cola plants located at Addis Ababa (Nefas Silk and
Tekle haimanot), Gondar and Dessie, which were purchased by Sheik Mohammed Hussien
Al-Amoudi in 18 January 1996, through BID, which was tendered by Ethiopian privatization
Agency. It was initially obsolete, inefficient and poorly managed. The initial purchase price
was US $17.5 million and the overall attainable volumes at the time were not exceeding five
million cases. Since then, additional investment birr 382 million for refurbishment and
construction of new plants; birr 458 million for marketing infrastructure excluding
advertisement and sponsorship expenses were made (MOHA employee handbook).

Hawassa millennium Pepsi cola plant is situated 275k.m south of Addis Ababa at southern
edge of Hawassa city. This is surprisingly developing at alarming rate and attractive town and
capital of the SNNPRS and Sidama zone, to the left side cross of main high way to Moyale-
Kenya (MOHA employee handbook).

It is established on the area of 2500 m2 adjacent to Awassa Textiles and Awassa cheep wood
factories. It is licensed under MOHA soft drinks industry as seventh plant of its sister
companies. In 1999, the foundation of the plant laid and completed the whole building as
well as machinery erection in august 2007 to start production. The plant was inaugurated on
September 03/2007 & start producing its licensed products for its customers officially
(MOHA employee handbook).
As its applying very sophisticated machinery and modern technology, it is producing
36000bottles per hour of 300-ml. Soft drink products like Pepsi, Miranda orange, 7up,
Miranda tonic & Miranda Apple are producing by the plant. In addition to these, the plant
also producing co2 gas for home consumption and supply it for customers who need it for
food preservation purpose. To produce the mentioned products MOHA soft drinks industry
got a franchised license from Pepsi cola international. For this Pepsi Cola international (PCI)
controls and approves the quality of products produced by the company (MOHA Employ
Handbook, pp12-14).

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The product mix of company
✓ Pepsi cola (Cola flavor) with bottle and PET packages
✓ Mirinda (Orange flavor) with bottle and PET packages
✓ 7 up (Lemmon flavor) with bottle and PET packages
✓ Mirinda Tonic with bottle package
✓ Mirinda Apple with bottle and PET packages
✓ Kool bottled mineral water
The Organizational structure
The Division Heads at the Head office mainly deal with conceptual activities to support the
CEO. The plant general managers are delegate with autonomous right to direct, organize,
plan, control and administer the overall operation of their respective plants within the limit of
their approved budget (MOHA Employ Handbook pp 8-14).

The CSR activities are treated as an investment not as a cost or expense where it shows the
relationship between corporation and the stakeholders such as the customers, investors,
employees and society as a whole. The business’s purpose is not only to earn profit but also
the welfare of the society as well. Some studies have shown the positive correlation between
the CSR and financial performance while other studies show the negative relationship
between them. Each company performs differently for the implementation of CSR depending
on different factors like the culture of the organization, size or the stakeholder demand
(Spicer, 1978).Ethiopia is a developing country with problems such as low literacy rates,
electricity power crises, lack of infrastructure, etc. Under these conditions, the government's
welfare role is unrevealing. Therefore, organizations have an opportunity to increase their
welfare role for the society in exchange of better reputation and growth in business which
ultimately leads to strong financial performance and high profitability. The society in general
faces many problems in developing countries. So CSR should contribute to addressing these
issues and challenges. This research examines the impact of CSR on sales performance at
MOHA soft drink Factory.

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1.2 .Statement of the problem
People who stand against the practice of CSR bring forward profitability and related issue to
warn the business should keep themselves away from CSR practice for instance. Fried man
stress the CSR should not be the responsibility of the business firm according to him there is
one and only one social responsibility of business to use its resources and engage in activities
designed to increase its profit so long as it stays within the rules of the game(Hopkins,200)
other from the outset don’t believe the act as responsibility of business fried man and other
writers in this category, do not see much about the success rather the failure of business that
endeavor to promote asocial good Levitt thought that social concern and the general welfare
were not the responsibility of a business, but government He believe that was so essential for
business success ( carol and shaban 2010)

However the majority and increasing number of entities stand against this view they consider
CSR as important as the major line of business of an organization as many scholars writers
and interest group argue carrying out social responsibility duties by no means compromise
business objectives but rather support it CSR can differentiate accompany from its
compotators by engendering consumer and employs good will(Mc Williams &siegale 2001)
ideally well managed CSR crates social and environmental value while supporting a
company business objectives and reducing operating cost and enhancing relationship with
key steak holders and customers. It is therefore imperative that correlation establish a CSR
unit(Rangan,chase and karim(2012)

The major important of this paper is to evaluate how important CSR is in attaining the
overall sales performance of a business organization therefore this study aims at
quantitatively measuring CSR activities of MOHA soft drink industry at their effect on sales
performance.

1.3 Research Questions

Investigating the relationship between the major dependent variable /sales performance and
the independent variable is the major concern of the research in due course the research
mainly supposed to answer the following general and specific questions

1. What extent customer oriented responsibly effect on sales performance of MOHA Soft
Drink Company?
2. What is the impact of community oriented responsibility on sales performance of MOHA
Soft Drink Company?

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3. What are the effects of donations on sales performance of MOHA Soft Drink Company?
4. Up to what extent the environmental responsibility associated sales performance of MOHA
Soft Drink Company

1.4 Research objectives

1.4.1 General objectives
The main objective of the study was to examine the Effect of CSR on sales performance of
MOHA Soft Drink Industry, Hawassa city.

1.4.2 Specific objectives

1. To investigate the effect of customer oriented responsibilities on sales performance.
2. To examine the effect of environmental responsibility associated on sales performance.
3. To examine the effect of community oriented responsibility on sales performance.
4. To evaluate the impact of donation on sales performance.

1.5. Research Hypotheses

H1: There is a positive significant relationship between environment oriented responsibilities
and sales performance.
H2: There is a positive significant relationship between Customer oriented responsibilities
and
sales performance.
H3: There is a positive significant relationship between community oriented responsibilities
and
sales performance.
H4: There is a positive significant relationship between donation and sales performance.

