Consumers Response to Cause-Related Marketing: Empirical Evidence from Iran

Middle-East Journal of Scientific Research 12 (7): 1012-1016, 2012 ISSN 1990-9233 IDOSI Publications, 2012 DOI: 10.5829/idosi.mejsr.2012.12.7.1802 Consumers Response to Cause-Related Marketing: Empirical Evidence from Iran Sina Zeynali and Hasan Safarnia Department of Management, Shahid Bahonar Univresity, Kerman, Iran Abstract: Over the last decade, cause-related marketing (CRM) has become a popular marketing strategy for companies. Academic research suggests outcomes of CRM campaigns are generally positive for companies as well as for causes. For companies, CRM has been noted to increase sales and enhance companies image. As for causes, they received greater funding and publicity. Overall the impacts of cause-related marketing on consumers response are significant. This study uses a fictitious CRM advertisement to determine the impact of CRM on attitude toward CRM and consumers response. The study shows that CRM has significant positive impact on consumers response as well as purchase intention. Also this paper investigates the moderating role of gender on the relationship between cause-related marketing and consumers response. In this light, Results imply that gender has an influence on the consumers response in CRM and The rate of cause-related marketing is not the same for male and female consumers. Results of this study can be directly or indirectly used as guidelines for manufacturing companies or firms, service, advertising and commerce firms. Key words: Cause-related marketing Consumers response Gender Iran INTRODUCTION program designed to create a partnership between a company and a cause in order to raise money through In recent years, marketing campaigns and promotions product sales [5]. This definition shows CRM is with a social dimension have become more visible [1]. essentially a way for a firm to do well by doing good Consumers are becoming more concerned with corporate and provides several benefits to both the firm and the social responsibility [2] and firms are finding that nonprofit organizations (NPOs) receiving the donations consumers perceptions of this responsibility influence and only refer to promotions in which the amount given their attitudes and consumers response about new to a charity by a firm is somehow tied to the purchase products manufactured by a company [3]. intention of consumers. Central to its definition is the idea Cause-related marketing (CRM) is a common and of a marketing partnership between a business and popular form of CSR. Corporate social responsibility nonprofit entity for mutual benefit [6]. (CSR) initiatives have become increasingly popular The budget spent on cause-partnership was among companies in many parts of the world. expected to reach USD1.55 billion in 2009 [7]. The growth CSR is defined as recognizing that companies have of CRM has been an international phenomenon [8]. a responsibility to a range of stakeholder groups which The present study aims at: (1) understanding the include; consumers, employees, suppliers, shareholders, effect of cause-related marketing on consumers response. the political arena, the broader community, [and] the (2) examining the moderating role of gender on the environment [4]. relationship between cause-related marketing and The number of businesses that support cause-related consumers response. marketing (CRM) programs has grown substantially. CRM is a horizontal cooperative promotion and Literature Review: There has been growth and interest involves the contribution to a cause by a firm which is in CRM over the past few years [9, 10, 11, 12, 13]. linked to customers engaging in revenue-producing CRM is growing and its growth is due to several factors transactions with the firm. In other words, CRM is a such as favorable consumers response and consumers Corresponding Author: Sina, Zeynali, Department of Management, Shahid Bahonar Univresity, Kerman, Iran. Tel: +98-341-2121455. 1012

purchasing intention towards CRM [6, 14, 15, 16, 17], CRM campaigns often mentioned or communicate growing companies concern to support causes [14] as to the consumer specific donations distributed to well as to increase companies profits [5]. cause. It represents one specific cue that can influence Dupree [10] suggests that growth of interest in CRM consumers response to a particular CRM campaigns. is due to consumers growing social consciousness, Based on the theories mentioned and review of whereas Fellman [9] argues that companies are taking a relevant literature the following hypothesis is therefore more strategic approach to community involvement suggested: efforts and are seeking ways of benefi ting community organizations