Problem Statement:

How “changes in price” and “social welfare activities” by a company affect

consumer buying behavior, satisfaction level and long-term relationships with
their customers?

Objective of Study:
There are various objectives of this study which are

• To contribute to the emerging literature on pricing, social responsibility

and customer relationship defining the key perceived values.
• To explain existing pricing and consumer satisfaction models.
• To identify the relationship of pricing and social welfare on customer
satisfaction.
• To help marketers know that how these factors effect on customer
satisfaction.

Working Procedure:

The report will discuss the impact of prices and social activities on consumer
satisfaction. Specifically as it relates to formulating a marketing strategy
focused on long-term customer relationship management. This research report
discusses the existing consumer knowledge. Dealing with aspects of pricing and
social responsibility as the purpose of this research report is to combine the
concepts of existing research on impacts of pricing and social welfare activities,
which examined entirely different aspects of consumer behavior, and synthesize
valuable new information. By examining the sources of social responsibility and
customer satisfaction in a broad and integrated way, we shall provide a new
perspective that draws from, rather than substitutes for, previous research.

Research Design

Company
“Pakistan Tobacco Company Limited”
Products
Gold Leaf, Capstan, Gold Flake
Population
The population for this research will be males from the vicinity of Rawalpindi &
Islamabad with age of 19 and above.

Sample Size
The sample size for this research is 100. Hence 100 people from the selected
population will be given questionnaires to fill in.

Research Instrument
o For this study, questionnaires will be distributed to respondents of all
occupants.
Data Collection
Designing questionnaire will be followed by data collection; the population
selected will be given questionnaires to fill in.

Data Analysis
Appropriate statistical tool will be used for analytical sorting of data, so that
accurate results can be draw. We use SPSS in our project.

Type of Study
This study can be classified as causal research. Because the purpose of the
research is to find out the impact of pricing and social welfare activities on
consumer satisfaction.

Variables

Independent Variable
o Pricing
o Social Welfare Activities

Dependant Variable
o Customer satisfaction

Moderating Variable
o Regulatory authorities (Government & Political parties)
Theoretical Framework

Independent Variable

Company Introduction
Pakistan Tobacco Company Limited is part of British American Tobacco, the world's
most international tobacco group, with brands sold in 180 markets around the
world.
We produce high quality tobacco products to meet the diverse preferences of
millions of consumers, and we work in all areas of the business - ‘from seed to
smoke’.
Since 1947 Pakistan Tobacco is operating in Pakistan, which makes them Pakistan’s
first foreign investment.
Pakistan Tobacco Company Limited was incorporated in 1947 immediately after
partition, when it took over the business of the Imperial Tobacco Company of India
which had been operational in the subcontinent since 1905.
Company is committed to providing consumers with pleasure through excellent
products, and to demonstrating that we are meeting our commercial goals in ways
that are consistent with reasonable societal expectations of a responsible tobacco
group in the 21st century.

The British American Tobacco Group

Pakistan Tobacco Company is part of the British American Tobacco Group, one of the
world's most international business groups.
Tobacco has been smoked for at least the last three thousand years. Christopher
Columbus found it when he landed in the America in 1492, but ancient temple
carvings show tobacco being smoked in Central America as long ago as 1,000 BC.
Ever since it arrived in Europe since the late 15th century, tobacco has divided
opinion, sparked controversy, and generated substantial revenue through tax. Not
long after it reached Europe, it was being described in terms ranging from "vile
custom of manifold abuses" and "feast for the fiend" to "the divine herb" and
"cornucopia of all earthly pleasure". Tobacco has periodically been subject to
royal disapprovals, the whims of fashionable use, medicinal studies, smuggling,
trade disputes, and bans.
At Pakistan Tobacco Company we aim to demonstrate responsible corporate conduct
across all aspects of our operations.

We abide by this philosophy each step of the way: from appropriate marketing and
consumer information to supporting sensible tobacco regulation; from respecting
workplace human rights and reducing our environmental impacts to contributing to
local communities. We seek to work continuously to engage with our stakeholders,
to balance their views and to align our business decision-making with reasonable
societal expectations of a modern tobacco group.

We recognize that CSR presents particular challenges for a tobacco company.

Tobacco products pose real risks to health and raise important questions about how
best to define responsible product stewardship. We therefore believe that for our
business, the only meaningful approach to CSR is one based squarely on our
products, on the issues around them and on ways of responding to sometimes
strongly held views of our stakeholders.

Social Reporting is a relatively new discipline that, put simply, is the process
of listening and responding to stakeholders. It is not merely a report that is
produced annually, but a process to ensure that companies are behaving in line
with society's reasonable expectations.

Social Reporting has proven to be an effective mechanism to objectively and

robustly address society's needs while embedding the idea of engagement into all
areas of business.

By producing the Company's first Social Report, Pakistan Tobacco Company has
attempted to engage constructively with its stakeholders.

