Cause Related Marketing: A substitute for direct donations?
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Textbook
144 Pages
Summary
Despite the vast research on Cause-Related Marketing, little is known about the instrument’s potential to substitute direct donations. A company engages in Cause-Related Marketing when it teams up with a cause supporting charity organisation. The similarity with direct donations suggests that cause-marketed products bear the potential to tap the donation market. The present investigation extends prior research by identifying key drivers for purchasing cause-marketed products and its potential to gain access to the market of direct donations (Hypothesis 1). Second, the work tries to assess the geographic implications of a Cause-Related Marketing campaign (Hypothesis 2).The results of Hypothesis 1 indicate that cause-marketed products bear a potential to substitute direct donations. Findings of Hypothesis 2 show that the geographical context of a CRM campaign has implications on the cause supported by a nongovernmental organisation.
Excerpt
Table Of Contents
8.1
Appendix Methodology ... 125
8.1.1
Epistemological Considerations ... 125
8.1.2
Ontological Considerations ... 127
8.1.3
Quantitative vs. Qualitative... 128
8.1.4
Longitudinal vs. Cross Sectional ... 129
8.2
Ethical Considerations ... 129
8.2.1
Harm to Participants... 130
8.2.2
Lack of Informed Consent ... 130
8.2.3
Invasion of Privacy... 131
8.2.4
Involvement of Deception ... 131
8.2.5
Data Management... 132
8.3
Porter's Value Chain ... 133
Figures:
Figure 1 - Traditional approach of generating a strong fit ... 8
Figure 2 - The 4-Ps and 4-Cs around the CSR aspect ... 10
Figure 3 - Apple Inc.'s 4-Ps Marketing-Mix Strategy ... 11
Figure 4 - Contemporary Marketing Approach ... 14
Figure 5 - Profit-Cause relation of popular CSR instruments ... 16
Figure 6 - Influential factors of a CRM campaign (5 C's) ... 20
Figure 7 - Maslow's Pyramid of Needs (Maslow, 1943) ... 23
Figure 8 Strong-fit diagram ... 25
Figure 9 - Donations from private households 2006 & 2011 ... 27
Figure 10 - Official development assistance in 2009 in billion $ (OECD.org, 2009) .. 28
Figure 11 - The direct donation decision-making process ... 28
Figure 12 The cause-marketed products decision making process ... 29
Figure 13 - Choosing the correct research strategy and the correct research design
... 34
Figure 14 - Deductive vs. inductive principles ... 36
Figure 15 - The process of deduction) ... 37
Figure 16 - Distribution process of the questionnaire ... 43
Figure 17 - Questionnaire structure ... 46
Figure 18 - Hoffmann-La-Roche company structure ... 49
Figure 19 - Selective question to separate donators and non-donators ... 57
Figure 20 - Preferred mode of donation ... 58
Figure 21 - Number of involvements during a year for a charitable organisation ... 59
Figure 22 - Geographic preference of donators ... 60
Figure 23 - Reasons for not donating ... 61
Figure 24 - Corporations social responsibility ... 63
Figure 25 - Consumers Social responsibility... 64
Figure 26 - Consumers buying behaviour can positively influence remedies ... 65
Figure 27 Cause-marketed products are part of the CSR ... 66
Figure 28 Cause-marketed products are part of the consumer's responsibility ... 67
Figure 29 - Personal engagement in cause-marketed products ... 68
Figure 30 - Geographical context of cause-marketed products ... 69
Figure 31 - Price elasticity of cause-marketed products ... 70
Figure 32 - Is donating via cause-marketed products less complicated? ... 71
Figure 33 Cause-marketed products as a substitute for direct donations ... 72
Figure 34 - Reasons to neglect cause-marketed products ... 73
Figure 35 - Consumers demand more engagement from companies ... 74
Figure 36 - Most important national causes ... 76
Figure 37 - National preference of causes in Germany by distance ... 77
Figure 38 - Most important international causes ... 78
Figure 39 - International preference of causes in Germany by distance ... 79
Figure 40 - Differences between direct donations and cause-marketed products ... 83
Figure 41 - Perception of corporations' and consumers' responsibility is equal ... 84
Figure 42 - Reasons to neglect CRM products ... 86
Figure 43 - Reasons to neglect direct donations ... 87
Figure 44 - Preferred geographic context in terms of donation modus ... 89
Figure 45 - Preferred causes: international CRM, national CRM and direct donations
... 90
Figure 46 - Relative distance comparison. Ranking: 5 being the most important cause
... 92
Figure 47 - Complexity of a simplified donation process ... 94
Figure 48 - Environmental Performance Impact developed from the "Triple-Bottom-
Line" by Ambec & Lanole (2011) ... 98
Figure 49 - Virgin's Value Chain in accordance to Porter ... 133
Abstract
Despite the vast research on Cause-Related Marketing, little is known about the
instrument's potential to substitute direct donations. A company engages in Cause-
Related Marketing when it teams up with a cause supporting charity organisation.
