CUSTOMER BUYING BEHAVIOR TOWARDS RESPONSIBLE BUSINESSES IN INDIA- A STUDY OF SMES.

Corporate Social Responsibility (CSR) is mostly associated with solving problems on the social, economic and the environmental level which supports the reputation and image of a business. It requires to be integrated into the main business strategies and daily activities to gain the maximum benefits like goodwill in the market, high market share and large database of customers. Small and Medium Sized Enterprises(SMEs) is the critical sector of Indian Economy. This sector generates huge employment opportunities, aid innovation, help in industrializing the rural and backward areas, and contribute enormously to the socio- economic development of the country . It can be seen that CSR in the Small and Medium Enterprises (SMEs) of India, is still in embryonic stage. It has gained noticeable attention when many of the SMEs crossed the threshold of “2 percent rule” of Companies Act 2013, passed by The Government of India. Thispaper investigates the customer buying behaviortowards the responsible SMEs in India.The research is quantitative in nature and based on primary data collected through questionnaire. The customers were selected through convenience random sampling of Delhi/NCR region in India. The non-parametric test i.e.Chi square test was done to prove the hypotheses proposed. The findings of the paper are: First, the customers are aware of the SMEs which are responsibletowards society. Second, informal CSRand high proximity to the local market help SMEs get quick response (both positive and negative) from the customers in contrast to large companies and MNC’s. Thirdly, integration and implementation of CSR into business transforms the customers into loyal customers towards the responsible brand and do not switch even if needed to pay a bit more than the competitive non-responsible brand. The practical implications of the paper are to motivate other SMEs to engage in CSR for long term sustainable benefits like brand building, competitive gains and high market share. Also, the SMEs can act as role models for the new startups and potential social enterprises.