1.6. Significance of the study

Companies around the world are becoming very much conscious of their role in the society
beyond their expanding their market and generate incremental pattern. Thinking strategically
and giving more emphasis for long term interest rather than shorter one has become a
commanding issue to this end rolling out CSR initiative has become key success factor and
sustainable competitive advantage. This paper will be contribute bit in elaborating how the
sales performance are affected or supported by implementation of CSR initiatives
The other most important significance come through contributing a relatively under studied
subject especially in the developing nation context. Although extensive research has been

6
conducted on CSR in the developing countries much less is known about CSR in the
developing countries. This is an attempt to contribute taking this ground in to consideration

1.7. Scope of the study

The study will be conduct on assessing /investigating the impact of CSR practice on sales
performance on MOHA soft drink company as merlinsimon and Goes(2013) defend scope of
A study as “ what is domain of the study and what is not “this study exclude assessing CS
Practice effect on other companies their marketing performance
The study also only considered the effect of CSR practice on sales performance of MOHA
Soft Drink Company while there are numerous factors variables which can influence sales
performance. In addition participating in CSR activities can have other effect other than sales
performance. Accordingly the scope of the study will be confirmed to CSR practice and sales
performance only. The study gain delimited to studding the practice of CSR its effect on
MOHA using quaternaries collected from employees of the company leaving other
stakeholders unaddressed as data source. Methodologically the scope of the research
approach among the other approach

1.8. Organization of the paper

The study is organized in five chapters. Chapter one of this study contain introduction
statement of problem, objectives, significance, and scope of the study. The second chapter is
review of related literature which covers literature relevant to the study. in this chapter the
conceptual framework of this study is also included. Chapter three focus on research design
and methodology of the study. Chapter four finding of the study, the last chapter presents
summary of the findings, conclusion and recommendations

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 CHAPTER TWO
2. RELATED REVIEW LITRATURE
The exponential expenditure to enhance the social responsibility of the corporation in the last
decade suggests mangers find an economic befit from CSR programs especially considering
the financial objectives of the corporation is to maximize shareholders wealth however
empirical studies od CSRand sales performance started over three decades ago and the result
of these study have be enmixed. As stated by many writers contributed for this field of study,
there are a lot and at the same time variety of definitions that have been given for the term
“corporate social responsibility”, but hardly possible to come up with definitions that have
enjoyed general agreement. A lot of reasons have been forwarded for the luck of definitions
that enjoyed universal consensus. for instance (Nasrullah and Rahim, 2014) forwarded the
interchangeable and overlapping character that CSR shares with other terminologies such as
‘corporate citizenship’, ‘the ethical corporation’, ‘corporate governance’, ‘corporate
sustainability’, ‘social responsible investment’, and ‘corporate accountability’But, at the same
time most of the definitions are not far off from each other in terms of convoying what CRS
mean. These definitions treated CSR from various angles and perspectives. According to
(Nasrullah and Rahim, 2014) CSR is a sequence of three approaches, each having a different
perspective in terms of definition and boundary of responsibility. They are the shareholder
approach, the stakeholder approach, and the societal approach. The shareholder approach is
regarded as the classical view on CSR and for many reasons Milton Friedman is considered
the major proponent of this view. Accordingly, Friedman defines CSR as a means of
increasing or maximizing the profits of the company where the shareholders are the focal
points. According to Friedman, social responsibility activities are not the main concern for
companies. The second approach, a stakeholder approach was propounded first by Freeman
in 1984. According to Freeman, the business organizations are not only responsible and
accountable to their shareholders, but also take into consideration the legitimate interests of
the stakeholders that can affect or is affected by the operational activities, as well as the
achievement of organizational objectives. The societal approach is a broader view of the
stakeholder approach and suggests that companies as an integral part of society should
undertake responsibilities to the society as a whole. They should constructively serve the
needs of the society to the satisfaction of public consent.
Another very important development in providing definition and meaning for CSR is the
development of typology for which Carroll is mentioned. Carroll distinguished four different
nature of responsibility: economic, legal, ethic and philanthropic. CSR involves

8
environmental friendliness, community support, the sale of local products and fair treatment
of employees (Tilakasiri K., etal. ,2011) and (Majumdar, etal. , 2008 ).A lot of definitions
have been developed by taking these typologies as common ground. Davis and Frederick
Cited in (Tilakasiri K., etal. 2011) defined CSR as an organization’s obligation to engage in
activities that protect and contribute to the welfare of society, including general communities,
customers, shareholders, the environment, and employees. In this same passage, The World
Business Council for Sustainable Development (WBCSD) defined CSR as “the continuing
commitment by business to behave ethically and contribute to economic development while
improving the quality of life of the workforce and their families as well as of the local
community and society at large”.
Later attempts to define CSR even make the demand tighter on businesses. Michael Porter
defined CSR by forwarding what is expected from companies. Accordingly, he defined CSR
as the activities companies should accomplish to provide goods and services and reach new
customers in ways that address the world’s major challenges including poverty, climate
change, resource depletion, globalization, and demographic shifts. Similarly Niall Fitzgerald,
former CEO & Chairman, Unilever said the following “Social responsibility is the
responsibility of an organization for the impacts of its decisions and activities on society and
the environment through transparent and ethical behavior that is consistent with sustainable
development and the welfare of society; takes into account the expectations of stakeholders;
is in compliance with applicable law and consistent with international norms of behavior; and
is integrated throughout the organisation.” (Hohnen, 2007). Almost all the definitions given
for CSR do not defy the profit motives of businesses. Moreover, the definitions make clear
that CSR practices of businesses should be conducted on a voluntary basis. However, more
definitions equate the CSR tasks as important as their products and services provided by a
company. Just to strength these claim, the following two extracts have been selected. By
quoting The Commission of the European Communities (Tilakasiri K., etal. 2011) defines
CSR as a concept whereby companies integrate social and environmental concerns in their
business operations and in their interactions With their stakeholders on a voluntary basis.
Moreover, (Davis & Frederick, 1984) stated that CSR is an organization’s obligation to
engage in activities that protect and contribute to the welfare of society, including general
communities, customers, shareholders, the environment, and employees.
From the above discussion it is possible to see for some extent that Corporate Social
Responsibility (CSR) do not have precise definition. But all definitions to some extent
communicate the notion that businesses have a great deal to contribute for the sustainable
development of the society. Most importantly, it is repeatedly stated that business have to

9
take into account the five dimensions of CSR, namely the economic, social, environmental,
stakeholder and voluntariness as well as the impact their operations will have on the society.
In this instance the definition by The Centre for Business and Government of the Kennedy
School of Government at Harvard: “Corporate social responsibility encompasses not only
what companies do with their profits, but also how they make them. It goes beyond
philanthropy and compliance and addresses how companies manage their economic, social,
and environmental impacts, as well as their relationships in all key spheres of influence: the
workplace, the marketplace, the supply chain, the community, and the public policy realm.”
(Zhang, 2008) is among a lot of definitions that strongly supports this claim.
Theories and Models