The similarity with direct donations suggests that cause-marketed products bear the
potential to tap the donation market.
The present investigation extends prior research by identifying key drivers for
purchasing cause-marketed products and its potential to gain access to the market of
direct donations (Hypothesis 1). Second, the work tries to assess the geographic
implications of a Cause-Related Marketing campaign (Hypothesis 2).
The results of Hypothesis 1 indicate that cause-marketed products bear a potential to
substitute direct donations. Findings of Hypothesis 2 show that the geographical
context of a CRM campaign has implications on the cause supported by a
nongovernmental organisation.
Keywords: Cause-related marketing, direct donations, geographical context, marketing, donation
1
1. Introduction
In the new global economy, marketing has become a central issue for increasing the
market share in many saturated, hypercompetitive markets. The oversupply of goods
and their providers forces organisations to distinguish themselves from each other as
much as possible with many different marketing instruments. The more saturated a
market is, the higher are the costs of gaining market share via the use of a marketing
instrument (Cooper & Kaplan, 1988). New marketing methods and instruments have
thus been increasingly researched and implemented over the last decades. Up-to-
date marketing instruments hence can provide a price worthy and effective tool to
increase market share if implemented quickly and executed correctly.
One of the newest marketing tools is called Cause-Related Marketing. It implies that
a profit-oriented company teams-up with a non-governmental organisation (NGO) to
project the positive perception of the NGO by customers upon the brand image of the
profit-oriented organisation (Varadarajan & Menon, 1988). If a company now openly
communicates the partnership in order to create a better image which ultimately
should lead to higher sales figures, it is engaging in Cause Related Marketing (CRM)
(Adkins, 1999). CRM is considered as one of the most important marketing tools in
terms of companies influencing potential customers (Barone, et al., 2010), but is also
considered to be the most sensitive in terms of campaign failure (Pracejus & Douglas
Olsen, 2004). It is further argued that it has been one of the fastest-growing
marketing instruments worldwide (Independent Evaluation Group, 2009).
The saturated markets, high competition and the need for new marketing instruments
show the relevance of CRM as one of the big contemporary marketing approaches.
However, not all possibilities and risks have been assessed. So far, no research has
surveyed the probabilities and the hence inherited potential of CRM as a substitute
2
for direct donations. Previous studies were focused on the cultural differences of
certain geographic regions and its impact on the perception of CRM campaigns. The
generalisability of this published research on this issue is problematic since even the
smallest areas have a distinct perception based on the cultural diversity. The
geographical placement of this study is South Germany, the Free State of Bavaria.
Hence, this dissertation will examine two hypotheses (H):
Hypothesis 1: German customers who buy cause-marketed products perceive the
purchase as equal to a donation in the form of money, goods or time.
Hypothesis 2: German customers expect companies to support the same causes that
they donate to themselves and do not expect them to support different causes
(Cause Affinity).
The approach to empirical research adopted for this study was one of a quantitative,
self-completion questionnaire methodology.
Due to practical constraints, this paper cannot provide an in-depth view on more than
one geographical area. It is further beyond the scope of this study to examine
solutions for the indentified risks and obstacles to implement CRM as a substitute for
direct donations.
My main reason for choosing this topic is personal interest. The obvious trend
towards cause-marketed products can be seen in supermarkets, DIY-stores and
petrol stations and the customers' demand for more engagement in Corporate Social
Responsibility (CSR) (Siebert, 2012). It was my own ambition to research the topic
and add to its understanding.