while simultaneously furthering company H1: There is a significant correlation between causebusiness goals. In fact, many of the world s most related marketing and consumers response. admired corporations maintain a sustained commitment to various forms of CRM [18]. The Moderating Role of Gender: The influence of The corporate income benefits of successful CRM gender on consumers response to CRM has been initiatives include the following: attracting new customers, discussed in the past literature [25, 26, 17]. The basis for increasing product sales, creating and sustaining a expecting that gender will positively affect consumers positive brand identity [19]; enhancing corporate image, response of CRM comes from the prosocial behavior differentiating products and organizations, increasing literature. Research suggests that consumer brand loyalty and sales [4]. characteristics such as gender [17, 26] influences Kalligeros [20] considered CRM is a strategy that consumers response to CRM. The difference in response links a company, brand, or product to a NPO for a toward CRM is not biologically rooted but is attributed mutually beneficial purpose and it can enhance the to the gender roles. The research on gender and prosocial reputation of a corporate entity, differentiate a brand behavior suggests that the help that one individual is and build the emotional bond between the consumer willing to provide to other people is related to perceived and a brand. sex roles [27]. Past studies on sex roles suggest that Cone Roper [21] survey found out that 55% of females are more favorable toward self and other oriented consumers surveyed indicated that local causes as appeals compared to males [28]. most important, followed by national causes (30%) and Hence, with regards to CRM, female as compared to global causes (10%). male is expected to give more favorable response towards Deshpande and Hitchon [22] used experimental study CRM. This is because with regards to prosocial behavior to comparatively analyze the influence of three ads to female is likely to respond to CRM campaigns more brand image, the results shown CRM ads produced more positively than male. It is therefore expected that gender forvable responses than brand ads prior to PSAs. may moderates the impact of CRM on consumers response. Based on the theories mentioned and review of Cause-related Marketing Effects on Consumers relevant literature the following hypothesis is therefore Response: Berger et al. [13] found that CRM led to suggested: favorable attitude toward the product involved. On the basis, Strahilevitz and Meyers [23] researched H2: The rate of cause-related marketing is not the same moderating role of product types to CRM and consumers for male and female consumers. response. Pracejus and Olsen [24] used experimental methods to MATERIALS AND METHODS explore the role of fit between brand and cause on choice and consumers response. when the cause is well-liked In the present study we investigated the effects of and found brand/cause fit substantially can amplify the cause-related marketing and gender on consumers CRM s effect above. They Also replicate and extend response. In order to analyze the first hypothesis, (ie the previous research findings using choice-based conjoint. relationship between cause-related marketing and Their two studies involving 329 respondents show that fit consumers response) inferential two-variable linear between brand and charity can impact consumers regression was used to determine the relationship response. between two variables CRM and consumers response by 1013

means of distance scale in which the determination rate of Our H0 Is: There is not a significant correlation between criterion variance by means of predictor variable was cause-related marketing and consumers response. 2 identified by R (coefficient of determination). In order to analyze the second hypothesis, (ie the Our H1 Is: There is a significant correlation between moderating role of gender on the relationship between cause-related marketing and consumers response. CRM and Consumers response); Leven test was used to A survey on the correlation between cause-related determine the equality of variance between the groups of marketing and consumers response is achieved by using women and men, then given equal variances between an inferential two-variable linear regression statistics, these two groups, inferential independent T-test was used based on which the calculated p-value (0.001) is less than to compare the average of CRM between the two groups significant level 0.01, therefore, at this level, H0 is rejected. of male and female. So it is concluded that the linear regression model is The current study, according to its