The process provides a structured approach for us to:

- Understand more about the expectations of our stakeholders
- ensure that these expectations are given due consideration in the company's
decision making
- demonstrate with actions that we are responsive to reasonable stakeholder
expectations and concerns.

We have chosen to follow the most rigorous international standard, AA1000, set by
the Institute of Social and Ethical Accountability. In addition, in order to
ensure full compliance with AA1000 and verify the entire reporting process, we
have selected Bureau Verities Quality International as a social and ethical
auditor.

Youth Smoking prevention

We strongly believe children should not smoke, and smoking should only be for
adults who understand the risks associated with it.
British American Tobacco Group companies support and run program worldwide
tackling underage smoking. Due to concerns expressed on youth smoking Pakistan
Tobacco Company has taken initiatives on several fronts such as voluntary
withdrawal from electronic media, prohibiting the use of celebrities in marketing
material and embedding a robust marketing code; the International Marketing
Standards (IMS).
PTC is the first company to pilot a retailer education program in 1999 and
continue to do so. Additionally, all our packs and advertising materials have a
voluntary inscription with the legend ‘under-age sale prohibited.’ We have
supported the government in raising the minimum age limit from sixteen to eighteen
through recent tobacco legislation.
Education programs aim to give young people ‘life skills’ to deal with the many
challenges they face during adolescence, including peer pressure to smoke. Such
program are amongst the initiatives that British American Tobacco Group companies
worldwide sponsor and support to help convince young people not to smoke. We are
willing to work with the Ministry of Education/Health to develop educational
modules for incorporation in the national curricula, but the program content is
best left to experts and its delivery to teachers or youth leaders.

Mobile Doctors Program

Our dedicated Mobile Doctors team takes pride in providing health care in areas
where there are no medical facilities.
Since the early 80’s we have been running a mobile doctors program. The program
has been growing over the years and we now have 9 mobile medical units in our leaf
region and at our factories. These provide free medical check-ups and diabetic
screening as well as eye care and general health advice in areas around our
factories and the leaf growing regions, which have poor medical facilities. On an
average, we aim to provide medical assistance to some 3000 people per month. This
facility has also been used extensively during natural calamities such as floods,
earthquakes and drought.

Afforestation
Pakistan Tobacco Company is already recognized for its work in afforestation and
currently is planting four million trees per year.
Under this program, we have planted over 30 million trees since the project
started in 1981. PTC is also looking into the possibility of expanding this
activity in other parts of Pakistan. Clearly, our agricultural infrastructure is
strongest where we work with our growers and therefore our focus on a forestation
will be where we have the appropriate resource to support them.
Considering the fact that only four percent of Pakistan's land mass is covered by
forest (whereas ideally it should be at least twenty percent), we have instituted
probably the largest private sector reforestation program in Pakistan.
Learning Resource Centers
Keeping in mind the need to invest in education & the non-availability of quality
institutes, the company has established free Learning Resource Centers (LRC) in
our Leaf Areas in the Punjab (Gujarat), and the NWFP ( Mansehra, Yar Hussein, &
Bunair).
In addition, since we lack separate institutes for women, the LRC at Adam Zai in
the vicinity of our factory in Akora Khattak was set up to provide opportunities
to the local women. The major

Objective was to give access to IT education free of cost to our stakeholder’s

families. It was also agreed to use these centers in the future for imparting
vocational training & generating health & hygiene awareness.
Our LRCs are approved by the relevant Government authorities.
Currently, we have seven LRCs at our factories and in the Leaf growing areas.
These centers provide state-of-the-art IT skills to the children of our employees
and to the members of our community.
The benefits that will be derived from the program can be summarized below:
• Contribute in the development of skilled resources in the country
• Help participants to obtain employment
• Generate Technology Awareness
• Bridge the Information Gap by providing access to the world of Internet
• Help women in getting training/awareness, as there are no separate centers
for women in remote areas
• Provide a forum to discuss & resolve issues
• Bring people with diverse interests and backgrounds together to a common
forum

Business with Responsibility

Corporate social responsibility, or CSR, is the commitment of business to

contribute to sustainable economic development, working with employees, their
families, the local community and society at large to improve their quality of
life, in ways that are both good for business and good for development. We at PTC
believe CSR to be defined as; “it is all about how we make our money and not how
we spend it.”
There is a strong tradition by the corporate sector in Pakistan to support local
development initiatives and these have tended to range from supporting the
development and or construction of schools, sponsoring children for improved
education opportunities through NGOs to providing free medicines for poorly
resourced medical facilities to cultural heritage and restoration work throughout
Pakistan. While all valuable contributions in their own right, these gestures have
tended to be linked to corporate interests rather than working towards sustainable
development. Nonetheless some corporations have initiated policies and program
that embrace a more strategic and holistic approach to corporate giving. Numerous
private and non-government sector organizations are embarking on producing social
audits and reports to AA100 standards. In