The overall structure of the study takes the form of six chapters, including this
introductory chapter. Chapter two begins by laying out the theoretical dimensions of
3
both, the traditional and the contemporary marketing approaches, and what extent
CRM is connected to direct donations. The third chapter is concerned with the
methodology used for this study. The fourth chapter presents the findings of the
research, and chapter five focuses on the interpretation of the findings in respect of
statistics and literature. Finally, the conclusion gives a brief summary and critique of
the findings, and includes a discussion of the implication of the findings to future
research of this idea.
Throughout this paper the terms B2B and B2C will be used to refer to Business to
Business (B2B) and Business to Customer (B2C). CSR will refer to Corporate Social
Responsibility and CRM to Cause-Related Marketing.
4
2. Literature Review
Marketing is omnipresent in today's world. If we switch on the TV, go to the cinema
or enter a store, we are permanently confronted and surrounded with slogans, price
reductions, new offers and "vital" innovations. For a company, marketing is important
to differentiate themselves from competitors and to create awareness of a product or
brand between potential customers, whether it is a B2B or a B2C market
(Varadarajan & Menon, 1988). Furthermore, the financial success of a company and
its products strongly depends on its marketing ability (Lilien & Rajdeep, 2012).
2.1 Traditional Marketing
The first TV advertisement was aired in the 1950s. This was the first step into a new,
more scientific era of marketing. It was the birth hour of the traditional marketing
approach. The two dimensions of the early marketing era, in which the capitalistic
world has not yet reached the state of globalisation, are the customer and the
company.
2.1.1 Definitions of Traditional Marketing
Philip Kotler defined marketing as three different steps which, all together, give a
holistic impression about what marketing is. This definition is widely regarded as the
most comprehensive basic marketing definition available.
1) Marketing is the process by which an organisation relates creatively,
productively and profitably to the marketplace;
2) Marketing is the art of creating and satisfying customers at a profit;
3) Marketing is getting the right goods and services to the right people at the right
places at the right time at the right price with the right communications and
promotions (Kotler, 1991)
5
He therefore limits marketing solely to the fact that a company must pursue a
consumer to buy its product by promising a satisfying effect after the purchase. The
positive effect of the purchase should tie a customer to a certain brand or product.
Another definition is stated by the American Marketing Association (AMA). They
define marketing as the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large (American Marketing Association, 2007). The
AMA hereby adds certain stakeholders besides the customer, like partners and even
society. This gives a more contemporary point of view and already gives an
impression of the difference between traditional marketing and contemporary
marketing.
As one can see from those two very general and widely recognised definitions,
marketing seems to be about mastering certain aspects of interaction between
company and customer. Those aspects are called the Marketing-Mix or the 4-Ps
Strategy.
2.1.2 Concepts of Traditional Marketing
The Marketing-Mix Strategy therefore includes in its basic form Product, Price, Place
and Promotion (McCarthy, 1960), while in the extended 7-Ps Strategy three further
factors are added, namely People, Processes and Physical evidence. A marketer
therefore takes various success factors into consideration and merges them into a
"marketing mix". Actually it is nothing more than a list of marketing factors that need
to be considered for an almost collectively exhaustive and mutually exclusive
marketing strategy. According to Grönroos, the adding of more dimensions actually
negates the exhaustiveness of the paradigm (Grönroos, 1994).
6
Furthermore, Van Waterschoot and Van den Bulte did find evidence to support
Grönroos arguments. They found three flaws in the 4-Ps Marketing Mix Paradigm:
a) "The properties of characteristics that are the basis for classification have not
been identified"
b) "The categories are not mutually exclusive"
c) "There is a catch-all subcategory that is continually growing" (van Waterschoot
& Van den Bulte, 1992)
Further dimensions like politics, the strategic role of marketing and the aspects of
service marketing, as well as interactions in industrial networks, are not considered in
the Marketing-Mix framework (Grönroos, 1994). Grönroos also mentions the factorial
limits of the traditional marketing approach which uses basically only the Marketing-
Mix to establish a strong fit between company-brand and potential customer. The
Marketing-Mix is therefore an active approach to target influenceable aspects of an
individual (Figure 1).