purpose, is an significant and it means that there is a significant applied research and also is kind of descriptive surveys of correlation between cause-related marketing and the area of field studies considering the data collection consumers response. Correlation coefficient is R=0.68, method. To investigate the relationship between the which represents the extend of correlation between causevariables and testing hypothesis, after collecting the related marketing and consumers response. Given that needed data and information through questionnaires, 2 2 the value of R adj (adjusted R ) is equal to 0.45, it is statistical software SPSS20was used. concluded that the variable of cause-related marketing to All Iranian consumers form the Statistical population consumers in this model, determine 0.45 of the variance of of this research. Due to the magnitude and distribution of response of a product by consumers (Table 1). these consumers, those who bought their needs from The results also indicate that the regression Sepah, Refah and Moallem Chain Stores underwent this coefficient of cause-related marketing impact on survey. In this study, simple random sampling has been consumers response is 0.58 and the due to the P-value used meaning that the researcher accidentally went to (significance) of 0.001 which is smaller than the these stores and gave the questionnaire to the buyers to significance level of = 0.05, the H0 is rejected in this fill out the questionnaire and some of the completed level and thus it can be said that cause-related marketing questionnaires were chosen from each region according has a significant positive impact on consumers response. to the Cochran formula about the estimated sample. Cochran's formula is used to obtain the sample size in this Test of the Second Hypothesis: The rate of cause-related study based on which the number of sample is equal to marketing is not the same for male and female consumers. 384, which shows the maximum sample size in cases we may not have the exact population of the study with 5% Our H0 Is: The rate of cause-related marketing is the of error. same for male and female consumers. The questions are based on a Likert scale from very much agreement to very much disagreement that the Our H1 Is: The rate of cause-related marketing is not the grading is 1 to 5. In the present study, Cronbach's alpha same for male and female consumers. coefficient was used to assess the reliability of the Leven Test was used to examine the equality of questionnaire and the reliability of the questionnaire is variances and due to a p-value (significance) of 0.389 obtained Cronbach's Alpha: 0.84. which is larger than the significant level of =0.05, H0 is In this part we have tried to examine each hypothesis not rejected and as a result the variances of the two by using inferential two-variable linear regression groups are said to be equivalent, so parameter one test is statistics to test the first hypothesis and independent applicable. T-test to examine the second hypothesis and made a Comparison of cause-related marketing for male and decision to approve or reject the hypotheses. female consumers is obtained via T-test and because the p-value (significance) equals 0.001 is smaller than the Test of the First Hypothesis: There is a significant significance level of a=0.05, so the H0 hypothesis is correlation between cause-related marketing and rejected in this level. Thus it can be concluded that consumers response. there is a significant difference between the rate of 1014

Table 1: The coefficients of the regression model of the correlation between cause-related marketing to consumers and their response The standard Variable R 2 R R2adj Estimate B SE estimate of t p-value The extent of cause-related marketing for consumers 0.68 0.46 0.45 1.05 0.063 0.65 16.53 0.001 Table 2: T-test statistics for comparing the average cause-related marketing for consumers in terms of gender Male Female ------------------------------ ------------------------------ Degrees Gender Number Mean SD Number Mean SD T-Statistic of freedom Significant The rate of cause-related marketing for consumers 123 9.16 2.49 261 10.28 2.66 3.62 382 0.001 cause-related marketing of male and female consumers. 5. Varadarajan, P.R. and A. Menon, 1988. Cause-related According to the averages the cause-related marketing for marketing: a coalignment of marketing strategy and female consumers is more than that for male consumers corporate philanthropy. Journal of Marketing, and female consumers response is influenced by 52(3): 58-78. cause-related marketing (Table 2). 