Examining the Impact of Life Satisfaction and Time Pressure on Consumers Reponses towards Cause-Related Marketing Promotions

Transcription

1 2010 年 5 月 第 13 卷 2 期 Vol. 13, No. 2, May 2010 Examining the Impact of Life Satisfaction and Time Pressure on Consumers Reponses towards Cause-Related Marketing Promotions

2 Web Journal of Chinese Management Review Vol 13 No 2 1 Examining the Impact of Life Satisfaction and Time Pressure on Consumers Reponses towards Cause-Related Marketing Promotions Ka-shing Woo Bobbie Chan Abstract Cause-Related Marketing (or CRM in short) has been widely used by for-profit organizations to link up sales with charitable donations since the early 1980s. Past studies were undertaken to investigate the fit between the firm and the cause, cause familiarity and nature, donation quantifier, and message framing. However, very limited studies were on consumer s psychological traits. The objective of this study is to enrich the extant CRM literature by examining the impact of consumers life satisfaction and their susceptibility to time pressure on their responses to CRM promotions. Through a questionnaire survey in China, the study confirms the positive moderation effect of life satisfaction and the negative moderation effect of time pressure on consumer responses towards CRM promotions. Results are then explicated before drawing a conclusion of this study. Ka-shing Woo, Lee Shau Kee School of Business and Administration, The Open University of Hong Kong Bobbie Chan, Lee Shau Kee School of Business and Administration, The Open University of Hong Kong

3 Web Journal of Chinese Management Review Vol 13 No 2 2 Introduction Theory and research evidence suggest that a for-profit corporation s socially responsible initiatives (or CSR in short) can positively affect consumers attitude towards that corporation and such initiatives include corporate philanthropy, cause-related marketing (or CRM in short), advocacy advertising, alliances with nonprofit organization, socially responsible employment and manufacturing practices, and employee volunteerism in community activities (Lichtenstein et al., 2004; Menon & Kahn, 2003). Unlike other CSR initiatives, CRM is used by firms to link up sales directly with charitable donations. A simple and clear distinction among these CSR initiatives is offered by Polonsky & Wood (2001) who highlight the fact that CRM is a post-purchase giving (i.e., after the sale has been made), whereas sponsorship is given pre-purchase (i.e., no sale is necessary for giving to take place), and corporate philanthropy is totally unrelated to sales. Given its direct impact on sales, CRM has been widely used by for-profit organizations to weather the competitive storm in acquiring and retaining customers since the early 1980s. The history of CRM can be traced back to 1983 when American Express launched a promotional campaign for donating US$1 for each new card issued and a penny for each use of its charge card to support the renovation of the Statue of Liberty. Since then, different forms of sales-based CRM campaigns have proliferated across different parts of the world to tap the hidden advantages of CRM, including employee loyalty, customer acceptance of price increases, favorable publicity, and reshaping market segmentation strategy. Continuing its phenomenal growth in the West, CRM strategy mushroomed in Asia in recent years following some significant events, including the 2004 devastating tsunamis in the Indian Ocean, the 2007 Special Olympics in Shanghai, the 2008 Sichuan earthquake in China wiping out the entire province and villages nearby, and the 2008 Olympics in Beijing. Many companies tapped into these events to link up their sales tactics with donations. For example, a Hong Kong touring company donated HK$99 for every customer to Hong Kong Red Cross for the tsunami victims. A Chinese herbal company donated 5% of its sales to the relief works following the Sichuan earthquake. Due to the phenomenal growth in popularity of CRM campaigns, research studies were undertaken to uncover the factors affecting CRM effectiveness, including the fit between the brand and the cause (Pracejus & Olsen, 2004), cause familiarity (Lafferty & Goldsmith, 2005) and proximity (Ellen et al., 2000), product type (Strahilevitz & Myers, 1998), donation quantifier (Pracejus et al., 2003), and message appeal (Brunel & Nelson, 2000; Grau & Folse, 2007). However, very limited studies were on consumer s psychological traits that affect consumer involvement in CRM campaigns. Therefore, in