He argues as early as 1994 that there must be not only a positive perception
established, but a real relationship. But a relationship consists of common interests
and maybe even a common background. He therefore defines marketing as:
"Marketing is to establish, maintain, and enhance relationships with customers and
other partners, at a profit, so that the objectives of the parties involved are met. This
is achieved by mutual exchange and fulfilment of promises." He argues further that
the fulfilment of promises is strongly related to trust (Grönroos, 1994).
A company which runs its business according to ethical norms is more likely to be
trusted than others (Castaldo, et al., 2009) or, "A merchant will do well if he has a
7
friend in every town". (Grönroos, 1994). Grönroos and Castaldo therefore refer to the
later established "Triple Bottom Line" concept
1
of J. Elkington (Elkington, 1998).
Trust is only gained by repetitive positive actions, for example treating the
stakeholder nicely or the keeping of advertised promises. Also the perceived quality
of a product is important for the image, since the customer trusts a product with the
money he spends on it. More and more customers nowadays are interested in the
sourcing of a product, the sustainability and the environmental impact. Hence, a
company has to act responsibly towards all stakeholders in order to ensure a strong
trustful relationship with the involved parties. Empirical evidence suggests that the
greater a firm's contribution to social welfare, the better the reputation (Bronn &
Vrioni, 2001). This is called Corporate Social Responsibility
2
. CSR is understood as
the wide range of methods that a company possesses to act with its stakeholders
and its environment in a sustainable way (Edacott, 2004). Nevertheless, besides the
mentioned flaws of the concept, the paradigm still persists, especially since the basic
categories also define marketing events itself. Another implication of the 4-Ps theory
is the 4-Cs theory. The 4-Cs is the opposing factor, from the point of view of a
customer: Choice, Cost, Convenience and Communication. Schullz states that a
customer rather looks for a dialogue with the brand instead of just being pushed to
purchase a product (Schullz, et al., 1993). The product itself is a very important
communication tool (El Houssi, et al., 2004). Unlike advertisements for example on
the radio, which is solely based on audio receptions, a product is something tangible.
Potential customers will always want to grab it, feel the quality, read the messages
written on it, take a product of a competitor and compare it. The stronger the
1
Elkingtons Triple-Bottom-Line states that a company which performs well not only in an economic
way, but also in a social, environmental and sustainable way, will always get financial benefits and
higher profits in return (Elkington, 1998).
2
Responsibility is defined as "the state or fact of having a duty to deal with something or having
control over someone" (Oxford University Press, 2012).
8
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9
No efforts of CSR generate benefits for a company if it is not communicated well.
Communication is the organisational counterpart of promotion (Figure 2), or in other
words: marketers want to promote, customers want to communicate. Promotion thus
simply tries to shed light on the positive success factors of a product, whereas
marketing communication tries to establish a two-way dialogue between organisation
and customer (Grönroos, 2004).
Shimp stated, based on his interviews conducted within several companies, that
marketing communication is one of the critical aspects of a company's overall
marketing performance, as well as a major determinant of the strategies' success
(Shimp, 2011). The objective of marketing communication is to create the final
intention to buy the product by provoking a certain brand association. Recent studies
show that it is the marketing communication tool which achieves this certain goal
(Adkins, 1999). The instrument is used to provoke a certain feeling within the
customer which makes him feel comfortable, responsible and satisfied when putting
the product into his basket. The aim is to create a strong fit between the brand and
the customer. This link can be supported by certain individualisations according to
the target group (Kotler & Keller, 2005). The process of creating a certain image
follows a strict sequence: creating awareness, knowledge, preference, conviction and
finally the purchase of the product (Lavidge & Steiner, 1961).
A very contemporary form of marketing communication is Cause-Related Marketing
(CRM) (Samu, 2008). This form of marketing communication addresses one specific
need of the customer, self-actualisation. It tries to link a certain cause, whether
social, environmental or other, to the customer. It therefore adds another dimension
of passively influencing the customer and of provoking a positive buying behaviour
10
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Chapte
2.1.3
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11
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12
2.2 Cause-Related Marketing
This chapter will focus on Cause Related Marketing as a marketing communication
instrument. First, the heterogeneity of definitions of CSR and the concepts used in
this field are overlapping and thus will be abstracted. (Antonio Argandona, 2009).