2.1. The Evolution of the Theory of CSR

The concept, Corporate Social Responsibility is a relatively recent phenomena which gets its
roots in the 1950’s labor movements in the US and latter in Europe. Since then various
theories and models developed on CSR.Before it enjoys a worldwide acceptance, the theory
of CSR evolved through various stages of development starting from the 1950’s. According
to (Paul Lee, 2008) and many other scholars in the field, four historic stages in the
development of CSR theories are particularly mentioned: Social Responsibilities of
Businessmen (the 1950s and 1960s), Enlightened Self-Interest (The 1970s), Corporate Social
Performance Model (The 1980s) and Strategic Management (The 1990s).
Social Responsibilities of Businessmen: The 1950s and 1960s: As quoted by Paul Lee,
(Bowen, 1953) contributed a great deal in terms of discussing the developments in this first
stage. According to his argument, institutional changes in the first half of the twentieth
century forced, persuaded and made it easier and favorable for corporate managers to be
concerned about their social responsibilities. Bowne further elaborates that during the late
1950s and 1960s, numerous legislations were enacted to regulate conducts of businesses and
to protect employees and consumers. Moreover, an increasing number of consumer protests
led to the creation of the consumer rights movement that directly challenged corporate power.
Enlightened Self-Interest: The 1970s: According to the review of related literature,
breakthrough in conceptual development did not come until 1970. Researches that mark this
particular era in the development of CSR theories and practices, mainly conceptualizes CSR
as supporting the corporation’s long-term interest by strengthening the environment which
corporations belong to. Accordingly, (Paul lee, 2008) says by quoting Davis, 1973 that a
firm has an obligation to evaluate in its decision making process the effects of its decision on

10
the external social system in a manner that will accomplish social benefits along with the
traditional economic gains which the firm seeks.
According to Paul Lee, most studies that were published in the 1970s focus on the content
and the implementation process of CSR that does not conflict with corporations’ fundamental
interest.
Corporate Social Performance Model: The 1980s: For this model, the contribution of
(Carroll, 1979) is particularly mentioned. His model which is known as three-dimensional
conceptual model of corporate social performance (CSP) immediately gained acceptance and
was further developed by others. The main thrust in Carroll’s three-dimensional model is the
combination of three dimensions in CSP, which are CSR, social issues and corporate social
responsiveness under one rubric.
As discussed by Paul Lee, the most important contribution of the model is that the three-
dimensional model does not treat the economic and social goals of corporations as
incompatible trade-offs. Rather, both corporate objectives are integrated into the framework
of total social Responsibility of business which includeseconomic, legal, ethical and
discretionary categories. According to his argument, the shortcoming of the CSP model was
that it lacked one critical aspect needed for implementation: the capacity to measure and
empirically test the model (Wood and Jones 1995).
Strategic Management: The 1990s: In particular, the question of why some companies
persistently perform better than others has produced a vast amount of research on strategic
management. One strain of strategic management research, stakeholder analysis, is found to
be applicable to CSR. The most important benefit from this stage of development is that, the
stakeholder model solved the problem of measurement and testing by more narrowly
identifying the actors and defining their positions and function in relation to one another.

2.1.1 Theories
The role of Participating in CRS as an important and crucial requirement for the success of an
organization is a concept that has got a wider acceptance. Many firms has taken CSR
practices as critical success factor and enlisted it as a major duty of organizations. The
development of CSR theories truly exhibited how CSR has become important from time to
time. Four theories of CSR: Instrumental Theory, Political Theory, Integrative Theory and
Ethical Theory (Garriga&Mele´, 2004) are the theories that got wider consideration and they
are applied by the organizations to develop image of a socially oriented firm. The theories are
presented below as discussed by Garriga&Mele´, 2004:
Instrumental theory

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In this theory the CSR are considered as means of attaining economic objectives of wealth
maximization. Consequently, maximization of shareholders value, strategies for attaining
competitive advantage and marketing related to cause are the three approaches encouraged by
this theory in order to fulfill the firm’s wealth creation ends. Among the proponents of this
view, Friedman is constantly mentioned here. He strongly supports the idea that ‘‘the only
one responsibility of business towards society is the maximization of profits to the
shareholders within the legal framework and the ethical custom of the country’’ (Friedman,
1970). Scholars in this category don’t rule out the importance of adequate level of
investment in social activity. Though profit is the major concern, stakeholders concern for the
social good has to be Considered. Many scholars agree on the issue and one among them
(McWilliams and Siegel, 2001) agrees that an adequate level of investment in philanthropy
and social activities is also acceptable for the sake of profits.
Political theory:
This represents a group of CSR theories and approaches that focus on interactions and
connections between business and society and on the power and position of business and its
inherent responsibility. This theory recognizes the powerful status firms have in the society
and corporations have to use this power in the political field. According to (Nelgade, 2010),
this theory has three main approaches that are corporate constitutionalism, integrative social
contract and corporate citizenship, which are directed to different tools. Corporate
constitutionalism argues that all the social responsibilities and authorities are the result of
social power, which is occupied by the corporations. Second approach states that social
contract is a bond between the firm and society. This contract is based on the duties
organizations have for the society for which it also attains a lot in terms of profitability and
reputation. Corporate citizenship approach argues that corporations are similar to citizens
who have some responsibilities for the society into which they reside. (Garriga&Mele´, 2004)
consider Corporate Constitutionalism and Corporate Citizenship as the two major theories
among the various approaches identified.
Integrative theory:
This group of theories looks at how business integrates social demands, arguing that business
depends on society for its existence, continuity and growth (Garriga&Mele´, 2004).
Accordingly, the theory states that the main aim of organizations should be focused on the
satisfaction of requirements of society. This theory further elaborates that firms should focus
on the detection and scanning of, and response to, the social demands that achieve social
legitimacy, greater social acceptance and prestige.