4 Web Journal of Chinese Management Review Vol 13 No 2 3 response to the study by Grau & Folse (2007) who call for further research on consumer traits, the objective of this study is to examine two particular consumer psychological traits (i.e., life satisfaction and susceptibility to time pressure) from the literature of prosocial behaviour and their impact on consumer responses to CRM campaigns. The research in these two psychological traits also signifies managerial implications when structuring message appeal and selecting media choices for message dissemination. The following sections will review the literature on CRM and the two above-mentioned consumer characteristics before developing related research hypotheses. Research methodology, results, and discussion are then described before drawing a conclusion of this study. Literature Review and Research Hypotheses Cause-Related Marketing and Consumer Responses In the extant marketing literature, CRM is defined as the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives (Varadarajan & Menon, 1988). Despite the fact that CRM represents a win-win-win scenario for the causes to obtain donation, for the for-profit organizations to generate more sales, and for the consumers who see themselves making contributions to the society, it is not without potential concerns of over-commercialization of CRMs when they are associated with merging social and corporate objectives. These concerns include exaggerated perception of corporate generosity, shifting in giving from worthy groups to more marketable causes, tarnishing the cause s image, potential shift in emphasis to keep corporate donors happy, and the causes competing among themselves (Polonsky & Wood, 2001). However, these concerns of over-commercialization are not fully addressed in past research studies. As shown in Table 1, research studies were undertaken in the last two decades largely to uncover the factors affecting the effectiveness of CRM in terms of consumer responses. Some are related to the message appeal in terms of the wording of donation quantifier (Pracejus et al., 2003) and positive message framing vs negative message framing (Grau & Folse, 2007). Some are related to the for-profit organizations/causes involved in CRM in terms of the reputation of the for-profit organizations (Dean, 2003), the nature of the causes (Ellen et al., 2000; Grau & Folse, 2007), and the nature of the products involved (Strahilevitz & Myers, 1998). Other than the gender of the consumers (Brunel & Nelson, 2000; Ross et al., 1992), other consumer-related characteristics are however scarcely addressed.

5 Web Journal of Chinese Management Review Vol 13 No 2 4 Table 1: Selected Empirical Studies of CRM Researchers Findings Consumer-related Brunel & Nelson (2000) Women are found to respond more favorably to the help-others (empathetic) appeal and males to the help-self (egoistic) appeal. Ross & Patterson (1992) Women are found to have a significantly more positively attitude towards the firm and the cause that use CRM than men. Message-related Ellen et al. (2000) Consumers tend to evaluate CRM offer more positively when the for-profit organization is perceived as expending more, rather than less, effort in its CRM implementation. Grau & Folse (2007) To those less involved consumers, positive message framing (e.g., emphasizing on survival rate, rather than death rate) affects the perceived value of the campaign. Menon & Kahn (2003) It was found that CRM promotions may yield higher ratings of corporate social responsibility than advocacy advertising because consumers elaborate more about the possible motives behind advocacy advertising than CRM. Pracejus et al. (2003) It was found that (1) slight variations in abstract wording (e.g., a portion of sales) leads to considerable differences in consumers estimates of the amount being donated, and (2) the donation amount can impact choice. Organizational/Brand/Product-related Dean (2004) For-profit organizations with good reputation for social responsibility have little to gain in CRM campaigns. But for-profit organization with a bad reputation may significantly increase their favor with consumers by engaging in CRM campaigns. Ellen et al. (2000) Consumers tend to evaluate CRM offer more positively when it supports a disaster rather than an ongoing cause. Grau & Folse (2007) To those less involved consumers, local causes, as opposed to national causes, yield more positive evaluation, Strahilevitz & Myers (1998) Charity incentives are more effective with frivolous products (e.g., ice-cream) than with practical products (e.g., laundry detergent) because frivolous products are more likely to create guilt.

6 Web Journal of Chinese Management Review Vol 13 No 2 5 Based on the past research findings as indicated in Table 1, in general, consumers tend to be positive towards the for-profit organizations that support worthy causes, in particular when the causes match the core business domain of these for-profit organizations. For example, Pracejus & Olsen (2004) found that donation to a high fit alliance between brand and charity can result in five to 10 times the value of donation to a low fit alliance. Barone et al. (2000) also identified that under the conditions of inter-brand homogeneity, the choice probabilities for a brand improve when the brand supports a cause. Therefore, the following core hypothesis is proposed: H1: Attitude towards the company supporting CRM is positively related to behavioral intention. In the sections that follow, the two psychological traits of consumer (i.e., life satisfaction and susceptibility to time pressure) will be examined by cross-fertilizing with the literature of prosocial behavior. Mood and Life Satisfaction In a marketing context, mood state refers to how consumers feel at a particular moment in time (Gardner, 1985) and the attitude that is formed towards a particular product and/or organization depend on the mood state that consumers have at the time of attitude formation (Barone et al., 2000). It is generally supported that consumers will evaluate products more favorably when they are in good mood than when they are not (e.g., Miniard et al., 1992). It is very likely that this good mood effect will enhance the empathetic concerns of consumers when they are asked for help and support in CRM campaigns. In the literature of prosocial behavior, there is considerable evidence supporting the notion that people are more willing to offer help when they are in good mood (e.g., Baron, 1997). Helping in return prolongs the good mood effect in that the helper feels more cheerful and less nervous than those who do not offer any help (Williamson & Clark, 1992). Good mood seems to make people generally more sensitive to others needs. However, there is an important limitation to the feel-good, do-good hypothesis because the effect of positive moods can be very short-lived and such a mood state is often measured at a particular point in time (Peterson & Sauber, 1983). It poses marketing problems because at the time of CRM campaign, marketers may not be able to get hold of the mood state of their target consumers. Therefore, an alternative ought to be sought. Similar to mood state, a more stable measure of subjective well-being is life satisfaction. Researchers found that life satisfaction tends to relate positively to measures of extraversion, interest in other people, and active involvement, optimism (e.g., Costa & McCrae, 1980; Emmons & Diener, 1985). It is expected consumers with a high degree