essence the practice is about engaging with stakeholders and gauging public
opinion on the way a company conducts its ‘business’ and where improvements may be
likely.
PTC took the step of formalizing its CSR and its corporate social investment
initiatives in a report called a Social Report. We begun this process by first
conducting a Stakeholder Mapping and Classification research and followed up
through formal stakeholder dialogue by using the Global Reporting Initiative (GRI)
as a model and the AA 1000 standard as the measuring tool involving third party
audit at every stage of the process.
What is Social Reporting? Social Reporting is a new business practice for the
Pakistan Tobacco Company (PTC) that will allow PTC to have its social performance
externally and objectively audited to international standards. Social reporting
will enable PTC to engage with its stakeholders directly and/or indirectly over
issues that surround the business in an accountable and transparent manner. The
social reporting exercise will offer PTC an opportunity to try and meet reasonable
stakeholder expectations. In return stakeholders will have an opportunity to
discuss key issues and influence PTC decisions and policies in the future. This
process will allow PTC to make decisions based on the social implications of their
business and not financial
considerations alone.
Social reporting is about providing an accurate and transparent account of the
company’s operations; providing a platform for communicating concerns and through
stakeholder dialogue an early warning system about issue-awareness and the
management of social issues. The process itself involves identifying a broad range
of public stakeholders with whom consultations can be held. These can vary from
the government sector to civil society organizations, to the private sector and
pressure groups etc. Then to hold meaningful dialogue and consultations with these
groups’ asequal partners. Agreement will be sought on the actions between PTC and
the
Stakeholders.
The process of conducting stakeholder consultations and reporting back to the
parties will be facilitated by an external agency (i.e. the facilitator) to
maintain objectivity, impartiality and credibility. The process will be
implemented to an international standard for social reporting (AA1000) which has
been developed in the United Kingdom (UK). This process will be externally audited
and verified again by an external agency at all stages of the implementation of

this process. This is an incremental process rather than one that prescribes to
absolutism. The process will endeavor to build and cultivate relationships between
PTC and its stakeholders that
are based on the principles of mutual trust. The facilitator will act as the
bridge between PTC and its stakeholders and provide the necessary channel for
communicating concerns, issues and possible ways forward. The facilitator and the
stakeholders will own this process and PTC will be open and responsive in
explaining what it is doing.

Literature Review
Marketing Ethics & Social Responsibility
The corporate environment and corporate philosophy are crucial determinants of
ethical behavior. This is particular true in situation in which the mean for need
satisfaction.
The product & service provided to satisfy customer “need” can be harmful to the
individual or to society (e.g. drugs, tobacco) or causal deterioration. Given the
fact that all companies prosper when society prosper. Many people believe that all
of us, companies as well individuals, would be better off if social responsibility
were an integral component of every marketing decision.
The social marketing concept requires that all marketers adhere to principles of
social responsibility in marketing of there good and services: that is they should
endeavor to satisfy need and want of their target markets in ways that preserve
and enhance well being of consumers and society as whole. thus restructured
definition of the marketing concepts calls o marketers to fulfill the needs of the
target audience a way that improve society as a whole, while fulfilling the
objective of the organization.
According to societal marketing concept, fast food restaurants should develop food
that contains less fat and starch and more nutrients. And marketers should not
advertise food to young people
in ways that encourage the over eating, or use professional athletes in liquor or
tobacco advertisement, because celebrities so often serve as role model for the
young.
The primary purpose of studding consumer behavior as a part of marketing
curriculum is to understand why and how consumer makes their purchase decision.
These insight enabler marketers to design more effective marketing strategies
.especially today when advance technologies enable marketers to collect more data
about the consumers and target them more precisely.
A number of companies have incorporated specific social goals in their mission
statement and include programs in support of these goals are integral component of
their strategic planning. they believe that marketing ethics and social
responsibility are important components of organizational effectiveness.
Most companies recognized that socially responsible activities improve their image
among consumers, stockholders, the financial community, and other relevant
publics. They found that ethical and social responsible practices are simply good
business, resulting not only in favorable image. But ultimately in increased
sales.