Several forms of CRM tools are established in the market place and influence the
consumer's attitude towards a brand or product in different ways.
2.2.1 Definitions of Cause-Related Marketing
The actual, contemporary and accepted definitions of CSR include those of Carroll
and Van Marrewijk. Each researcher used different methodologies to create his
definition.
Carroll based the definition of CSR on the definition of Bowen's book in which he
interviewed several managers in the United States (Bowen, 1953) (Carroll, 1999). As
in 1953, the environmental impact of an organisation on its environment was not part
of that time's contemporary thinking; the environmental aspect was not included
within the definition.
"The social responsibility of business encompasses the economic, legal, ethical and
discretionary expectations that society has of organisations at a given point in time."
Carroll (1999)
Van Marrewijk tried to merge philosophy altogether with up-to-date literature in order
to construct a more holistic form of definition (Marrewijk, 2003). His definition
includes Voluntariness, Stakeholders, Social, Environmental and Economic aspects
of the business. The environmental aspect is here already included.
13
The current European policy on CSR states that to fully meet their social
responsibility, enterprises...
"...should have in place a process to integrate social, environmental, ethical, and
human rights concerns into their business operations and core strategy in close
collaboration with their stakeholders." (European Commission, 2011).
Time does have an impact and there are many factors included in the contemporary
definitions. Nevertheless, it has never been mentioned that an organisation should
also aim to improve the CSR methods in the future.
Cause-Related Marketing is defined as a process that "formulates and implements
marketing activities that are characterised by an offer from the firm to contribute a
specified amount to a designated cause when consumers engage in revenue-
providing exchanges that satisfy organisational and individual objectives"
(Varadarajan, et al., 1988). The recipient of the donation is mostly a non-
governmental organisation (NGO) which serves a well-known and popular cause,
locally or global. Hence, an NGO and a profit-oriented organisation form a symbiotic
relationship. The NGO will be provided with financial or other help, whereas the
profit-oriented organisation benefits from being related to the NGO. From a company
point of view, CRM is solely used to generate awareness with "relating" the brand to
an ethical cause. Creating a positive attitude towards the cause is therefore a side
product (Berglind & Nakata, 2005).
However, the definition of Menon and Varadarajan (1988) is limited. It excludes every
non-transaction-based contribution from CRM. Sue Adkins argues in her 1999 book
"Cause-related marketing: who cares wins", that Varadarajan and Menon's definition
is only a small aspect of CRM. Adkins explains that CRM establishes a win-win
situation between a profit-oriented organisation and a non-profit organisation.
14
2.2.2
Many
reputat
world i
seek a
on. The
strong
2007).
Market
influenc
opinion
Concept
internation
tion and h
s flooded
long-term
e ethical p
fit through
Thus, c
ting react
cing them
n of the cus
Fi
ts of Cau
nal organ
ence their
with adve
relationsh
perception
h a cause
contrary to
ts onto th
. This ma
stomer (Fig
igure 4 - Co
use-Relat
nisations a
r profitabili
ertisements
hip with the
of causes
helps crea
o the tra
he percep
kes CRM
gure 4).
ontemporary
ted Mark
agree tha
ity in a po
s, innovat
e customer
is unlikely
ate such a
aditional m
ptions of
a reactive
y Marketing
keting
at CRM c
ositive way
ions and
r to find a c
y to diminis
long-term
marketing
causes o
e approac
Approach (
campaigns
y (Mullen,
brands, co
constant fa
sh or chan
m relationsh
approach
of custom
ch towards
Siebert, 201
s influenc
1997). W
ompanies
actor they c
nge, so cre
hip (Peters
h, Cause-
mers, rathe
s a non-inf
12)
ce their
While the
start to
can rely
eating a
s, et al.,
Related
er than
fluential
15
After a profit-oriented corporation has teamed up with an NGO of their choice, a win-
win-win situation can be established. The consumer does not only consume in a
selfish manner, the NGO profits from more donations and the corporation gains
reputation (Andreasen, 1996).