7 Web Journal of Chinese Management Review Vol 13 No 2 6 of life satisfaction are more attentive to CRM messages. Therefore, the life satisfaction hypothesis as applied in the context of CRM is proposed as follows: H2: There will be a positive interaction effect of life satisfaction and attitude towards the company supporting CRM on behavioral intention. That is, as life satisfaction increases, the relationship between attitude towards the company supporting CRM and behavioral intention will increase. Susceptibility to Time Pressure Different researchers use different perspectives to conceptualize and to measure time pressure. Srinivasan & Ratchford (1991) consider it as a measure of the lack of time a person reports having given the things he or she has to do in general, whereas Kaufman et al. (1991) suggest polychromic time use when a person engages in multiple activities simultaneously. There is no doubt that time pressure is deemed to affect not only the consumption behavior (e.g., Srinivasan & Ratchford), but also the helping behavior, in particular when people feel that they are too hurried to help (Darley & Batson, 1973). In relation to time pressure, a review of helping behavior in the prosocial literature suggests that people in rural areas are more likely to help than those in urban areas (Steblay, 1987). One possibility is that people in urban environments are less likely to notice that something is wrong. To reduce stimulation to a manageable and comfortable level, people may try to restrict their attention to only those aspects of the environment that are most personally important and block out irrelevant stimulation (Milgram, 1970). In other words, people s susceptibility to time pressure may prevail over the needs of another person and the costs of helping associated with time pressure made these otherwise good people less responsive to the needs of others. It is likely that the consumers with a high degree of susceptibility to time pressures in their daily life will not be attentive to CRM message. Therefore, the following susceptibility to time pressure hypothesis is proposed: H3: There will be a negative interaction effect of susceptibility to time pressure and attitude towards the company supporting CRM on behavioral intention. That is, as susceptibility to time pressure increases, the relationship between attitude towards the company supporting CRM and behavioral intention will decrease.

8 Web Journal of Chinese Management Review Vol 13 No 2 7 Method Study Context, Measures, and Sample Similar to the study by Ross et al. (1992) who selected Special Olympics in their CRM research, an unspecified international sports event to be taken place in China (similar to 2008 Olympics in Beijing) was chosen as the study context in this study. Respondents were given a definition of CRM with examples and then asked to think of a business organization (fast food) and a charitable organization which funds/supports that international sports event so as to eliminate pre-existing perceptions of brand loyalty/company image. Measures were mainly borrowed from existing studies and were modified in light of the study context. As shown in the Appendix, a total of 14 items were used, being three items for measuring attitude towards the company supporting CRM (Ross et al., 1992), three items for measuring behavioral intention (Zeithaml et al., 1996), four items for measuring life satisfaction (Neugarten et al., 1961), and four items for measuring susceptibility to time pressure (Lumpkin, 1985). They were measured on a seven-point Likert scale (anchored at 1 = strongly disagree and 7 = strongly agree ). Students at a major university in China were chosen and their responses to the questionnaire were collected through an online version of the questionnaire. During a two-week fieldwork, a total of 176 usable responses were collected. 43% of respondents were male. A great majority of the respondents (91%) were aged between 19 and 25. Slightly over 70% were undergraduate students whereas the rest were postgraduate students. Analysis and Results Scale reliabilities across different constructs of interest were checked with coefficient alpha ranging from 0.70 (susceptibility to time pressure) to 0.83 (behavioral attention). They are all within acceptable thresholds as indicated in Table 2. Table 3 summarizes the results of regression models for all hypotheses. All hypotheses were confirmed: (1) attitude towards the company which supports CRM was significantly and positively related to behavioral intention (R 2 = 0.24, = 0.49, t = 7.38, p 0.01), (2) significant positive interaction effect was found between attitude towards the company which supports CRM and consumer s life satisfaction (R 2 = 0.29, = 0.19, t = 2.96, p 0.01), and (3) significant negative interaction effect was found between attitude towards the company which supports CRM and consumer s susceptibility to time pressure (R 2 = 0.26, = -0.13, t = -2.00, p 0.05).