6. Hou, J., I. Du and J. Li, 2008. Cause s attributes influencing consumer s purchasing intention: CONCLUSIONS empirical evidence from China, Asia Pacific Journal of Marketing and Logistics, 20(4): 363-380. The present study assesses the effect of cause- 7. Independent Evaluation Group, 2011. IEG related marketing and gender on consumers response. sponsorship reports, [Online] Available: Using an experimental study on a total of 384 respondents http://www.sponsorship.com (February 3, 2011). of Iranian consumers, the current study shows that 8. Wymer, W. and S. Samu, 2009. The influence of cause-related marketing has a significant positive impact cause-marketing associations on product and cause on consumers response.second, the current study brand value. International Journal of Nonprofit examines the effect of cause-related marketing on male Voluntary Sector Marketing, 14: 1-20. and female. With regards to the moderating effect of 9. Fellman, M.W., 1999. Cause related marketing takes gender on the relationship between cause-related a strategic view, Marketing News, pp: 4. marketing and consumers response, the results of this 10. Dupree, J., 2000. Review of Brand Spirit: how cause study shows that The rate of cause-related marketing is related marketing builds brands, In: H. Pringle and not the same for male and female consumers. Female M. Thompson, (eds), Journal of Consumer consumers response is influenced by cause-related Marketing, 17(5): 461-464. marketing. in other words, cause-related marketing does 11. Kitchen, P.J. and D.E. Schultz, 2001. Raising the not impact male response very much. Based on these Corporate Umbrella: Corporate Communications in results, implications for CRM campaign managers and st the 21 Century, Palgrave-Macmillan, Basingstoke, research limitations are highlighted. UK. 12. Vallaster, C. and L. De Chernatony, 2005. REFERENCES Internationalisation of service brands: The role of leadership during the internal branding process, 1. Drumwright, M.E., 1996. Company advertising with a Journal of Marketing Management, 21(2): 181-203. social dimension: the role of noneconomic criteria, 13. Berger, I.E., P. Cunningham and M.E. Drumwright, Journal of Marketing, 60(10): 71-87. 2007. Mainstreaming CSR: Developing markets 2. Benezra, K., 1996. Cause and effects marketing, for virtue, California Management Review, Brandweek, 37(22): 38-41. 49(44): 132-157. 3. Brown, T.J. and P.A. Dacin, 1997. The company 14. Brink, D.V.D., G. Odekerken-Schroder and P. Pauwels, and the product: corporate associations and 2006. The effect of strategic and tactical cause-related consumer product responses, Journal of Marketing, marketing on consumers' brand loyalty. Journal of 61: 68-84. Consumer Marketing, 23(1): 15-25. 4. Adkins, S., 2005. Cause Related Marketing: Who 15. Gupta, S. and J. Pirsch, 2006. The company-cause- Cares Wins, Butterworth Heinemann, Oxford, UK, customer fit decision in cause-related marketing. 47: 51-76. Journal of Consumer Marketing, 23(6): 314-326. 1015

16. Lafferty, B.A. and R.E. Goldsmith, 2005. Cause-brand 23. Strahilevitz, M. and J.G. Meyers, 1998. Donations to alliances: does the cause help the brand or does the charity as purchase incentives: how well they work brand help the cause? Journal of Business Research, may depend on what you are trying to sell, Journal of 58(4): 423-429. Consumer Research, 24(3): 434-46. 17. Ross, J.K.III, L.T. Patterson and M.A. Stutts, 1992. 24. Pracejus, J.W. and G.D. Olsen, 2004. The role of Consumer perceptions of organizations that use brand/cause fit in the effectiveness of cause-related cause-related marketing. Journal of the Academy of marketing campaigns, Journal of Business Research, Marketing Science, 20(1): 93-97. 57: 635-40. 18. Demos, T., 2006. The world s most admired 25. Moosmayer, D.C. and A. Fuljahn, 2010. Consumer companies, Fortune, 153(4): 33-42. perceptions of cause-related marketing. Journal of 19. Kotler, P. and N. Lee, 2005. Corporate Social Consumer Marketing, 27(6): 543-549. Responsibility: Doing the Most Good for Your 26. Barnes, N.G., 1992. Determinants of consumer Company and Your Cause, John Wiley and Sons, participation in cause-related marketing campaigns, Hoboken, NJ, 40: 87-114. American Business Review, June, pp: 21-24. 20. Kalligeros, M., 2005. Choose wisely: partnering for 27. Bar, Tal, D., 1976. Prosocial Behavior: Theory and cause-related marketing, Public Relations Tactics, Research. New York: Halsted Press, 22: 183-197. 12(8): 1-15. 28. Myers, L.V., 1988. The influence of sex roles on 21. Cone, Inc., 2000. The 2000 Cone/Roper Cause-Related judgments. Journal of Consumer Res., 14: 522-530. Teen Survey, Boston, MA, Available: http://www.coneinc.com. 22. Deshpande, S. and J.C. Hitchon, 2002. Cause-related marketing ads in the light of negative news, Journal and Mass Communication Quarterly, 79: 905-26. 1016