Cause Marketing Effectiveness and the Moderating Role of Price Discounts

Abstract

Can cause marketing (CM) be effective? If so, do price discounts moderate CM effectiveness? Despite the prevalence of linking product sales with donations to charity, field evidence of CM effectiveness is lacking. This is of particular concern for managers who wonder whether the findings of laboratory experiments extend to actual consumer purchases. Using large-scale randomized field experiments with more than 17,000 consumers, this research documents that CM can significantly increase consumer purchases. Notably, the answer to the second question is more complicated. Under the moderating role of price discounts, the impact of CM on sales purchases may follow an inverted U-shaped relationship—that is, strongest when price discounts are moderate rather than deep or absent. Follow-up lab experiments reveal that consumers' warm-glow good feelings from CM represent the underlying process. These findings provide novel insights into the boundary conditions and mechanisms of the sales impact of CM for researchers and managers alike.

Warm Glow or Extra Charge? The Ambivalent Effect of Corporate Social Responsibility Activities on Customers’ Perceived Price Fairness

“…High CSR costs may eventually lead customers to infer that the firm's social projects are sufficiently endowed with resources to effectively support the targeted social cause (Du, Bhattacharya, and Sen 2010). As a result, customers should be more likely to realize personal benefits from a firm's CSR engagementthat is, feel the warm glow of helping others (Andrews et al 2014). Thus: We base our proposition for the interactive effect of level of firm CSR engagement and type of CSR engagement on two arguments: First, business process CSR engagement can imply significant financial payoffs for the firm, for example in the case of employee support programs which have been shown to significantly enhance the work engagement and productivity of the workforce (Bhattacharya, Sen, and Korschun 2008).…”

Impact of Consumers’ Self-Construal, Empathy, and Moral Identity on Purchase Intention toward Cause-Related Marketing Goods: A Perspective of the Moderated Mediation Model

“…CRM has been defined as "the linking of charity fundraising through purchasing corporate goods or services," or in other words, corporate contributions to charities originate from CRM product sales rather than the operational budgets of corporations (Varadarajan & Menon, 1988). Studies have verified that CRM improves product sales (Andrew et al, 2014), strengthens consumer attitudes toward companies that sponsor causes (Ross et al, 1992), increases product sales prices (Leszczyc & Rothkopf, 2010), and enhances the positive image of other products under the same brand (Krishna (Bhattacharya et al, 2009) and enhances a firm's positive word of mouth (Thomas et al, 2011). However, CRM also has negative effects; for example, skepticism and distrust can cause consumers to develop a perception of "cause-exploitative marketing" toward poorly designed charitable strategies implemented by companies (Sasse & Trahan, 2007;Varadarajan & Menon, 1988).…”

Co-branding strategy in cause-related advertising: the fit between brand and cause

“…Firms commonly use advertising to communicate practices to stakeholders of donating a portion of sales revenue to charities (Robinson, Irmak and Jayachandran, 2012), the purpose of which is to encourage consumers to buy advertised products, and contribute to social causes (Andrews, Luo, Fang and Aspara, 2014).…”