Thesis Business Studies - Marketing track
Final version - submitted at 18/06/2014
Kim van der Krogt | 10659609
MSc Business studies | Marketing track
Faculty Business and Economics | University of Amsterdam
First supervisor | L. Moratis Second supervisor | M. Vock
The role of the type of fit, the company's
motive and the degree of credibility on the
price willingness to pay for a product in a
CRM communication.
Table of contents
Abstract ...4
1. Introduction ...5
2. Literature review and conceptual framework ...8
2.1 Cause related marketing ...8
2.2 Company's motive ... 10
2.3 Type of fit ... 12
2.4 Willingness to pay ... 14
2.5 Companies motive and type of fit ... 18
2.6 Degree of credibility... 19
3. Data collection and method ... 23
3.1 Study context and research design ... 23
3.2 Population and participants ... 24
3.3 Independent variables ... 25
3.4 Dependent variables ... 25
4. Results ... 27
4.1 Description of the sample ... 27
4.2 Testing the hypotheses ... 27
5. Discussion ... 34
5.1 General discussion ... 34
5.2 Managerial implications ... 38
5.3 Limitations and further research ... 40
6. Conclusion ... 43
6.1 Summary of the study ... 43
6.2 Contribution of the study ... 45
References ... 47
List of tables and figures
Figure 2.1 Research framework...22 Table 3.1 Treatments of the experiment...24 Funnel plot 4.1 Mean of the maximum price willingness to pay and their confidence intervals...31 Table 4.2 Summary of the SPSS output: the correlation analysis...32 Table 4.3 Summary of the SPSS output: the correlation analysis...33
Abstract
Research has shown that it is beneficial for companies to engage in cause-related marketing (CRM), for instance to create greater brand awareness, to enhance customer goodwill and to make an increase in sales. Although the larger concepts on this topic have been extensively researched, we do not know enough about the consumer's decisions in CRM and how these decisions could be influenced. Especially, little is known about the maximum price consumers would like to pay for a CRM product. This study has found that 24,8% of the participants are not willing to pay extra for a CRM product. Additionally, this study does not confirm that the type of fit and the motive of the company has an influence on the maximum price willingness to pay (WTP). To conclude, consumers will not base their price premium for a CRM product on the type of fit and the motive of the company. Therefore companies cannot influence consumer decisions in CRM by manipulating the type of fit and their motive. Furthermore, this study conclude that the type of fit and the motive of the company does not influence the degree of credibility of the company and the degree of credibility of the communication significantly, nor does the degree of credibility influence the maximum price to pay for the CRM product. This means that the degree of credibility has no influence on the WTP,
according to this research. Since this study is one of the first studies that measures the WTP in CRM, more research is needed to generalize if the fit, the motive and the credibility have an influence on the WTP in CRM.
1. Introduction
During the last couple of years the phenomenon corporate social responsibility (CSR) has become more and more important in business and it has even become a criteria for doing business in the 21st century. Mohr et al. (2001:47) define CSR as ‘a company’s commitment to minimizing or eliminating any harmful effects and maximizing its long-run beneficial impact on society’. The company takes responsibility for the people, the environment and their business operations. In a study by Becker-Olsen et al. (2006), results have shown that 52% of the respondents would boycott companies that acted irresponsibly if there were reasonable alternatives. Also, consumer's evaluations of the company and purchase intent will increase when companies take CSR actions (Mohr and Webb, 2005; Bhattacharya and Sen, 2001). Concluding from previous research, it is interesting and beneficial for companies to engage in CSR and to communicate about it to their consumers. One of the options to engage in CSR is cause-related marketing (CRM) (Kotler and Lee, 2005). CRM is one of the positive ways to communicate about companies CSR actions (Westberg and Pope, 2012).
(Varadarajan and Menon, 1988: 60) define CRM as the “process of formulating and implementing marketing activities that are characterized by an offer from the company to contribute a specified amount to a designated cause when customers engage in revenue providing exchanges that satisfy organizational and individual objectives”. In the communications of CRM, the company links its business name to a non-profit name.
