The Effect of Corporate Societal Marketing on Consumer Attitudes: A Comparison of Strategies. Kate Westberg, RMIT University.

Transcription

1 The Effect of Corporate Societal Marketing on Consumer Attitudes: A Comparison of Strategies Kate Westberg, RMIT University Abstract Corporate societal marketing refers to marketing strategies that encompass at least one social objective. Increased consumer pressure on companies to behave more responsibly combined with the competitive challenge of brand differentiation a brand through meaningful engagement has stimulated interest in activities such as cause-related marketing (CRM). Despite an increasing focus on CRM in the academic literature, there is a limited understanding of how a CRM strategy compares to other traditional or societal marketing strategies. This paper presents the results of a study that uses an experimental design to compare the impact of CRM, sponsorship and sales promotion on consumer attitudes. The findings indicate that, when controlling for existing brand attitude and perception of fit, consumers have a more positive attitude to CRM and that CRM can elicit a more favourable change in brand attitude. Background Corporate societal marketing has been described as encompassing marketing initiatives that have a least one noneconomic objective related to social welfare and use the resources of the company and/or one of its partners (Drumwright and Murphy, 2001, p.164). Corporate societal marketing includes activities such as philanthropy, sponsorship, advertising with a social dimension, licensing agreements, social alliances, volunteerism, and cause-related marketing (CRM). Marketing strategies involving a social partner are generating increasing interest as companies seek to differentiate their brands and respond to consumer pressure for social responsibility. In Australia, research suggests that the majority of people do not trust big companies and perceive them to be unethical (Grey Worldwide, 2006). Further, there is growing evidence to suggest that consumers are willing to use their purchasing power to reward or punish companies based on their social responsibility (Creyer, 1997; Sen and Bhattacharya, 2001; Sen and Morwitz, 1996). CRM is a marketing activity generally involving a corporate donation to a nonprofit organisation contingent upon the consumer s purchase of a nominated product (Varadarajan and Menon, 1988). When CRM is effectively implemented, it allows greater brand differentiation and facilitates consumer engagement at an emotional level. Corporate societal marketing can be effective in developing positive associations for the brand and building brand equity (Hoeffler and Keller, 2002). Participating in such an activity also positions the firm as being community-oriented or socially responsible. Despite the corporate and consumer interest in CRM, academic research into consumer attitudes and responses to the strategy is at an early stage (Barone, Miyazaki and Taylor, 2000; Varadarajan and Menon, 1988; Webb and Mohr, 1998). Minimal research has been undertaken to date that compares the effectiveness of CRM to other marketing strategies. This is particularly important as the benefits of CRM may also be tempered by the risk of

2 negative publicity and perceived exploitation of the nonprofit organisation by consumers (Varadarajan and Menon, 1988). Purpose of the research The purpose of this study is to contribute to the body of research in the area of CRM and to enhance the understanding of the factors that influence consumer response. In particular, this research explores consumer attitudes toward CRM as well as the effectiveness of CRM on changing attitude to the brand. More importantly, this study compares consumer response to CRM with another corporate societal marketing activity, sponsorship, as well as a more conventional marketing activity, sales promotion. The above three activities are distinct strategies even though CRM has often been compared to, and even referred to as a form of sponsorship or sales promotion (e.g. Duncan, 2002; Shimp, 2003; Smith and Alcorn, 1991). CRM provides a contribution to a cause as a result of a specified customer-firm revenue producing exchange (Varadarajan and Menon, 1988). With sponsorship, the contribution precedes the generation of sales revenue and is undertaken in anticipation of such an outcome. Sales promotion is also distinct from CRM. Incentives used in sales promotions generally relate to a tangible utilitarian benefit for the consumer. CRM, conversely, does not necessarily offer a personal benefit to the consumer, but instead provides a benefit to a third party. As with many marketing strategies, one of the key objectives for CRM programs is to generate a positive attitude to the brand (Bennett, 1998; Cunningham, 1997; File and Prince, 1998; Wagner and Thompson, 1994). Brand attitude can form the basis for consumer behaviour and is determined by the importance and relevance of the brand s attributes and benefits (Keller, 1993). As such, marketers need to engage in activities that will create favourable attitudes to the brand. In addition, the success of a particular communication in favourably influencing brand attitude can be affected by the consumer s attitude to the communication itself (Lafferty and Goldsmith, 1999; Miniard, Bhatla and Rose, 1990; Mitchell and Olson, 1981). Given the consumer interest and support for societal marketing activities, it is likely that they will have more favourable attitudes toward those strategies (Hoeffler and Keller, 2002). Further, as CRM actively engages the consumer in terms of giving them an active involvement in the societal marketing strategy, it is likely that CRM will be more highly regarded than other societal marketing strategies. The following hypotheses are proposed: H 1 H 2 Consumers will have a more positive attitude toward a CRM strategy than they will to a sponsorship or sales promotion. The change in brand attitude experienced by consumers will be more positive as a result of exposure to a CRM strategy than exposure to sponsorship or sales promotion. One of the critical success factors proposed by practitioners for the success of a CRM strategy is the strategic fit between the cause and the brand (e.g. Adkins, 1999; DeNitto, 1989; Higgins, 2002; Lewis, 2003). That is, the consumer should perceive an affinity between the selected cause and the product. The importance of perceived fit, however, has been subject to some debate. Research has also found that the most effective cause used in a CRM campaign was one not normally associated with the organisation (Mizerski, Mizerski and Sadler, 2001). Conversely, studies are beginning to emerge which suggest that consumers perceived affinity