Berglind and Nakata, on the other hand, found that a huge part of CRM campaigns
are actually not what they seem to be. They base their findings on the watchdog
group "Think Before You Pink" (TBYP) (Think Before You Pink, 2012) and criticise
several CRM campaigns of multiple companies. TBYP asks the same questions
customers would ask and hence conclude on their findings. According to Berglind
and Nakata, most of the CRM campaigns are nothing but "[...] a clever manipulation
to enrich a corporation's coffers". They point out the Yoplait Inc. (Yogurt) campaign
"Save Lids to Save Lives":
"A woman would have to eat three containers of Yoplait every day during the four-
month campaign to raise $36 for the cause [...]" (Think Before You Pink, 2012).
CRM campaigns thus have to be seen from a critical vantage point. The following
paragraph abstracts related concepts to provide a clear understanding of CRM
(Figure 5).
Social Marketing is regarded as the sum of marketing instruments which are used to
reach social objectives (e.g. Marketing-Mix). Usually used by non-governmental
organisations or social departments of profit-oriented organisations (Business
Dictionary, 2012).
Corporate Philanthropy, rarely called "strategic philanthropy", relates to all good
deeds of a company towards a cause. As Porter states, it is not always an altruistic
approach and widely used as a tool to reach corporate objectives (Porter & Kramer,
2002).
16
Spons
activity
that ac
for bot
Footba
their cu
Cause
directly
Adverti
Public
orship is,
y, in return
ctivity" (Cor
h sides an
all is a pro
ustomers a
Figure 5
-Related M
y related to
ising:
Relations:
as Cornw
for acces
rnwell, et a
n anticipat
ofit-oriented
and clients
- Profit-Cau
Marketing
o the traditi
A compan
organisati
communic
Nobel lau
publicity o
A compan
partnershi
well and Co
ss to the e
al., 2008).
ted busine
d organisa
in exchan
use relation
g can be c
onal marke
ny aligns
on (NPO
cate the c
ureate Aun
on Europea
ny uses pr
ip with an
oote state,
exploitable
This is no
ess enable
ation which
ge for a m
of popular C
carried out
eting appro
itself with
O) and
cause's me
ng San S
an TV (Far
ress and p
n NPO. K
"an invest
commerci
ot an altruis
er. The FIF
h provides
ostly mone
CSR instrum
in many w
oach:
a fitting c
uses its
essage. Fi
Suu Kyi a
rsetta, 2009
public atte
rombacher
tment, in c
ial potentia
stic relatio
FA World
s its spons
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ments (Sieb
ways. The
cause of a
own ad
iat adverti
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9).
ention to c
r beer eng
cash or kin
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Champion
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saction.
bert, 2012)
e first four
a fitting no
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tively in
17
press conferences and in congresses in Germany to advertise their
own foundation to preserve the rainforest (Krombacher GmbH,
2012).
Sponsorship:
A business helps a particular programme or event. Hoffmann-La-
Roche Ltd. sponsors AIDS-walks worldwide and doubles up the
donations gathered by employees (Hoffmann-La-Roche Ltd., 2012).
Microsoft and its former CEO and philanthropist Bill supports any
NGOs which fulfil certain requirements with free software solutions
(Microsoft Corporation, 2012).
Licensing:
A business or organisation pays licensing fees to an NPO to use
their logo on their advertisements or products. Spanish football
team F.C. Barcelona used to pay 1.5 million to UNICEF to wear
their logo on their jersey (Alonso, 2012).
Co-branding:
Corporation and NPO try to raise funds together to build brand
awareness. Coca-Cola Ltd. uses the WWF logo on its products
(WWF Canada, 2011).
Facilitated Giving:An organisation facilitates customer donations to causes. TESCO
Plc. provides donation boxes where people can donate their change
(TESCO Plc, 2012).
Purchase-Triggered Donations: A transaction-triggered donation takes place if a
customer uses his credit-card or buys a product. Whenever a user
of American Express uses his credit card, a donation will be
transferred to one of the card owner's pre-selected causes
(American Express, 2012).
18
2.2.3 Benefits and Risks of Cause Related Marketing
Profit oriented organisations have a reason to engage in Cause-Related Marketing.
They benefit from an improved employee productivity and enhanced employee
morale and loyalty. As already mentioned it helps to boost the company's public
image and distinguishes it from competitors. And finally, Cause Related Marketing
can directly enhance sponsored sales and the brand (Till & Nowak, 2000).