In general, we do not know enough about the role of CSR in consumption decisions and how to influence it (e.g. Aguinis and Glavas, 2012; Ellen et al., 2006; Hoek and Gendall, 2008; Mohr and Webb (2005); Mohr et al., 2001; Muller et al., 2013; Oberseder et al., 2011; Pracejus and Olsen, 2004; Samu and Wymer, 2009). The variable willingness to pay (WTP) has an important relevance in CRM. Although, this variable has barely been researched in the existing literature. WTP is defined as the maximum amount of money a customer is willing to
pay for a product or service (Krishna, 1991). For companies it is interesting how the WTP can be influenced by other variables, for example the company's motive and the type of fit. From previous research is known that consumers evaluate a company more positively when they have mixed motives for engaging in CRM, both business and society, than when the company only works from self-centered motives (Ellen et al., 2006). However, the influence of the type of fit in CRM has not been determined yet. At the moment, there are three leading opinions. The first one is that a high fit result in a more positive attitude toward the company (Barone et al., 2007; Basil and Herr, 2006; Becker-Olsen, 2006; Bigne-Alcaniz et al., 2009; Chèron et al., 2012; Lee et al., 2012; Samu and Wyer, 2009; Simmons and Becker-Olsen, 2006; Trimble and Rifon, 2006; van den Brink et al., 2006; Vock et al., 2013) The second one is the opinion of (Forehand and Grier, 2003). They concluded that a lower fit is more positive for the
company. The third opinion is that the attitude toward the company is regardless of the type of fit (Hoek and Gendall, 2008; Lafferty, 2007; Lafferty, 2009; Nan and Heo, 2007;
Moosmaayer and Fuhljan, 2013; Vock et al., 2013).
This study focuses on how the WTP is influenced by the motive of the company and the type of fit. Additionally, this study will also focus on the credibility of the company and the CRM communication. In the study of (Becker-Olsen, 2006) they concluded that a high fit compared to a low fit between the company and the cause has resulted in more credibility of the company. Credibility is defined as the degree to which the company is perceived as trustworthy and the degree of expertise to communicate about the topic and give an objective opinion about the subject (Ohanian, 1990). Looking at the existing literature and the gap that we found, we came up with the following research question: Does the degree of credibility has a role in the relationship between type of fit and the companies motive on the price willingness to pay for the product in a CRM communication?
The expected contribution of this research by answering the research question, is that companies do know more about how they can influence the WTP and the degree of credibility that they evoke among their consumers with their CRM actions. This knowledge is of added-value when companies need to find a partner charity organization or in the preparation for their marketing communications. The more consumers would like to pay for a CRM product the more margin can be achieved for the company or the more money could be spend on charity.
This report consists of different chapters. First, the literature study will deal with a detailed background of the existing literature on this topic and relevant hypotheses are set for the next study. Second, the data and method of the study will be explained. Thirdly, the results will be clearly presented. Fourthly, the results of this study will be compared with the existing literature. Last of all, the main conclusions of this study will be drawn.
2. Literature review and conceptual framework
In this chapter the relevant existing literature on this topic will be studied. This will be the starting point for our own study. On the basis of the existing literature the hypotheses are formulated, which will be tested later on.
2.1 Cause related marketing
CRM is defined as the “process of formulating and implementing marketing activities that are characterized by an offer from the company to contribute a specified amount to a designated cause when customers engage in revenue providing exchanges that satisfy organizational and individual objectives” (Varadarajan and Menon, 1988: 60). An example of CRM is a
jewellery shop selling a Pink Ribbon bracelet and donating part of the selling price to Pink Ribbon. Another example is a donation to Unicef for a vaccination on the sale of every pack of Pampers. CRM is a manner for companies to do business and at the same time contribute to society, selling the products and doing something good for the society or the environment. In the year 1998 larger companies actually increased their investments in CRM. But not only the larger companies engaged in CRM, the adoption rate of CRM in the smaller companies was about 40%. The CEO's of the smaller companies indicated that they would increase the investments in CRM if they were satisfied with the results and when there is positive worth of mouth (File and Russ, 1998).
In general, consumers respond positive to companies that engage CSR in their business (Wymer and Samu, 2003). Worth mentioning is that the ethicality of a company's behaviour plays an important role in consumer behaviour. The ethicality of a company influences the consumer choice (Barone et al., 2000; Creyer and Ross, 1997). Furthermore, consumers expect a company to act ethical. Consumers will reward this behaviour by willing to pay higher prices for the product. One of the reasons why consumers still buy from
reasons, it could be interesting for companies to act responsible and to enhance CSR in their business. CRM is one manner to engage CSR in a company's business. From previous research it is known that consumers have similar positive attitudes to CSR and CRM (Sheikh and Beise-Zee, 2011). But consumers respond more positively to CRM, compared to
sponsorship and sales promotions. CRM will also achieve more brand awareness (Westberg and Pope, 2012). Therefore, CRM compared to other communication methods, is a good way for companies to engage in CSR. Companies can also increase their brand loyalty by CRM. This will be most beneficial when companies set up long-lasting CRM campaigns with a product that has a low level of consumer involvement (van den Brink et al., 2006).