The converse is also true: perception of a company’s lack of social responsibility

or unethical marketing strategies negatively effect consumer purchase decision
Source: consumer behavior 9th edition by Schiff man

Traditional view of Social responsibility

It was believed that if the firm or company is satisfying the need or wants of
its customers in a competitive manner and fulfilling the purpose of its existence
then it is socially responsible.
In other words if the company is using the resources in an efficient manner and
providing goods and services at the prices that the customers are willing to pay,
it means that it is fulfilling its objective and earning a profit. In doing so the
company creates jobs, provide income to them and increase the wealth of the
society as a whole. So the social responsibility and successful marketplace
performance was considered to be one and same thing.
Changing Views
Although not everyone accepted the notion that business was solely an economic
institution with only economic responsibilities, it does seem that this view of
the corporation has been the prevailing view in our society. And as long as the
system worked well enough for most people, there were not likely to be any serious
questions raised about the social performance of business outside the marketplace
context.
It was the concern with social responsibilities that began to raise serious
questions about this view of the corporation and its responsibilities to society.
The problems that social-responsibility advocates addressed, such as pollution and
unsafe workplaces, were in large part created by the drive for efficiency in the
marketplace.
Thus it began to be argued that there was a divergence between the performance of
business in the marketplace and the social aspects of business behavior.
(Donaldson 1982)
Many began to believe that cleaning up pollution, providing safer workplaces,
producing products that were safe to use, promoting equal opportunity, and
attempting to eliminate poverty in our society had something to do with promoting
human welfare and creating the "good life" in our society. Yet business was
causing some of these problems and perpetuating others in its quest for an
efficient allocation of resources.
For example, by economizing in the use of resources and disposing of its waste
material as cheaply as possible, business was causing some serious pollution
problems regarding air quality and poisoning of drinking water. By always hiring
the best qualified person for a job opening, business was helping to perpetuate
the effects of discrimination against minorities and women.
It was at these points of intersection between the economic performances of
business and changing social values of society that questions about corporate
responsibility began to arise. Business increasingly came to be viewed as a social
as well as economic institution that had social impacts needing the consideration
of management.
Social Responsibility Theory and Practice
The problem here is how to incorporate social responsibility into management
behavior so that it should not be considered as peripheral to main business
operations.
This is a most difficult task--and one that has not yet been successfully
accomplished. While there is a good deal of evidence that the language of social
responsibility and social responsiveness is now an accepted part of management
theory and practice, such concepts remain more or less peripheral concerns that
have not replaced the traditional economic responsibilities of business.
By and large, the economic theory of the firm has not been replaced by any new
theories or ways of thinking about the firm and its responsibilities. The bottom
line of corporate organizations as well as for the nation as a whole is still
economic in nature.

There are several reasons for this, not the least of which is the difficulty of
implementing social responsibility in a competitive context. Being socially
responsible costs money, Pollution control equipment is expensive to buy and
operate. Ventilation equipment to take toxic fumes out of the workplace is
expensive. Proper disposal of toxic wastes can be very costly and time consuming.
These efforts cut into profits. In a competitive system, companies that go very
far in this direction will simply price themselves out of the market. This is a
fact of life for companies operating in a free enterprise system, a fact the
social responsibility advocates never took seriously.
Social responsibility doctrines provide no clear guidelines for managerial
behavior. The critics of social responsibility were right when they exposed the
difficulty of providing a legitimate basis for social action by corporate
managers. Social-responsibility advocates provided no sound moral basis for
managerial social action other than some impossible-to-measure notions of
enlightened self-interest or creation of a better corporate image--worthy goals
perhaps, but certainly difficult to implement in a competitive context.
Nevertheless, if government involve itself or rewrite the rules under which all
corporations operates, only then it might be possible to execute this theory of
social responsibility.

Modern view of social responsibility

Now CSR (corporate social responsibility) is considered obligation to
• Customers
• Employees,
• Shareholders
• Communities,
• Ecological considerations
Its mean company have to consider all these obligation kept in mind and work for
their betterment.
• Second thing is that CSR linked with sustainable development which argues
that firm have not only take decision on profits and dividends but they also
participate in immediate and long-term social and environmental consequences of
their activities.
• Third thing because firm have to do the social responsibility. that now
individual becoming aware and they know what is right & what is wrong. Basically
issue of global warming arises in 1980 and EPA (environmental protection agencies)
comes in action against global warming and bad health issues so companies like PTC
have to do more social work because of nature of their business.
In some countries government regulation regarding environmental and social issues
has increased.
A widely quoted definition by the World Business Council for Sustainable
Development states that "Corporate social responsibility is 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."

Sources:http://en.wikipedia.org/wiki/Corporate_social_responsibility
http://ravi.lums.edu.pk/cmer/Conference2005/images/Business%20with%20Responsibilit
y.pdf
Customer Satisfaction
Customer satisfaction theories are based on the social and experimental psychology
studies, carried out by Hoppe (1930) and Lewin (1936) in the first half of the
20th century. Investigating the construct self-esteem" (and self-confidence),
these scholars discovered the foundation of the 'confirmation/disconfirmation'
paradigm useful to explain the "satisfaction" perception and the link between
satisfaction and trust (or at least self-trust)/What is relevant in this 'return
to the past' is not only about the nature of the satisfaction construct (in the
"expectations minus performances" definition), but also the evidence of close
connections between satisfaction over time and trust (Bitner, 1995; Costabile
1998). This connection allowed for the interpretation of the dynamic of market
relationship, and thus the origin of trust and loyalty, both grounded on the
experience of satisfaction accumulated over time.
The first conceptualizations of customer satisfaction in marketing studies
(Cardozo, 1965; Hunt, 1977; Oliver, 1977 and 1980; Olson and Dover, 1979) came
without explicit reference to the Lewin experiments. The research was concentrated
into the determinants of satisfaction, attempting falsify the
confirmation/disconfirmation paradigm. Many experiments produced interesting
evidence about