12
Integrative theory has chiefly four approaches: management issue, public responsibility,
stakeholder management and corporate social performance, which are aimed to fulfill the
social demands. First approach is related to the response of organizations to the political and
social issues. By responding to the issues encountered by political and social environment, an
organization can perform its public responsibility effectively. Second approach states the use
of Public policies andlegal rules to locate the society. Third approach is related to the
stakeholder management that is aimed to balance the identified interests of all key members
of the stakeholder group. Corporate social performance on the other hand states that
corporations should identify some process and social legitimacy to respond to the social
issues and needs.
Ethical theory:
They are based on principles that express the right thing to do or the necessity to achieve a
good society. Ethical theory of CSR states that corporations should focus over the right paths
to create a good society. It also has four approaches that are stakeholder normative theory,
universal rights, sustainable development and common good.The first approach, normative
stakeholder theory, considers duties toward all stakeholders of the firm - suppliers,
customers, employees, stockholders, and the local community. The second approach,
universal rights, states that company should consider universal rights, based on human rights,
labor rights, and respect for the environment. The third one refers to sustainable development.
This theory aimed at achieving human development, while taking into account both present
and future generations. To evaluate its own sustainability, the business should adopt a "triple
bottom line", which would include not only economic, but also social and environmental
aspects of performance. The last one, the common good approach, maintains that a business
must contribute to the common good, because it is part of the society. A corporation has
many means to achieve this: by creating wealth and providing goods and services efficiently
and fairly, while at the same time respecting the dignity and the inalienable and fundamental
rights of the individual. It may also contribute to social well-being and a harmonious way of
living together in just, peaceful and friendly conditions, now and in the future.
According to these theories and models of CSR, organizations should invest their resources
for ensuring the standards set by CSR. Framework provided by CSR theories and model is in
favor of constructing a better world by showing proper response to the stakeholders needs
(Fang, Huang and Huang, 2010).

13
2.1.2. Importance of CSR Practices
Although increasing number of scholars supports the notion that businesses have to consider
CSR as an important part of their activity, there are certain scholars that argue against. As
stated in the previous section, Scholars like Friedman assert that a business’s primary
responsibility is to make profit, and the only interests that matter when making managerial
decisions are those of the shareholders. Proponents of this notion usually argue that ethical
and discretionary considerations are irrelevant, and decisions that include these factors may
harm a firm’s financial performance. For them Corporate Social Responsibility is a practice
that harms a firm’s financial performance. Those in favor of CSR practices in businesses
have a fundamentally opposing view and argue that social issues can be just as important as
market factors in determining long- run success, and thus deserve the same attention (Lin,
Yang &Liou, 2008).
It seems therefore that there is almost a general consensus concerning the notion that
businesses should contribute their share in solving social problems of the society in which
they are operating. Their contribution has to be more of voluntary, not every time consider
their economic interest but rather more concerned with moral responsibility. But this
contribution by any means compromise their profit making and other business objectives.
Based on this notion, people forward view concerning the importance of engaging in CSR
activities.
(Lin, Yang &Liou, 2008) argue that CSR plays a role in consumer behavior and has a spill
over or ‘‘halo effect’’ on consumer judgments, such as the evaluation of new products. They
explain that there are clear, concrete, market-driven benefits and competitive advantages for
companies that integrate their business policies with CSR. As an example they forward that,
strong local communities with quality housing, schools, and shopping attract and retain
competent workers. A company’s efforts in these areas may pay off in recruiting and
retaining skilled personnel. Similarly, workers tend to want to work for a ‘‘good company.’’
Bearing in mind such benefits, corporations around the world seem to understand the
importance of participating in CSR activities and start taking part in the actual CSR practices.
In the 2011 report, the Global Fortune Top 250 companies were reviewed. The report found
that 95 percent of global companies issue annual CSR reports that summarize their CSR
initiatives. In comparison, the 2002 report disclosed that only 45 percent published a separate
corporate report on their performance. In sum, the last decade has realized a 111 percent
increase in CSR reporting to stakeholders (Palmer, 2012). Palmer further confirms the
findings of other scholars concerning the relation between increased involvement in CSR
practices and the expanding customer base. CSR initiatives lead to an increase in customer

14
base because customers are willing to switch brands for a company that supports a cause,
which translates into increases in revenue. In addition, customers build self-identity through
consumption choices, and will switch to brands with effective CSR initiatives to enhance
their self-identities. (Ibid)s
Banks play a crucial role in a nation’s economic development through their function as
financial intermediary. Due to the nature of their service, as depositors and borrowers, their
CSR demand an exceptional devotion. Prior to anything else, The impact of the banking
sector on the stability of the economy requires a sector managed with integrity and due
diligence that: handles the risks inherent to its activity in a realistic and responsible manner;
is transparent to customers and stakeholders about its operational management and the
products offered; and pays attention to its basic function as engine of the economy, by e.g.
lending to private persons and companies (https://www.febelfin.be/en). Besides, banks are
expected to watch environmental and societal harms that might be inflicted through credits
they provide for various projects. In this instance, although banks have smaller direct impact
on the environment, their indirect environmental and social responsibility may increase if
they grant credit to companies which pollute the environment, produce unsafe products or
violate human rights. (Lentner, Szegedi and Tatay, 2015)
The nature of competition in the banking industry is another compelling factor that makes
banks consider CSR as their main line of duty. Winning customers and sustaining long term
profitability have become a great challenge in the industry through the conventional business
development and promotion activities alone. They are not helping in a required manner in
expanding customer base and boosting sales volume. The following extract might clearly
show why banks should have adequate CSR policy and make it part of their core activity.
Many theoretical and quantitative studies have been conducted to identify relation, if there is
any between corporate social performance (CSP) and corporate financial performance (CFP).
Four or three hypotheses regarding possible relationships linking CSP and CFP have been
proposed: For example, (Soana, 2009) compiled four: negative relationship, positive
relationship, mixed relationship and no relationship. (J. Palmer, 2012) on the other hand
dwells on the three of them: Negative association, null association and positive association.
As discussed in the previous sections, the majority of recent empirical and theoretical studies
on CSP and CFP indicate they are positively associated. Among the major factors
contributing for positive relationship are: Enhanced organizational reputation, Increased
sales, Increased ability to attract better employees, Decreased operation costs, and reduced
business risk are uniformly mentioned in the studies. The relationships developed by J.
Palmer are selected for discussion:-s