9 Web Journal of Chinese Management Review Vol 13 No 2 8 Table 2: Summary Statistics of Measures Dimensions and Indicators Mean s.d. Attitude towards the Company (AT) 0.70 AT AT AT Behavioral Intention (BI) 0.83 BI BI BI Life Satisfaction (LF) 0.72 LS LS LS LS Time Pressure (TP) 0.70 TP TP TP TP Table 3: Regression Models Testing Main and Interaction Effects H1 Core Effect H2 Life Sat. Effect H3 Time Pressure Effect Main Effects AT 0.49 (a) 0.45 (a) 0.51 (a) LS TP Interaction Effects AT X LS (a) -- AT X TP (b) R (a) p 0.01; (b) p 0.0

10 Web Journal of Chinese Management Review Vol 13 No 2 9 Discussion and Implications The confirmation of life satisfaction hypothesis and the susceptibility to time pressure hypothesis is not surprising. People feeling the bright side of life tend to help those in need, are more likely to contribute to the society, and are therefore more attentive to CRM campaigns. However, the susceptibility of time pressure put people off when helping is needed. Everyday, consumers are bombarded with hundreds of advertising messages in whatever formats across numerous media channels. Information overload is bound to occur, leading to the bystander effect even though there is a need for help. These two psychological aspects of consumers (i.e., life satisfaction and susceptibility to time pressure) enrich the existing CRM literature by going beyond the female gender of consumers that has been found to respond favorably to CRM promotional campaigns (Brunel & Nelson, 2000; Ross et al., 1992). The results of this study also provide significant implications to practitioners. By understanding the importance of life satisfaction and time pressure, marketers are able to profile their customers in a more informative fashion and to craft strategy as to what, where, and when to target consumers for CRM campaigns. Firstly, the confirmation of the life satisfaction hypothesis lends support to the study by Grau & Folse (2007) in which positive message framing (e.g., emphasizing on survival rate) works better than negative message framing (e.g., emphasizing on death rate). The CRM messages have to be structured in light of the bright side of life, survival, and hope. Secondly, the use of non-pressurized media vehicles should be of high priority. For example, the use of leisure-oriented magazines (e.g., those focusing on travelling and family) may be more effective than business-oriented magazines. Consumers are less pressurized to read leisure-oriented magazines than browsing through pages of hard economic data and analyses. Therefore, consumers should be more attentive to CRM messages. Lastly, by the same token, it may be cost-effective to the advertisers to focus on weekends for CRM promotional campaigns when consumers are less pressurized and are less information overloaded. Although the results of the present study have theoretical and managerial implications for researchers and practitioners, respectively, caution should also be taken when interpreting the results as far as the student sample in China was used in this study. Although this limitation does not compromise the integrity of this research, it put some bounds on the generalizability of the results in that the results of the study may not be applicable to other consumer segments (e.g., working adults) and/or in another cultural setting. Future study should address the characteristics of other consumer segments and the cultural influence.

11 Web Journal of Chinese Management Review Vol 13 No 2 10 Conclusion This study contributes to the CRM literature in that it explores the two psychological states of consumers (i.e., life satisfaction and susceptibility to time pressure). The confirmation of positive moderation effect of life satisfaction and the negative moderation of susceptibility to time pressure enhances the understanding of the psychological profile of consumers in addition to their demographic details. Marketers are then advised to deliver a positive message in their CRM campaigns and to select the media vehicles that are considered to be less pressurized.

12 Web Journal of Chinese Management Review Vol 13 No 2 11 Appendix: Measures Attitude towards the company supporting CRM (AT) AT1: The CRM promotion makes me more willing to patronize this fast food restaurant. AT2: I think this fast food restaurant is acting in a socially responsible manner. AT3: The CRM promotion makes me to have a favorable impression of this fast food restaurant. Behavioral Intention (BI) BI1: I will consider the products from this fast food restaurant as my first choice when I dine out for fast food products. BI2: I will purchase products from this fast food restaurant more in the future. BI3: I will purchase products from this fast food restaurant continuously unless this fast food restaurant stops donating to support the sports organization. Life Satisfaction (LS) LS1: I always feel now is the best time of life. LS2: In current life stage, I feel I have accomplished what I wanted to do. LS3: I think I do better work now than ever before. LS4: I am optimistic and cheerful for my life now. Susceptibility to Time Pressure (TP) TP1: I take time off for leisure activities every day. TP2: I have plenty of free time. TP3: I always seem to be in a hurry. (R) TP4: Most days, I have no time to relax. (R) (R): reverse coded

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