the antecedents and the mediating variables having a role in the customer
satisfaction perception, but did not decrease the paradigm's explanatory capacity
(Yi, 1990; lacobucci, Grayson and Omstrom, 1992; Oliver, 1997; Costabile 1998;
Fournier and Mick, 1999). Since the construct is inherently personal and as
individual as each consumer himself, defining and measuring it is a challenge.
Generally, however, satisfaction is now defined as "the consumer's response to the
evaluation of the perceived discrepancy between prior expectations (or some norm
of performance) and the actual performance of the product as perceived after its
consumption." The problem of measuring these two quantities remains.
Most definitions have favored the notion of consumer satisfaction as a response to
an evaluation process. Specifically, there is an overriding theme of consumer
satisfaction as a summary concept (i.e., a fulfillment response (Oliver 1997);
affective response (Halstead, Hartman, and Schmidt 1994); overall evaluation
(Fornell 1992); psychological state (Howard and Sheth 1969); global evaluative
judgment (Westbrook 1987); summary attribute phenomenon (Oliver 1992); or
evaluative response (Day 1984)). However, there is disagreement concerning the
nature of this summary concept. Researchers portray consumer satisfaction as
either a cognitive response (e.g., Bolton and Drew 1991; Howard and Sheth 1969;
Tse and Wilton 1988) or an affective response (e.g., Cadotte, Woodruff, and
Jenkins 1987; Halstead, Hartman, and Schmidt 1994; Westbrook and Reilly
1983).Furthermore, operational definitions may include a behavioral dimension of
satisfaction (Halstead, Hartman, and Schmidt 1994), although conceptual
definitions are void of a behavioral orientation. A final all-encompassing
definitional framework (Giese and Cote, 2000) systematically

collimated these various views of satisfaction, as well as consumers'

perspectives, to allow context-specific definitions to be drawn up and be compared
consistently across different situations.
Recent developments in the study of customer satisfaction have investigated the
emotional and affective components of satisfaction and the dynamics of the
construct over price ranges (Westbrook, 1987; Oliver, 1997; Fournier and Mick,
1999). Many marketing scholars are also attempting to understand the variables
that intervene between the perception of satisfaction and the choice of repurchase
of a brand, or a set of brands (Oliver, 1999).
To sum up, it is possible to claim that three decades of research into customer
satisfaction have demonstrated the causal connection between satisfaction - built
up as a result of market transactions that confirm the performance expectations of
the customer -and price; as well as their influence on repurchase decisions, and
thus on loyalty. Even if the 'satisfaction-price-loyalty' linkage has not always
been verified - apparent high levels of satisfaction may not result in a behavior
characterized by high loyalty, and vice versa (Jacoby and Chestnut, 1978) - due to
the many intervening variables of the exchange process over the time (Jones and
Sasser Jr., 1995; Oliver, 1999)

Pricing
Pricing strategies have effects on consumers beyond increasing or decreasing
demand. They can change consumer's perceptions of a product, as well as converting
them into making positive public statements about it without actually liking it.
One view of the price-quality relationship is that the effort (money) expended to
obtain the product leads to higher satisfaction. There are several psychological
justifications for this. On the one hand, cognitive dissonance theory (Festinger,
1957) would interpret this type of effect as an example of insufficient
justification. When an individual performs a neutral or negative behavior and
receives a neutral or negative outcome, this is assumed to create dissonance that
can only be reduced by enhancing the cognitive evaluation of the outcome. For
example, if a consumer went to an expensive restaurant for dinner and then found
the food awful, cognitive dissonance theory holds that the discomfort stemming
from the difference in the perception of quality projected by the price and the
actual quality of the food itself can only be reduced by the consumer enhancing
his evaluation of the food - convincing himself that the utility derived from the
food is closer to the utility he had previously assumed it would hold.
On the other hand, impression management theory (Tedeschi, 1981; Tedeschi,
Schlenker, & Bonoma, 1971) would interpret this effect as evidence for the simple
assumption that people do not want to appear irrational or unwise. Therefore, when
an individual performs a neutral or negative behavior and receives some neutral or
negative outcome, the individual becomes concerned with how other people will
evaluate this poor judgment. In the example above, the consumer would not want to
admit his dislike for the food, for fear of how other people would view his
opinion. Even without any input from other people, he assumes that the high price
must be an indicator of good quality. He therefore describes the food in positive
terms to avoid appearing foolish, without enhancing his own cognitive evaluation,
in adherence to what he perceives as the consensus.