15
Enhanced Organization Reputation: Here the theories and quantitative findings assert that
Stakeholders are more likely to engage in transactions with companies that have a CSR
record of showing a commitment to the community and environment. The benefits of
enhanced reputation include less scrutiny from society, an increase in customer and investor
loyalty, and an increase in intangible assets—all of which lead to stronger financial
performance in the long run. CSR programs also improve the esteem of customers because
they enable customers to feel more valued by society since they are helping improve the
community with their consumer decisions.
Increased Sales: Another potential explanation for a positive associate between CSP and CFP
is that CSR programs are revenue generators especially in the long run either through an
increased customer base or an ability to increase prices. According to a study by a brand
consulting U.S firm, Burson-Marsteller, American consumers are willing to pay a premium
for goods from socially responsible companies, with 70 percent saying they would pay more
for a $100 product from a company they regard as responsible. In another study that same
year in the U.S, 80 Percent of customers are likely to switch brands, similar in price and
quality, to one that supports a cause.
Increased Ability to Attract Better Employees: Corporations with CSR programs have a
competitive advantage because they attract better employees. Results indicated that that “job
seekers consider CSR records important at all stages of the job search, but most important
when determining whether to take a job offer.” Thus, companies with CSR programs attain
competitive advantage by receiving the benefit of attracting a larger pool of employees to
select from.
Decreased Operating Costs: One argument against CSR programs is it is an increase in cost
and thus clashes with the objective of a business. However, this is a short-term focus, and
when implemented correctly, CSR programs can actually decrease operating costs in the long
run.
Reduced Business Risk: Corporate culture culminates from the actions of top executives, and
reputation is developed through the values of trust, credibility, reliability, quality, and
consistency. Companies that do not link a comprehensive CSR program with risk
management “can leave a company vulnerable, with no appropriate controls or
countermeasures.
To reap these benefits from carrying out their CSR duties, companies including banks have to
accomplish a variety of CSR tasks. Dr. Achie B. Caroll identifies these four categories the
most important: Economic responsibility, Legal responsibility, Ethical responsibility and
Discretionary (philanthropic) responsibility.

16
Economic responsibility is the traditional reason for having banks, in other words to increase
the owners’ welfare, ensure profitability and growth. Since individual and corporate financial
interests are constantly changing, banks create new opportunities for risk management and
the effective mediation of resources. This involves developing new products, redefining the
existing ones and creating new channels. Legal responsibility is largely concerned with
regulations put in place to minimize risk and ensure safety and confidence in the financial
system. Banks are expected to comply with such legal provisions. The basicethical principles
of honesty and sincerity, which together with trust, are traditionally linked to the financial
sector. The codes of ethics that embody voluntary constraints also include the basic principles
of integrity, fair Conduct, respect and transparency in the financial sector. Discretionary
(philanthropic) responsibility is a voluntary activity; however, it has become common
practice among banks, contributing to the better reputation of the financial sector.

2.2. Empirical Review

There are authors that took the emergence of Corporate Social Responsibility to the early
twentieth century. The roots of CSR certainly extend before World War II (Carroll and
Shabana, 2010). But a lot of empirical literature agrees on the late twentieth century as the
time for development of CSR in its strictest sense. For example, one of the distinguished
contributors in the subject Carroll and other agree that the concern of businesses on the
welfare of their employees and the society in general is responsible for the emergence. With
the emergence of the labor movement and spreading of slums triggered by the industrial
revolution, businesses started to provide social welfare on a limited scale, including the
construction of hospitals and bath houses and provision of food coupons (Carroll, 2008). The
idea of corporate social responsibility (CSR) that is, businesses bearing a responsibility to
society and a broader set of stakeholders beyond its shareholders gained currency in the
1960s. Since then, attention on CSR has been growing in both academic and practitioner
communities around the world (Wang et al., 2016). As (Lee and Carroll, 2011) witnesses by
quoting (Clark, 2000), In the 1970s, the idea of the firm as a social actor began to be
accepted, and thus expectations for corporations to respond to social issues and demands for
ethical behavior emerged. However, survey respondents at the time did not believe businesses
should be involved in social problems such as education, support of charities, or the decay of
cities unless they were directly related to business matters.
There is no consensus concerning the contribution of businesses for the societal cause
through CSR practices. While certain group of scholars held the view that the major concern

17
of businesses is generating shareholder profit, other argue against it and label businesses as
the right entities to engage in CSR practices.
Arguments in favor of CSR comprise many scholars in the field. According to this view,
businesses have to participate in CSR primarily to maintain a business’s long-term existence.
According to this view, for businesses to have a healthy climate in which they function in the
future, it must take actions now that will ensure its long-term viability. The second argument
for this group of scholars is involves going in harmony with government regulation (Carroll
and Shabana, 2010). Still another argument forwarded by this group in favor of CSR
concerned with the better position businesses have in terms of recourses at their disposal
ready for expenditure for social causes, management talent they possess and mix of expertise
under their possession.
Contributors in the field have identified areas where CSR of companies should considerer. As
pointed out by Carroll, economic, social, and environmental issues and areas are popularly
recognized and distinguished as fundamental to the CSR agenda. It is because the activities
and the operations of corporations mainly impact the economic and social life of the people
in and outside as well as the natural and human environment (Nasrullah and Rahim, 2014).
This responsibility, according to the authors involves two dimensions, internal and external.
The internal dimension includes human resource management, health and safety at work,
management of environmental impacts, and natural resources. The external dimensions
involve local communities, business partners, suppliers, consumers, human rights and global
environment.
The development of research and empirical literature has not been evenly distributed across
the globe. By Quoting Quazi, Rahman and Keating, (Belal, 2000) viewed CSR practices and
research as “CSR has been historically viewed as a developed-country phenomenon. As such,
a large body of literature on social performance of firms has emerged in the context of
developed countries. Literature on the theory and practice on CSR in the developing countries
therefore remains scant.” As visser puts it statistically, researches show that between 1995
and 2005 only 12 of Africa’s 53 countries have had researches published in core CSR
journals, with 57% of all articles focused on South Africa and 16% on Nigeria (visser, 2008).
Beside the lack of adequate amount of research and literature in the developing nations’
context, how the CSR practices are organized and their area of concern varies from that of the
developed part of the world. Divergence on policies and practices of CSR between developed
and developing countries are evident in the literature. Developed countries, such as the US,
Australia, and regions such as the OECD and the EU, have incorporated CSR into their