Although, CRM can be very attractive for companies, because the more favourable publicity, improved public goodwill, greater brand awareness and an increase in sales
(Wymer and Samu, 2003), there is also a risk-factor for the companies to participate in CRM. Companies can be put in a bad light when they collaborate with another company. For
instance, when one of the companies act in a scandalous manner, it will harm the reputation of both companies (Wymer and Samu, 2003). A well known example of this in the Netherlands is the Rabobank sponsoring the Dutch Tour de France cycling team. When one of the runners was accused of doping, Rabobank immediately stopped sponsoring to limit the damage to their reputation.
As shown above, CRM can be both beneficial and detrimental for the company. It is beneficial for a company to make a risk-analysis when they consider to collaborate with a cause and link their brand name to another company. Companies have different motives to engage in CRM and to link their brand name to a cause. According to (Westberg and Pope, 2012) companies use CRM to achieve social objectives, next to doing business.
2.2 Company's motive
As mentioned before, more and more companies engage in CRM nowadays. Companies can choose to communicate their motives to their consumers. Consumers will always try to understand the motives that are embedded within the marketing message and they will elaborate on them. According to the attribution theory, people or companies distinguish between two types of motives: internal and external ones. The internal ones are considered to be positive and the external ones are considered to be negative. External motives might give the impression that the company acts from self-centered motives and that the company is just window dressing or green-washing.People interpret behavior in terms of its causes and these interpretations play an important role in determining reactions to the behavior (Kelley & Michela, 1980). Once consumers put positive attributions to the motive of the company to engage in CSR, consumers react more positive towards the company (Forehand and Grier, 2003; Yoon et al., 2006). Sincerity also plays an important role in the reactions towards the company. CSR activities only improve the company's image when consumers criticize the companies motive as sincere. When consumers attribute the companies motives as insincere, this will hurt the company's image (Yoon et al., 2006). An example is Shell, the sponsor of Wildlife Photographer of the Year. The motivation of the Chairman of Shell UK James Smith was as follows: 'We are delighted to be sponsoring this wonderful competition. It highlights
the importance of supporting global biodiversity. This is an area of considerable importance to us as a company and one to which we are keenly committed'. Consumers will try to
understand why Shell is engaging in CSR (Kelley and Michela, 1980). In this case consumers may think that this is an effort of Shell to hide what they damaged with their business. Given these points, consumers will think that the company Shell is acting from self interest and this will lead to sceptism among consumers. The sceptisim of consumers will grow, when they perceive the CSR communication as greenwashing (Elving, 2012). The consumer is more
likely to believe the communication when the company is perceived as socially responsible (Kim and Lee, 2009).
In general, researchers and managers take it that consumers' beliefs in the motives of companies to engage in CSR actions, are either found in their wish to achieve more business or in their real social concerns, and that there is nothing in between. The business motive to engage in CSR actions is called the self-centered motive and the motive to achieve social objectives is called the other-centered motive (Ellen et al., 2006). Consequently, companies can engage in CRM on different manners, proactive and reactive. A proactive manner means that companies take responsibility for their own behaviour. Consequently a reactive manner means that companies engage in CRM because it is expected from them. Consumers perceive proactive CSR as more strategic- and values-driven than reactive CSR (Groza et al., 2011). Companies yield a more favourable attitudinal response from consumers when they act in a proactive manner (Becker-Olsen, 2006, Groza et al., 2011). Since, companies have different manners to engage in CRM, they also have different motives for engaging CSR in their business. Achieving business and/or achieving social objectives are the main motives of the companies (Westberg and Pope, 2012; Wymer and Samu 2003). The companies have the ability to explain these motives to their consumers. Especially in recent years this has become more common, because the transparency of the companies became an important issue.
Transparency means that all stakeholders have the ability to see everything what a company is doing (Klotz et al., 2008). Companies create customer trust which leads to customer
commitment and loyalty when companies articulate their positive motive. This is additional to the strong position among competitors what they gain with articulating the positive motive (Adiwijaya and Fauzan, 2012).