On the other hand, a company is forced to take risks when engaging in CRM.
Evidence points out the difficulty of overcoming impediments while trying to merge
social and commercial objectives (Polonsky, 2001). Roy William John Edacott (2004)
found that citizens of different countries respond differently to the same cause.
Hence, the cultural background of the targeted group, as well as the right fit between
corporation, cause and the customer, can be obstacles and failure in one factor
potentially leads to failure of the whole campaign (Deborah J. Webb, 1998).
Cause-Related Marketing only works if the customer perceives the connection
between cause and company as trustworthy. He therefore will evaluate the fit by
comparing the image of the company and the cause provided by the NPO. If a strong
fit is given, the customer then might choose the product. If he perceives the
combination as a weak fit, and thinks the company is exploiting the good cause for
marketing and profit purposes, he might develops a negative attitude towards the
brand (Meffert & Holzberg, 2009). A pharmaceutical company can hardly support a
cause against animals being used in experiments. But the company might teams up
with a cause that supports disabled children.
Evidence found showed that the attitude towards PepsiCo worsened in Spain after
being acquainted with the contents of a cause marketing campaign. PepsiCo
19
teamed-up with Médicos sin Fronteras (MSF)
3
. PepsiCo offered to donate 1% of its
net sales of one month to MSF, sent out flyers and Christmas cards, founded an
activist group and told its employees to spread the word. The campaign backfired
since Spanish customers felt over-customisation and perceived the slogan "1%
RIGHT NOW" would be a sidekick to the 0.7% Platform
4
(García, et al., 2003).
The corporation must also be aware that CRM is a long-term strategy and it can be
costly in terms of negative publicity and image damage if it pulls out of the
partnership too early (King, 2004). Hence, a strong fit between the business of the
company and the cause of the NPO must be given.
The synthesis of this chapter shows the interlink-age of several terms that play a role
in a successful CRM campaign. If one of the terms is less taken care of, the failure of
the campaign is almost inevitable.
Figure 6
shows the important factors of an effective
CRM strategy as mentioned in this chapter: Culture, Company, Cause and
Customer.
2.2.4 Summary Cause-Related Marketing
The definitions of cause-related marketing show how the topic evolved over recent
years. New approaches of CRM have been included within the definition and show
that more tools are used to approach customers. These instruments are advertising,
PR, sponsorship, licensing, co-branding, facilitated giving and transaction-based
donations. But besides the estimated benefits like customer loyalty and increased
sales, a company must be aware of the inherited risks. Since CRM is a very new
approach, not all negative aspects have been discovered yet. On the other hand, we
3
MSF is the Spanish subdivision of Médecins Sans Frontiéres (Doctors Without Borders). The
organisation provides medical assistance to poverty stricken regions (Médecins Sans Frontiéres,
2012).
4
"The so-called 0.7 question is a much extended grievance within the non-profit organisations in
Spain. It demands that the Public Administration sets aside 0.7% of its overall budget to support
development-related projects in Third-World countries." (García, et al., 2003)
20
have not mentioned the "feel" that customers can emphasise towards a cause they
like to support (Steve Worthington, 1998). A major flaw is the impact of the cultural
background on the buying behaviour and perception of causes by the customer. The
next chapter will shed more light on the decision process and the impact of culture.
Figure 6 - Influential factors of a CRM campaign (5 C's) (Siebert, 2012)
2.3 Cause Affinity
A customer goes through a decision-making process before he chooses a certain
product. Within the different stages in this process he evaluates all sorts of
connections between brand, image, quality and so on. The customers therefore will
also analyse the fit of a company and its cause. Also, a good cause is also not
always a good cause, since in certain regions a cause might have less or even a
Campaign
Culture
Company
Customer
Cause
21
negative impact on the majority of people. This chapter will analyse the most
important steps within the decision-making process and analyse the cultural influence
on the perception of a brand. The attitude and perception of a cause is called "Cause
Affinity" (CA). In this chapter we will first analyse customer behaviour and then turn to
Cause Affinity.