18
business lexicon. But in developing countries it is hard to find CSR practices used in a logical
way (Majumdaret

al.,2008). Moreover out of the four dimensions of CSR (economic, legal, philanthropic and
ethical responsibilities) identified by Carroll, the prioritization of these different
responsibilities is different in developing and developed countries (CESD, 2013).
Accordingly, economic responsibilities are the top priority both in developed and in
developing countries, but particularly in developing countries, which suffer from wide
unemployment and inadequacy of direct foreign investment, the economic contribution of
companies has special significance, and they are highly praised by government and
community.
This trend has to be changed as there are a lot of economic, legal, philanthropic and ethical
issues that need the intervention of business organizations through their CSR programs. As
Aasad, 2010, Pokorny, 1995 and others pointed out, in this decade, the perception about CSR
has to change significantly. The success of a company should be also measured by its
contribution to society. The same can be said about the development of research and
literature in the area of CSR. A lot of researches, theories and views about CSR in the
developing part of the world have to be produced. As (visser, 2008) critically puts it, CSR in
developing countries is a rich and fascinating area of enquiry, which is becoming ever more
important in CSR theory and practice. And he continues, since it is profoundly under-
researched, it also represents a tremendous opportunity for improving our knowledge and
understanding about CSR.
Moreover, in the present world, the contribution of CSR for sustainable development has
attracted increasingly important attention. In this sense, sustainable development is
inextricably linked to environmental issues in addition to social and economic issues (Sachs,
2012). For instance, the environmental damage caused by business (e.g. water pollution and
deforestation) has an impact on local communities which, in turn, becomes a barrier to their
long-term socio- economic development. As such, CSR activities in the context of sustainable
development could reverse or mitigate the adverse impacts of business (Carroll, 2006).
One or the combination of the following: moral obligation, sustainability, license to operate
and reputation will always be there to check companies to take their CSR programs very
seriously (Masato Abe, 2007). The Banking sector will not be different but rather have a
multiple role to play. In one way it is expected to engage in a CSR activities of its own and as
an industry engaged in availing credit to companies and investors, has to make sure that its
credit goes to

19
Socially responsible projects This is mainly due to the number of people affected by the
activities of financial organizations tends to be very large, since not only owners and
employees, but also those using their services are linked to a given institution for years or
decades (Lentner, Szegedi and Tatay, 2015).
Ethiopia as one member of the developing part of the world is also suffering from this
limitation. Therefore, the intention of this research work entitle “Effect of Corporate Social
Responsibility on Market Performance: the Case of MOHA soft drink company” is just to
contribute a bit in the area.
Sales and sales performance
According to Gillian and Granthern (1976), Sales are a result of marketing communication in
consultation with other variables. It is the performance of completing the commercial
activity. As stated by Rubalskas (2006), sales volume as the quantity an organization is able
to exchange for money. A sale is accomplished by the seller who is the owner of the goods. It
starts with the agreement to an acquisition followed by the passing of title to the buyer.
Performance of sale given product refers to the volume or the level of product sales in a given
period of time. It is commonly measured by key performance indicators; such as, the number
of promotional relations and sales of a given product (Balunywa 1998).For any company,
sales refers to the total amount of money received by the company for goods sold or services
provided during a certain time or period. The basic principle is that a sale can only be
accepted when the transaction is already recognized or can easily be realized. which means
the company should have received payment or the chances of receiving payment are high
(Kakuru, 2000). Sales can be gross or net. Gross sales are the total invoice value of sales,
before deductions for customer discounts, allowances or returns. Whereas Net sales refer to
the gross sales revenue after deducting returns, allowances, discounts and all other selling
expenses.
Sales performance indicators
As literature indicates there are several perspectives on evaluating sales performance but the
performance measures taken at different times are not highly related and the relationships
between different performance measures are not strong (Roberts, P.W., & Dowling, 2002).
As mentioned by (Campbell, 1990) there are 10 performance indicators which are sales
volume and ability to reach quotas, customer relations and management of expense accounts,
customer knowledge and company knowledge, competitor knowledge and product
knowledge and time management and planning that are significant for sales performance.
From a different angle, Campbell‟s checklist can be effectively reduced to four main

20
objective performance criteria such as annual sales volume, gross profit per sale, annual sales
volume and profit growth customer relations.According to Reilly (1997), Sales performance
is usually measured by key sales performance indicators such as revenue, sales turnover and
the level of replenished stock, brand popularity as well as a continuous productive
system.Kolter (2003) defined a number of key performance indicators. According to him key
sales performance indicators of a product is produce fast moving consumer products is high
sales revenue. Sales revenue refers to the total amount of money that has been realized after
delivery of gods or services. Sales revenue can only be realized after stock is out of stores.In
some companies, continued production of goods is an indicator of good sales whereas a
reduction in production indicates declining sales. Additionally the popularity of the product
or brand shows high sales of the product. In general, consumers prefer to use those brands
which are familiar to them.
Sales performance management
Organizations face many obstacles to success in maximizing sales effectiveness and overall
revenue performance, to overcome the obstacle organization need to have Sales performance
Management.
Sales performance Management is an integrated frame work that enables organizations to
plan and model sales strategies and ensure timely accomplishment of sales initiatives (Dunne,
2005).sales performance management helps organization by better targeting through a better
understanding of market trends and better targeting of sales across territories; increased sales
turnover and improved productivity by allocating sales opportunities more fairly; more timely
and realistic, quota selling with reduced risk attainment shortfalls or un-forecasted sales
incentive exposure; timely and measureable sales incentive plans that successfully influence
behavior; better management of sales resources, to ensure higher revenue generating
activities cost effectively; more sales satisfaction through confidence in their pay for
performance; and improved agility in understanding market drivers and the ability to make
course connections.
Conceptual frame work