A study by Ellen et al. (2006) showed that the distinction between motives is actually more complex as mentioned above. Consumers differentiated four types of (sub)motives:
self-centered motives which are strategic and egoistic and other-self-centered motives which are values driven and stakeholder driven. Accordingly, consumers are most positive toward CSR actions which they think are value-driven and strategic and most negative toward stakeholder driven and egoistic (Ellen et al., 2006). The research of Myers et al. (2012); Moosmayer and Fuljahn (2013) show that companies with other-centered motives will have more positive product evaluations and more favorable CRM campaign attitudes than companies that have a self-centered motive. Other than earlier studies, (Ellen et al., 2006) concluded that consumers evaluate a company more positively when they have mixed motives, both business and society, than when a company only acts from self-centered motives.
2.3 Type of fit
The definition of fit is 'the perceived link between the company's image, positioning and target market and the cause's image and consistency' (Varadarajan and Menon, 1988). In CRM the company needs to find a cause to link their business name with and to communicate about in advertisements and campaigns. The link between the company and the cause could be not that obvious when they do not share the same values (low fit). Therefore companies can articulate the fit with the consequence that the consumer knows why the company has chosen to link the business name with the cause. An example of articulation is when Coca-Cola was sponsoring the Olympic Games. At first the fit was not that clear for the consumer, but when Coca-Cola articulated that they shared many values, like participation, friendship, excellence and respect, the fit became more clear for the consumer. Especially in CRM the type of fit plays a role in developing favourable brand associations. In CRM the type of fit plays a bigger role than in other communication methods, like sponsorship and sales
promotions (Westberg and Pope, 2012). Therefore it is interesting for companies that engage in CRM to investigate which type of fit is the most beneficial for their business. In general, there are two theories that are focus on the type of fit. The congruence theory suggest that
information is more easily remembered when there is a high similarity or relatedness (high fit). An example is that a running event which is sponsored by a running shoe brand seems more easily remembered, than when there is a low similarity (Rifon et al., 2004). The other theory, the schema theory, suggest that an incongruence or a mismatch (low fit) between an event, person or place yields a greater number of thoughts (Rifon et al., 2004). These two theories contradict.
A lot of empirical research has been done in the last couple of years on the effect of type of fit in CRM. As well as in the theories mentioned above as in the existing literature, researchers have different opinions about the type of fit. Although the different studies have used different companies, causes, products and subgroups (for example the distinguish between prosocials and proselfs in the study of Vock et al. (2013)). These studies deal with a similar question, namely what the role is of the type of fit in CRM. In conclusion, three leading opinions can be found in the existing literature: the first one is that a high fit between the company and the cause is most beneficial for the company, the second one is that a low fit is more beneficial and the third one is that the type of fit does not matter in CRM. In brief, the three opinions will be presented.
To begin with, (Becker-Olsen, 2006) concluded that the link between the company and the cause is important in CRM. They have shown that when there is a low fit between companies and social initiatives, there will be a greater number of thoughts, thoughts that are less favourable, thoughts that are more focused on the company's motive, more negative attitudes toward the company, beliefs about the company are less credible and lower likelihood of purchase intention, comparable with high fit. This means that when there is no alignment or congruence between the company and the cause it can be detrimental for the company, rather than beneficial. In the research of Adiwijaya and Fauzan (2012); Barone et al. (2007); Basil and Herr (2006);
Bigne-Alcaniz et al. (2009); Chèron et al. (2012); Gupta and Pirsch (2006); Lee et al. (2012); Samu and Wyer (2009); Simmons and Becker-Olsen (2006); Trimble and Rifon (2006); van den Brink et al. (2006); Vock et al. (2013), they confirm (parts of) this position.
Secondly, the research of Forehand and Grier (2003) contradict the above mentioned results. In this research they suggest that the attitudes toward the company will improve when the fit between the company and the cause is lower. They concluded that a lower fit between the company and the cause is more beneficial for the company.
Moreover, the research by (Nan and Heo, 2007) demonstrates that an advertisement with an embedded CRM message, compared with a similar one without a CRM message, elicits a more favorable consumer attitude toward the company, regardless the level of fit between the sponsoring brand and the social cause. This research suggest that the type of fit does not change the consumer attitude toward the company, neither in a beneficial way nor in a detrimental way. In the research of Hoek and Gendall (2008); Lafferty (2007); Lafferty (2009); Moosmaayer and Fuhljan (2013); Vock et al. (2013) this position was confirmed.