A third view, based on the psychological theory of self-perception (Bern, 1965,

1972), states that individuals come to know their own internal states (beliefs,
feelings, desires) partially by inferring from observations of their own behavior
and the circumstances in which the behavior occurs. When these internal cues are
weak, ambiguous and uninterruptible, the individual must rely on external cues
(the behavior of others, or the marketing and pricing strategies that businesses
use) to infer internal states - thus, a consumer's attitude towards a product may
be created as much by its price as by other acting forces. In the restaurant
example, the consumer, not really knowing whether the food was good or bad, or
being unsure of his judgment, would correlate the high price of the meal with a
high level of satisfaction. Thus, business can use pricing strategies to actually
create quality in the minds of their consumers. That is, the expended effort (the
purchase price paid) may simultaneously lead to satisfaction with the chosen
alternative, and provide a concrete index of quality of the product.

THEORETICAL FRAMEWORK
Following are the variables involved in our research.
Independent Variable
• Price based on customer satisfaction, self esteem,
conformation/disconfirmation paradigm, loyalty and the linkages between
satisfaction and the price quality relationship. If quality remains constant and
company increases prices then how customer responds.
• Impact of social welfare activities on consumer satisfaction. We basically
want to see how these activities motivate the customer.
Dependent Variable
• Customer satisfaction
Moderating Variable
• Regulatory Authorities
• It involves duties, taxes, and tariff. These factors have strong impact on
company pricing and marketing strategies and ultimately on customer satisfaction.
The price quality relationship shows that if a high price is paid for a certain
product, the customer then wants better quality by associating good quality to the
price being demanded. The impression management theory supports this view holding
the assumption that people want to be accepted and do not want to appear unwise
and thus approve of the product that they have spent so much on. The third vies
which of the self-perception theory demonstrates the individual’s reliance on
external cues to infer internal states and so the attitude may be created as much
by price as other acting forces.
Prices also reflect the degree of customer satisfaction. This link based on self-
esteem, which lies in the consensus response to the evaluation of the perceived
discrepancy between prior expectations (that come in the price being paid) and the
actual performance of the product perceived after its consumption). Consumer
response is either a cognitive response or an affected response. On the whole, the
casual connection between satisfactions, built up a result of market transactions
that confirmed the performance expectations of the customer and price, as well as
their influence on repurchase decisions, and thus on loyalty. Even if the
“satisfaction price loyalty:” linkage has not always been verified, apparent high
levels of satisfaction may not result in a behavior characterized by high loyalty

HYPOTHESES
Hypotheses 1
There is a relationship between satisfaction (confirmation of the performance
expectations of the customer), and pricing of a product.
Hypotheses 2
There is a relationship between social welfare activities and customer
satisfaction.

TYPE AND NATURE OF STUDY

This study can be classified as both co relational and causal. It deals with the
identification of the important factors associated with how pricing and social
welfare activities have a significant impact on the customer satisfaction.
The study focuses on finding out independent variables (pricing, social welfare
activities). It tends to measure the degree to which the variables vary and their
direction of variation.

RESPONDENTS OF THE STUDY

The respondents chosen were males and conveniently selected, as each and every
person is a consumer of any selected brand. This method was adopted since it has
the least bias and offers more general approach. Moreover, it serves to show the
significance of pricing strategies on the final purchase decision, since it
defines about those people that know the significance of pricing on how they
behave towards a product which incorporate itself in any social welfare cause.

SAMPLING DESIGN

Sampling is the process of selecting a sufficient number of elements from the

population so that
by studying the sample, and understanding the characteristics of the sample
subject, it would be possible to generalize the characteristics of the population
elements.
Convenient sampling process has been chosen for distributing the questionnaires.
A total of 100 questionnaires have been distributed, thus indicating a sample size
of 100 respondents for each product (Gold Leaf, Capstan, and Gold Flake).

DATA COLLECTION METHOD

The research was based on quantitative and primary sources of data so the
instrument used to conduct a research was a questionnaire. A questionnaire is a
pre-formulated return set of questions to which respondents record their answers.
The primary reason for using the questionnaire as the research instrument was that
it fulfilled all the research requirements without occupying too much time of both
the respondent as well the researcher.

Method
For this study, questionnaires were distributed to respondents of all occupants.
Moreover, since the study was confined to the local area of Rawalpindi & Islamabad
they were administered personally. This aided the quick recollection of the filled
questionnaires. Moreover doubts of the respondents regarding the questionnaires
were clarified on the spot and encouraged them to give the frank answers.
There were total of sixteen (14) questions that were asked.
The questionnaire was divided in to three sections.
• The first section consists the demographic information of the respondents.
• The second section was about the social welfare activities and
• The third part was about the pricing.