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2.3 Conceptual Framework

Environment
Oriented
Responsibility

Community
Oriented Sales
Responsibility Performance

Donation

Customer Oriented
Responsibility

Source: Own Design @ 2023

22
 CHAPTER THREE
3. RESARCH METHODOLOGY

3.1 Description of the study area

Ethiopia is located between 3 ‫ ׳‬and 15‫ ״‬latitude north and 33‫ ׳‬and 48‫ ״‬longitude east. This
research is conducted in SNNPRS, Hawassa city. The southern nation’s nationalities and
peoples regional state (SNNPRS) is located in the southern part of the country bordering with
Kenya in south, the south Sudan republic in the south west, Gambela region in the north-west
and Oromiya region in the north and east (regional statistics bureau data, 2010).
Geographically, the region lies between 4‫׳‬and 8‫ ״‬latitude north and 34‫׳‬and39‫ ״‬longitude east.
The region has an area of about110931.9 sq.km. Which ranks 4th in size and accounts for
about 10 percent of the total area of the country. For administrative facilities, this vast region
is divided into 14 zones, 4 special woredas, and 126 small administrative units’ called
woredas (regional statistics bureau data, 2010).
Hawassa city, the capital of southern nation’s nationalities and peoples` regional state,
located 275km from Addis Ababa capital of Ethiopia. It is surrounded by the lake Hawassa in
the west, HawassaZuriaWoreda in the south and east, MelgaWoreda in the north east and
Oromiya region in the north. It is located at 7 ‫״‬30 ‫ ׳‬latitude north and 37‫״‬30‫ ׳‬east longitude
with an altitude of 168m above sea level. Based on the 2007 census conducted by the central
statistical agency of Ethiopia, Hawassa has a total population of 258,808 of whom 133,123
are men and were 125,685 women. It covers an area of 50 km2 and its name derived from
Lake Hawassa, which mean wide in Sidama language. It was established by Emperor Haile
Silassie I. Hawasssa is an important industrial, commercial as well as tourist center in the
southern part of the country. The city administration of Hawassa is structured in 8 sub cities
namely:-Tabore, Hayekdar, Menaharia, Misrak, Bahleaderash, Mehalketema, Addis ketema
and Hawela Tula and 32 kebeles (regional statistics bureau data, 2010).
The landform is plain, with reddish volcano soil, which is ideal for construction. Hawassa is
characterized by seasonally variable climate. According to a study carried out by 1979 E.C.
The mean annual temperature is 20ºc, maximum temperature 33.8ºc and minimum
temperature 7.5 ºc. According to the study paper of Hawassa agricultural institute in the year
between 1972-1985E.C the town`s mean annual temperature was 18.34ºc, it`s maximum
temperature was registered in March and November respectively. According to the data from

23
national metrological agency of Hawassa branch in the year between 2003-2005E.C the
annual mean temperature was 20ºc, the maximum was 33.8ºc and minimum was 10.7ºc
(regional statistics bureau data, 2010).
Based on the 1979E.C socio-economic profile, the average annual rainfall of the same year
in Hawassa was 993mm. According to the national metrological agency of Hawassa branch
the average annual rain fall of 1995, 1996, 1997E.C were 788mm, 879.8mm and 997.6mm
respectively (regional statistics bureau data, 2010).
As reported by Hawassa agricultural research center 1961-1977E.C the relative humidity of
the town was 63 percent. The highest amount of water in the air had been between May and
September. It was very low in the months of December, January, February and March
(regional statistics bureau data, 2010).
According to study paper of SNNP Regional State water resource development bureau the
relative humidity of the Hawassa area is maximum during the wet seasons and significantly
decreases during the dry season the main monthly value of relative humidity in the area
varies from 70 percent to 80 percent during the seasons May to October. The mean monthly
relative humidity during the dry season November to February varies between 40 percent and
60 percent (regional statistics bureau data, 2010).

3.2. Research Design

The research design is the conceptual structure within which research is conducted; it
constitutes the blueprint for the collection, measurement and analysis of the variables
specified in the research problem (Kothari, 2004). This study aimed at understanding the
relationship between the dependent and independent variables, which are sales performance
and corporate social responsibility respectively.
In this study the researcher will be use both descriptive and explanatory research design. The
researcher was used explanatory research design because it enables to critically examine the
relationship between independent variables that are CSR activity; environment oriented
activity, customer oriented activity, community oriented activity and donation and dependent
variable that are sales `performance. The researcher also will be use descriptive research
design to explain and describe systematically a situation, a problem, phenomenon, or
attitudes towards an issue.
The research design for this study will be use the Cross-sectional field survey method. In
cross-sectional field surveys, independent and dependent variables are measured at the same
point in time using a single questionnaire (Anol, 2012)

24
This study will be focus on the various CSR activities accomplished by MOHA soft drink
Company, Hawasa plant and their effects on sales Performance. To this end a methodology is
primarily relays on data collected through questionnaires.

3.3 Types and source of data

A blend of primary data and secondary data will be use in conducting the study. Primary data
will be collect through interview and questioner afresh and for the first time, and thus happen
to be original in character/including interview & observation/. Secondary data was secured
from relevant literatures and some official data (Kothari, 2004) .There is two types of data
sources, which can be considered for research purpose. These data sources included the
following:
Primary Data: -Primary data can be referred to as first hand data because it is collected
mainly for the set research purpose. This type of data often helps to give appropriate answers
to the research questions (Kothari,2004). Primary data will be collected about marketing mix
element (product, price, place and promotion) through interview and questioner and thus
happen to be original in character/including interview & observation.
Secondary Data: - According to Kothari (2004), this can be referred to as information
collected by others for certain purposes that can be different from a researcher who intends to
use the same information. These types of data can also be called second hand data because
they were not collected for a particular purpose but can be of important to several researchers
at different time.Schedule with close-ended questions and semi structured personal interview
will be used to collect primary data from employees of the MOHA soft drink company and
some selected management members and non-management members of the company.
Secondary data was obtained from journals, company annual report, articles, different books,
internet and documents.

3.4 Population of the Study

The target populations include 536 employees. The target populations are found in MOHA
Soft Drink industry, Pepsi cola plant, Hawassa City . These employees include all
departements in the organization etc. (MOHA Handbook, 2015).
3.5 Sample Size
The sample size for the study calculated according to the formula recommended by
Yamane‘s (1967) with 95% confidence and 5% acceptable sampling error. The formula is
presented below:
n= _ N____

25
1+ N (e) 2

Where,
n= is number of sample size
N = total number of study population
e = standard error = 5% at 95% confidence level
n = 536
1+536(0.05)2
n= 536
2.34
n = 229.05 (Approximately 229 individuals)

3.5 Tools and Methods of Data Collection

Two data collection instruments will be use to gather relevant information for this study. The
researcher used questionnaires and personal interview.
3.6.1Collection of Data through Schedules
This method of data collection is very much like the collection of data through questionnaire.
The study used schedules to collect data from respondents. To this effect, training will be
given to enumerators in order to collect the required data. Schedules will be design using five
point likert scales. Each question of the questionnaire is assigned a number indicating
Strongly Disagree measured as 1, Disagree measured 2,Neutral measured as 3,Agree
measured as 4, and Strongly agree measured as 5. Four enumerators are selected and trained
to handle the case properly. These enumerators along with schedules went to the selected
respondents, put to them the questions from the schedule in the order the questions will be
listed and recorded all the responses in the space meant for the same. In certain situations,
schedules might be handed over to respondents when they found to be literate.
3.6.2. Collection of Data through Interview
The interview method of collecting data involves presentation of oral-verbal stimuli and reply
in terms of oral-verbal responses. This method will be use through personal interviews and, if
possible, through telephone interviews (Kothari, 2004).
Personal interviews: Personal interview method requires a person known as the interviewer
asking questions generally in a face-to-face contact to the other person or persons.In this
research, the enumerators collected data using schedule questionnaire and personal interview
(semi-structured interview). The schedule with close-ended questions will be use to collect
data from employees through five point Likert scales.