3 between the cause and brand is a significant contributor to the success of a CRM strategy (Hamlin and Wilson, 2004; Lafferty, Goldsmith and Hult, 2004; Pracejus and Olsen, 2004). Given the inconclusive nature of the research in the area, the construct of perceived fit will be controlled for in the analyses. Finally, consumer perceptions of the motivations of the company or brand have been found to impact on the response to CRM (Barone et al., 2000; Webb and Mohr, 1998). Research into pro-social consumer influence strategies, such as environmental and cause-related campaigns, also emphasise the pivotal role of consumer trust in the effectiveness of these strategies (Osterhus, 1997). Therefore the consumer s existing attitude to the brand is likely to affect their attitude toward a brand s marketing strategy. A similar issue has been explored in relation to sponsorship and the findings suggest that the effect of sponsorship may be mitigated by the company s image prior to the sponsorship (Javalgi et al., 1994). Again, given the potential for a consumer s existing attitude to the brand to affect their attitude to the strategy, this construct will also be controlled for in the analyses. Method This study used an experimental design as this design lends itself to establishing causal relationships (Hoyle, Harris and Judd, 2002; Tabachnick and Fidell, 2001). A convenience sample of 200 Australian students was used resulting in 170 completed self-administered surveys. Analysis of cases with missing values revealed no obvious pattern so they were deleted, leaving 135 useable cases (or 80 percent of the original 170 surveys). Subjects were randomly assigned to either one of three treatment groups (CRM, sponsorship or sales promotion) or a control group. A pre-test was incorporated for all groups. The pre-test established basic demographic information and pre-existing attitude to the brand. A pre-test allows for a more precise measure of the effect of the treatment (Christensen, 1994; Hoyle et al., 2002). Adequate time was allowed to elapse between the pre-test and post-test exposures to minimize the potential for bias (Christensen, 1994). Question ordering was manipulated to ensure maximum distance between scales that were repeated in the post-test. In the post-test, treatment groups were then exposed to the stimulus and all groups completed a second selfadministered survey. The stimulus was presented in the form of a brief description of the CRM strategy, the sponsorship or the sales promotion at the beginning of the post-test survey. The control group did not receive the stimulus. The independent variable was group membership. A familiar and heavily used product category was chosen to maximise the data. A review revealed CRM campaigns for fastmoving consumer goods are the most prevalent. This category was also one of the first to explore and benefit from CRM strategies (DeNitto, 1989). Prior research suggests that this strategy can be effective in a parity market (Barone et al., 2000). Therefore, the selected product was a soft drink in common use in Australia: Schweppes Lemonade. The selected cause was homeless youth shelters. Given the target market for Schweppes Lemonade, varying perceptions of fit between the brand and the cause were anticipated. In addition, it had to be reasonable to consumers that the product category would be likely to use the strategies of CRM, sponsorship and sales promotion. A sport sponsorship (Brisbane Lions AFL team) was selected given the sizable investment in Australia in sport sponsorship as opposed to the Arts. A discount sales promotion was also used.