DATA ANALYTICAL TECHNIQUE

Statistical evaluation soft ware known as SPSS was used to analyze the
questionnaire. Overall evaluations and different means and charts were taken from
the SPSS.
DATA ANALYSIS
Total respondents were males and total of 100 questionnaires were distributed
among them.
The respondents were ranging in the following ages.
• 78% respondents were between in the ages of 19-25
• 20% were in between in the ages of 26-35, and
• 2% were above the ages of 35.

8% respondents were married while 92% were unmarried. Gold Leaf was found a
favorite brand as 68% respondents were the customers of this brand. Capstan users
was 26% while 6% respondents were the consumers of Gold Flake.60% consumers were
the loyal customers of PTC while 40% were not the loyal customers of PTC.
8% respondents said that price is an important element for them. 64% preferred
quality, 7% were on social welfare, and 21% preferred satisfaction as an important
element. 72% respondents respond that if PTC indulged itself in a social cause
they will prefer it while 28% respondents deny it.
70% respondents said that they will motivate if company indulged itself in a
social cause while 30% reject it. 55% respondents said that they are satisfied
with the social welfare activities of company while 45% respondents were not
satisfied with its social welfare activities.62% said that PTC has a competitive
edge over others while 38% did not accept it.
66% respondents said that they give importance to social welfare while purchasing
where as 44% said that they does not give any importance to social welfare while
purchasing. 48% said that they are satisfied with pricing strategy of Pakistan
Tobacco, 40% remain neutral and 12% were satisfied with the pricing strategy of
the Pakistan Tobacco Company.
57% respondents said that they will prefer their brand if company increased the
prices of their products while quality remains the same, 27% remain neutral while
16% did not agree the option and said they will switch the brand.
52% said they are willing to pay more while 48% were not willing to pay more, if
company increased its prices.
51% said they will pay less than one rupee, 49% respond that they will pay from
one to three rupee. No respondent was willing to pay more than three rupees for
the social cause.
72% respondents said that they are satisfied with the pricing strategy of the PTC
while 28% was dissatisfied with the pricing strategy of the company.
38% said that Pakistan Tobacco justify its self in charging more, 41% remains
neutral while 21% disagree with this justification.

Proof of the model

Through our research we have concluded that if PTC increase the prices of its
brand and quality remains the same, even then customer are willing to purchase
their products. It means that increase in prices do not decrease customer
satisfaction level.
There is a weak relationship between social welfare activities and customer
satisfaction as only 7% of the total sample population prefers this element over
others.
Although company is involved in social welfare activities but most of the
customers are unaware of it and said that if company involved itself in social
welfare activities they will prefer and are willing to pay more.

RECOMMENDATIONS
On the basis of our research and customer responses, following are the
recommendations for the Pakistan Tobacco Company.

• Quality is the most important element for most of the consumers. In addition
to that company must focus in creating awareness regarding their social welfare
activities among masses. As only 7% of the total sample population have preferred
this element over others.
To create awareness company must run the campaigns, arrange seminars and can run
infomercials etc.
• During the research we found that in spite of different social welfare
activities, consumers are unaware regarding the activities run by PTC. Most of
respondents asked in which social welfare activities this company involves? We
recommend the company should position itself as socially responsible company and
be closer in the consumers mind and before starting of any activity consumers must
be aware of it.
• Our analysis showed that most of the consumers are willing to pay more if
the company indulges itself in social welfare activities, but they are ready to
contribute less than one rupee.
Therefore, we recommend that company must focus on the quality of their brands and
with this company must involve itself in social welfare activities.

ANALYSIS
Our research has made it clear that our society do not give much importance to
social welfare activities. One of the reasons behind this is literacy level and
the lack of recognition of such (social responsibility) acts at the government,
corporate as well as rudimentary level. So the company needs to create awareness
among people.
We have also concluded that although people acknowledge such welfare activities
but as far as the contribution in terms of money is concerned 51% of the sample
population are willing to spend less then 1 Rs.
There is no doubt that social responsibility plays vital role in overall
improvement of the society but in our scenario the people needs to develop
collective thinking rather then individual thinking. It will take time to develop
such thinking or the concern for the whole society.
Nevertheless in coming future the social responsibility will become the important
factor in not only developing the good reputation but it will become the necessity
for the survival of any commercial organization.

CONCLUSION

In conclusion we must say, social responsibility is one of the most important

factors for any company in today’s corporate business environment. Companies are
investing their billions of dollars for the social marketing. The basic aim beside
this activity is to present itself a socially responsible company among masses and
to differentiate itself from those of competitors.
The only profit generation by selling its products and services is not an
important job for today’s corporate level businesses. The companies are spending
their profits and revenues on the consumers from which they earn these huge
profits. Now, companies are more socially responsible than ever.
Pakistan Tobacco Company also indulged itself in social causes. The company is
involved in anti smoking policy for under ages, building schools in far areas,
plantation and women training programs. The basic aim behind is to minimize its
negative image of being a non cooperative and dangerous company for the citizens.