2.3.1 Customer Behaviour
A customer entering a store undergoes a certain process in which he evaluates
certain aspects to find the most fitting product with the highest value added. The
different behaviour towards the products is categorised into four different customer
types:
Rational customer: Gathers information before acquiring the product
Unconscious customer: Already has an affinity towards a brand or product
(e.g. favourite car brand)
Learned customer: Decisions are based on habits (e. g. cigarette brands)
Social consumer: Considers social issues like status, lifestyle and beliefs
(fashion brand) (Hamlin & Wilson, 2004)
Hamlin states that the customers, according to their type, allow causes to influence
their decision to different extents. The rational customer perceives brands as luxury
goods and a certain cause is not a trigger at all. It therefore would not prevent the
buyer from switching to another brand/product. The unconscious and conditioned
(learned) customer is not influenced by causes since his decision is made before he
enters the store (Hamlin & Wilson, 2004). This leaves the social consumer as the
only option which can be influenced by a cause. The social consumer is status
focused and his lifestyle is a predominant trigger. The social consumer engages
strongly in self actualisation and is ready to pay a premium price for the product of
22
his choice. Not only cause-marketed products are considered a lifestyle product, but
also premium-priced Apple Inc. products (Figure 3) (Yalch & Brunel, 1996).
Abraham Maslow, one of the most important researchers in the field of humanistic
psychology, created a ranking of human needs based on the importance of fulfilling
these needs (Figure 7) (Maslow, 1943). According to Maslow, self-actualisation is the
least important need of a human being. Only if all other basic needs are fulfilled, does
self-actualisation gain importance. Hence, time for social engagement and the right
spending power are necessary. Without the financial background to pay a premium
price for lifestyle, CRM products rely solely on the idealism of a few. This assumption
is supported by a surveys conducted in the U.S., U.K. and Germany in 1980 which
shows that self-actualisation has increased as a result of economic prosperity
(Plummer, 1989). Generally speaking, CRM is more profitable in wealthier regions,
since enough spending power is available.
23
Figure 7 - Maslow's Pyramid of Needs (Maslow, 1943)
Maslow's theory is based on the western, capitalistic culture. Regions with different
needs and values embedded in their culture do perceive self-actualisation differently.
Nevis found that self-actualisation in China is by far not as important as it is in the
western hemisphere. The theory of Maslow therefore shows limit of the pyramid and
has to be used with caution (Nevis, 1983). Since it fits in the regional background of
this work, the pyramid of needs is considered appropriate.
Finally, the available spending power does not yet determine the affinity toward a
certain cause.
Self
Actualization
Self Esteem
Sense of Belonging
Safety Needs
Physiological Needs
24
2.3.2 Definitions of Cause Affinity
The Oxford Dictionary defines "affinity" as "a natural liking for and understanding of
someone or something" (Oxford Dictionaries, 2012). Exchanging "someone or
something" with "cause" directly hands the definition of CA.
2.3.3 Concepts of Cause Affinity
Cause affinity was first mentioned when American Express and the World Wildlife
Fund (WWF) teamed up and announced a WWF "affinity card" (Aster Mekonnen,
2008).
The natural liking for a cause can be influenced by two factors.
The personal and family background of a person
The cultural background of a person
Personality is defined as "the combination of characteristics or qualities that form an
individual's distinctive character" (Oxford Dictionaries, 2012). Finding out all the
possible combinations of all characteristics for each potential individual is not
efficient.
Undifferentiated marketing
5
focuses on the broadest and best analysed target group
to create a dialogue with as many people as possible (Brooksbank, 1999). Too many
unknown variables are given which finally shape the personal perception of a cause.
This leaves companies with evaluating and researching the cultural backgrounds.
The cultural perception of a region is much easier to predict than the personal affinity.
Culture is defined as "the ideas, customs, and social behaviour of a particular people
or society" (Oxford Dictionaries, 2012). Companies therefore focus on analysing the
5
"Sales-growth strategy, that ignores market segment differences and attempts to appeal to all
prospective customers with a single, basic product line through mass advertising and distribution"
(Business Dictionary, 2012).
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Details
- Pages
- Type of Edition
- Erstausgabe
- Year
- 2014
- ISBN (eBook)
- 9783954897148
- ISBN (Softcover)
- 9783954892143
- File size
- 3.3 MB
- Language
- English
- Publication date
- 2014 (February)
- Keywords
- marketing donation cause related marketing Germany direct donations