4 Existing scales were used to measure the dependent variables and covariate. The attitude toward the strategy scale was constructed based on a modification of an existing scale used to measure attitude toward a marketing offer (Burton and Lichtenstein, 1988; Lichtenstein and Bearden, 1989). The attitude toward the brand scale developed by Batra and Ahtola, 1988 was also used. This scale measures the pleasure-related aspects of a consumer s attitude toward a product. Change in brand attitude was measured by taking the difference between the pre-treatment and post-treatment measure. Perceived fit was measured by adapting the Keller and Aaker (1992) scale developed to measure the fit of a proposed brand extension. All scales were operationalised using a semantic differential. The data were then analysed using analysis of variance (ANOVA) and analysis of covariance (ANCOVA) in SPSS 12. Major findings and implications Preliminary analyses were undertaken to confirm construct reliability and validity. The composite reliabilities (Werts, Linn, and Jöreskog, 1974; Werts, Rock, Linn and Jöreskog, 1978) ranged between.945 for perception of fit and.966 for existing brand attitude. All reliabilities were above the usual guidelines of 0.60 (Bagozzi and Yi, 1988) and (Barclay, Higgins and Thompson, 1995; Chin, 1998). The Average Variance Extracted (AVE) was also calculated and ranged between.751 for post treatment brand attitude and.852 for perception of fit. AVE should be greater than 0.50 (Fornell and Larcker, 1981). Discriminant validity is satisfied if the AVEs (Fornell and Larcker, 1981) for the constructs are greater than the square of the correlations among the constructs (Chin, 1998). Convergent and discriminant validity was demonstrated. In terms of attitude to the strategy, the group means on a 7 point scale were as follows: CRM 5.28, sponsorship 4.61 and sales promotion The results of an ANOVA indicate that there is not a significant difference between the groups (F=2.93, df=2, p=.06). However, further investigation was undertaken, using an ANCOVA, to control for pre-existing attitude to the brand as well as the perception of fit between the brand and the cause, the brand and the sport and the brand and the type of sales promotion. The results indicate a significant difference between groups (F= 7.78, df=2, p<.05) and the adjusted r 2 suggests that, when controlling for the aforementioned covariates, group membership accounts for 50% of the difference in attitude to the offer. Pairwise comparisons revealed a significant difference between the CRM group and the sponsorship group (p=.00), as well as the CRM and sales promotion groups (p=.00), but no significant difference between the sales promotion and sponsorship groups (p=.39). When controlling for the covariates, hypothesis 1 is supported. The group means for change in brand attitude indicate that only the group exposed to a CRM strategy experienced a positive change in brand attitude as follows: control -.55, CRM.17, sponsorship -.05, sales promotion The results of an ANOVA indicate that group membership had a significant main effect on attitude change (F=11.36, df=3, p<.05). Further examination using pairwise comparisons showed that there was a significant difference between the control group and each of the three treatment groups, in terms of attitude change. However, the comparisons did not indicate a significant difference between any of the three treatment groups. Further investigation was undertaken using an ANCOVA to control for perceived fit. The results indicate a significant difference between groups (F= 4.14, df=2, p<.05) but the adjusted r 2 suggests that, when controlling for the perceived fit, group membership accounts for only 7% of the difference in change in brand attitude. Pairwise comparisons revealed a significant difference between the CRM group and the sponsorship

5 group (p=.04), as well as the CRM and sales promotion groups (p=.01), but no significant difference between the sales promotion and sponsorship groups (p=.40). When controlling for perceived fit, hypothesis 2 is supported. These findings contribute to a developing body of research regarding the role of perceived fit on the effectiveness of CRM and comparing CRM to other strategies. When controlling for perceived fit and existing brand attitude, CRM can generate a more positive attitude to the strategy. Again, when controlling for perceived fit, CRM can generate a more favourable change in brand attitude than the other two strategies examined. The importance of perceived fit as well as existing brand attitude may be partially explained by attribution theory (Kelley, 1973; Kelley and Michela, 1980). That is, consumers will question why the firm is participating in a CRM campaign. A logical association between the business and nonprofit brands can reduce the chance of the alliance being regarded with scepticism (Webb and Mohr, 1998). If consumers perceive the firm s motivations positively, that attribution may then favourably affect their attitude to the brand. The sponsorship literature also suggests that an appropriate match between sponsor and event is a critical aspect (e.g., Crimmins and Horn, 1996; Speed and Thompson, 2000). It is interesting to note that the current study indicates that this perception of fit is even more important for CRM than for sponsorship. A plausible explanation may be that a logical association between firm and social cause is more important due to the perceived vulnerability of the nonprofit and thus the potential for it to be exploited. Furthermore, this study indicated that a CRM strategy was more effective than sponsorship (and sales promotion) at generating a positive attitude to the strategy as well as a more positive change in brand attitude. Hoeffler and Keller (2002) suggest that corporate societal marketing, which includes both CRM and sponsorship, can be effective in developing positive associations for the brand and building brand equity, but CRM activities are particularly useful for actively involving the customer with the brand. This study highlights the importance of choosing the appropriate cause to partner with, as this association can ultimately impact on the ability of this strategy to positively influence brand attitude. It is suggested that marketers undertake research to determine consumer perceptions of an appropriate match between the organisation or brand and potential nonprofit partner. Furthermore, marketers should consider communicating the commonalities between the two parties instead of relying on the consumer to make the connection. The brand extension literature also advocates the importance of an effective communications strategy in creating links between two entities in the mind of the consumer (Bridges et al., 2000; Keller, 1993). In conclusion, this research is one of the first studies to measure brand attitude change, as opposed to simply attitude. Further, these findings provide support for perceptions held by many academics and practitioners that a strategic fit between the firm and the cause is critical to the success of CRM and contributes to the emerging research in this area. Finally, this study has also compared CRM with another corporate societal marketing activity, sponsorship, as well as a conventional marketing activity, sales promotion. There are a number of limitations associated with this study. This research focused on one brand within one fast-moving consumer goods product category. Future research should include other categories. Additional research should further examine the impact of fit by choosing products and causes with differing perceptions of fit.

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