APPENDIX
Gender
 Frequency Percent Valid Percent Cumulative Percent
Valid Male 100 100.0 100.0 100.0

Occupation

Occupation

Frequency Percent Valid Percent Cumulative Percent

Valid Student 90 90.0 90.0 90.0
Business 4 4.0 4.0 94.0
Salaried 6 6.0 6.0 100.0
Total 100 100.0 100.0
AGE

Frequency Percent Valid Percent Cumulative Percent

Valid 19-25 78 78.0 78.0 78.0
26-35 20 20.0 20.0 98.0
above 35 2 2.0 2.0 100.0
Total 100 100.0 100.0
Marital Status

Frequency Percent Valid Percent Cumulative Percent

Valid married 8 8.0 8.0 8.0
unmarried 92 92.0 92.0 100.0
Total 100 100.0 100.0

Cigarette Brand

Frequency Percent Valid Percent Cumulative Percent

Valid Gold leaf 68 68.0 68.0 68.0
Capstan 26 26.0 26.0 94.0
Gold flake 6 6.0 6.0 100.0
Total 100 100.0 100.0
 Loyalty to PTC

Frequency Percent Valid Percent Cumulative Percent

Valid YES 60 60.0 60.0 60.0
NO 40 40.0 40.0 100.0
Total 100 100.0 100.0

Important Element

Frequency Percent Valid Percent Cumulative Percent

Valid price 8 8.0 8.0 8.0
quality 64 64.0 64.0 72.0
social welfare 7 7.0 7.0 79.0
satisfaction 21 21.0 21.0 100.0
Total 100 100.0 100.0

Social Welfare Indulgence

Frequency Percent Valid Percent Cumulative Percent

Valid yes 72 72.0 72.0 72.0
no 28 28.0 28.0 100.0
Total 100 100.0 100.0
Motivation

Frequency Percent Valid Percent Cumulative Percent

Valid yes 70 70.0 70.0 70.0
no 30 30.0 30.0 100.0
Total 100 100.0 100.0

Satisfaction With Welfare

Frequency Percent Valid Percent Cumulative Percent

Valid yes 55 55.0 55.0 55.0
no 45 45.0 45.0 100.0
Total 100 100.0 100.0

Competitive Edge of PTC

Frequency Percent Valid Percent Cumulative Percent

Valid yes 62 62.0 62.0 62.0
no 38 38.0 38.0 100.0
Total 100 100.0 100.0

Importance to Social Welfare In Purchasing

Frequency Percent Valid Percent Cumulative Percent

Valid high 16 16.0 16.0 16.0
moderate 50 50.0 50.0 66.0
low 20 20.0 20.0 86.0
negligible 14 14.0 14.0 100.0
Total 100 100.0 100.0

Satisfied with Price

Frequency Percent Valid Percent Cumulative Percent

Valid highly satisfied 8 8.0 8.0 8.0
satisfied 40 40.0 40.0 48.0
neutral 40 40.0 40.0 88.0
highly dissatisfied 6 6.0 6.0 94.0
dissatisfied 6 6.0 6.0 100.0
Total 100 100.0 100.0

Quality Remains Constant, Price Increased

 Frequency Percent Valid Percent Cumulative Percent
Valid strongly agree 15 15.0 15.0 15.0
Agree 42 42.0 42.0 57.0
Neutral 27 27.0 27.0 84.0
Disagree 6 6.0 6.0 90.0
strongly disagree 10 10.0 10.0 100.0
Total 100 100.0 100.0

Willing to Pay More

Frequency Percent Valid Percent Cumulative Percent

Valid yes 52 52.0 52.0 52.0
no 48 48.0 48.0 100.0
Total 100 100.0 100.0
How Much Willing to Pay

Frequency Percent Valid Percent Cumulative Percent

Valid less than 1 51 51.0 51.0 51.0
1-3 49 49.0 49.0 100.0
Total 100 100.0 100.0

Satisfaction With Pricing Strategies

Frequency Percent Valid Percent Cumulative Percent

Valid highly satisfied 5 5.0 5.0 5.0
Satisfied 67 67.0 67.0 72.0
Dissatisfied 21 21.0 21.0 93.0
highly dissatisfied 6 6.0 6.0 99.0
5.00 1 1.0 1.0 100.0
Total 100 100.0 100.0

Justification to Charge More

Frequency Percent Valid Percent Cumulative Percent

Valid strongly agree 3 3.0 3.0 3.0
Agree 35 35.0 35.0 38.0
Neutral 41 41.0 41.0 79.0
Disagree 14 14.0 14.0 93.0
strongly dis agree 7 7.0 7.0 100.0
Total 100 100.0 100.0