26
3.6 Data Processing and Analysis
The data collected from the field were processed. The data will be first check/edit to ensure
completeness, accuracy and uniformity. All instruments will be assign serial numbers to
facilitate identification and data entry into the computer. The data will be code after
checking/editing, and entered into the computer for analysis.
Data analysis section of this study will be base on descriptive and inferential analyses. The
descriptive analysis includes mean, standard deviation, tables, frequency, percentage and the
like. It is preferred because it facilitates the organization of data, early detection of error,
ease of comparison of findings and statistical simplification of data computation.
The inferential analysis of the survey data and variables for the study will be applied in
collaboration with some important tests such as validity and reliability of data. The
correlation and regression analyses between variables will be also included. The reason is that
correlation analysis helps to show association or relationship between variables of the study
while regression analysis is used to measure the effect of independent variables (product,
price, place/distribution and promotion) on the dependent variable (customer satisfaction).
Moreover, the inferential analysis dealt with the results of the linear regression and data
analysis that constituted the main findings of this study.
Respondents were also asked to rate their opinion according to five point Likert rating scale,
with rating five being “Strongly Agree” and one being “Strongly Disagree”. Because, the
Likert scale is a measurement tool commonly used in many studies on cognitive behavior
applied theory of planned behavior (Francis et al., 2004). It is considered symmetric since
there are equal amounts of positive and negative positions (Burns & Burns, 2008).
An inherent assumption with the usage of any Likert scale is that although the scale istruly
ordinal in nature, it is assumed to be on an interval scale with which statistical properties such
as the mean can be justifiably used. It is an assumption made quitefrequently in empirical
studies (Edmindson, 2005).
Recently, an empirical study found that a 5- or 7- point scale may produce slightly
highermean scores relative to the highest possible attainable score, compared to those
produced from a 10-point scale, and this difference was statistically significant (Dawes,
2008).Moreover, Lewis (1993) criticized the use of a seven- point Likert scale for its lack of
verbal labeling for points two to six which may cause respondents to overuse the extreme
ends of the scale. Babakus and Mangold (1992) suggested that five-point Likert would reduce
the “frustration level” of respondents and increase response rate and quality. For these
reasons, in this specific type of survey, a 5 - point Likert scale was chosen by the researcher.

27
The collected data was regressed and analyzed with the help of a tool, which is called
Statistical Package for Social Science (SPSS) version 20; and Ms Excel 2007 for overall
mean computation with regard to customer satisfaction.

3.7 Validity Test

Validity refers to the extent to which a measure adequately represents the underlying
construct that it is supposed to measure (Bhattacherjee, 2012). Content validity was checked
through getting the questionnaire reviewed by experts. Moreover, the researcher conducted
content validity of the questionnaire by selecting 10 customers of the company and made
some wording adjustment mainly under the scale items of price.

3.8 Research Ethics

Some of the expected tenets (principles) of ethical behavior that are widely accepted within
the scientific community are: voluntary participation and harmlessness, anonymity and
confidentiality, disclosure, analysis and reporting (Bhattacherjee, 2012). Therefore, the
researcher of this thesis attempted to consider these issues in respect of each as follows.
Voluntary participation and harmlessness: Subjects in a research project must be aware that
their participation in the study is voluntary, that they have the freedom to withdraw from the
study at any time without any unfavorable consequences, and they are not harmed as a result
of their participation or non-participation in the thesis. To this effect, the researcher gave
freedom to the respondents and they exercised freely on the given questionnaire.
Anonymity and confidentiality: to protect subjects’ interests and future well-being, their
identity must be protected in a scientific study. This is done using the dual principlesof
anonymity and confidentiality. Anonymity implies that the researcher or reader of thefinal
research report or paper cannot identify a given response with a specific respondent.
Confidentiality means the researcher can identify a person’s responses, but promises notto
divulge (reveal) that person’s identify in any report, paper, or public forum.

In both cases, this has been confirmed by the researcher in such a way that there was no need
to fill their name on the questionnaire. Even if there were face-to-face interview questions,
they were assured that their identity would not be disclosed. Hence, much trust was
developed between the researcher and sample respondents.
Disclosure: usually, the researcher has an obligation to provide some information about
his/her study to potential subjects before data collection to help him/her decide whether or not
they wish to participate in the study. For instance, who is conducting the study, for what

28
purpose, what outcomes are expected, and who will benefit from the results. Guided by this
ethical principle, the researcher has disclosed about the content and purpose of the study.
Moreover, the benefit of the research after finalization has been well-disclosed to the
respondents.
Analysis and reporting: it has been evident that the researcher also has ethical obligations to
the scientific community on how data is analyzed and reported in the study. Accordingly,
more clear and candid information has been forwarded not to mislead the scientific
community.

3.10 Budget Breakdown/Cost breakdowns

No

September

November

December
October
August
May

Type work July

1 Select Research topic ✓
2 Prepare review literature ✓
3 Develop research proposal ✓
4 Present research proposal ✓
5 Organize data and prepare research ✓
Questionnaire
6 Distribute research questionnaires to ✓
The respondents
7 Collectthe questionnaire from the ✓ ✓
Respondents
8 Analysis and interpretation ✓
9 Research presentation ✓

29
Time and Budget Table

Quantity

Remarks
Unit cost

Total cost
S.No
Items

1 Per Diem for the Research work

6 days 200 1000
a)To distribute questionnaire papers
from Hawassa town
To collect All
b)To distribute questionnaire papers to 6 days 50 300 relevant
Hawassa town Secondary data
C)To collect primary and secondary data 6 days 50 300
also

D)Questionnaire language and 6days 200 1200

F)wording evaluator
Total 8200
2 Secretarial Services
10copies 50
a)Typing Questionnaires Papers
b)Typing and print outs Questioner 400copies 2000
prepare
c) Typing and printing first draft 70 420
Research paper.
d)Editing and correcting first draft 2 800
by of experienced person
e)Printing final Research Report for 70 280
hours and
f)Copies final Research Report 210 840
70x3=210
Total 4390
3 Stationery requirement

a) Rewritable CDs 2 160

b) Flash Disc 1 1600

c) For binding research paper. 2 100

Total 1860
4 Transportation expenses 2000
5 Other expenses 1500
6 Total
7 Grand Total

Table 2

30
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33