2.4 Willingness to pay
A classic theory of human behaviour is the theory of planned behaviour (Fishbein and Ajzen, 1975). The basic assumption in this theory is that actual human behavior is the direct result of behavioral intentions. These behavioral intentions are in turn the result of an attitude that a person has towards a particular behaviour and the subjective norms that indicate what people find good or bad behaviour (normative beliefs). This model forms the theory of reasoned actions (Fischbein, 1967). Years later Fischbein and Ajzen (1975) developed an additional section to this model, which led to the Theory of Planned Behaviour. The variable perceived
behaviour control was added to the model, which influence the intention and the actual behaviour. The meaning of this additional variable is how a person feels towards his own influence on a particular situation. Although intentions of humans are believed to be the best predictor of behavior (Ajzen, 1991; Armitage & Conner, 2001), research has shown that there is a frequent lack of agreement between intentions and actual behavior. A strong intention is sometimes not enough to proceed into actual behavior. This is called 'the intention-behavior gap' (Gallois et al., 1992; Orbell and Sheeran, 1998; Sheeran and Orbell, (2000a); Sheeran and Orbell, (2000b); Sutton et al., 1994; Stanton et al., 1996). The meta-analysis of Sheeran (2002) indicate that on average the future behavior could be predicted only for 28% by
intentions. The variable WTP is an example of an intention. The WTP arises from an attitude, subjective norms and perceived behavior control. The WTP does not measure the actual behavior of the consumer and therefore WTP is perceived as an intention.
In general, it is known that consumers are willing to pay more for products or services from ethical companies, and this phenomenon called environmental behavior. The most important predictors of this behavior are personal-philosophical values, emotional
involvement, perceived control and environmental awareness (Grob, 1995). Consumers will reward the companies for their environmental behaviour in exchange for justifiable and sustainable products or services (Casadesus-Masanell et al., 2009; Creyer and Ross;1997; De Pelsenmacker et al., 2005; Ho Kang et al., 2012). For instance Belgian consumers are willing to pay on average a price premium of 10% for coffee with a fair trade label (De Pelsenmacker et al., 2005). Another example is that customers are willing to pay significant more for
organic cotton garments, even if they do not get incremental benefits from it (Casadesus-Masanell et al., 2009). That consumers are willing to pay more for products or services that are justifiable and sustainable, even if they do not get incremental benefits from it, is
products and services. At the same time they can show their social or environmental awareness and contribute to a better society.
CRM is one manner for a company to act ethically. Research has shown that the purchase intention of consumers is higher when companies engage in CRM (Becker-Olsen, 2006; Mohr and Webb, 2005; Bhattacharya and Sen, 2001). Consumers give the company more favourable publicity, it will improve public goodwill and it gives greater brand awareness among the company's consumers (Wymer and Samu, 2003). Nevertheless,
companies need to keep in mind that consumers will choose for a CRM product when there is no financial trade-off. Research has shown, that if consumers have to choose between doing good and savings for themselves, then they are less opt to choose for doing good by buying products with a donation (Creyer and Ross; 1997; Müller et al., 2013). In contrast, there is also a group of consumers who are not willing to pay a premium for donations to charity. In the research of Koschate-Fischer et al. (2012) this percentage was 12,6%.
In recent years the purchase intent of CRM products and services has regularly been researched, while the question remains how many more consumers are willing to pay for these CRM products or services. This WTP has barely been researched in the existing literature. Customer's willingness to pay is defined as the maximum amount of money the customer is willing to pay for a product or service (Krishna, 1991). In a study by McManus and Elfenbein ( 2010) they found that consumers are willing to pay a 6% higher price for a cause product, compared with a non-cause product. In this study they compared biddings on Ebay of cause products and non-cause products. These products were equal to each other. This research is in a real life setting, whereby this research is of great value in the literature. The study of
(Koschate-Fisher et al., 2012) is focused on the moderators on the relationship between the amount of company donation and the WTP for a CRM product. This relationship is positive
and moderated by the positive attitude toward helping others, the stronger the warm glow motive, the customer's cause involvement and cause organization affinity.
It is interesting for companies to find out which variables have an effect on the WTP for a CRM product or service. In that case, companies can anticipate on this effect by optimizing the CRM advertisements and campaigns. Consumers donate significantly more when there is a high fit between the company and the cause than when there is a low fit for instance (Pracejus and Olsen, 2004). The study of (Koschate-Fischer et al., 2012) showed that when the company-cause fit is high, companies do not need to donate as much. When
companies link themselves with a low-fit cause, companies need to be more careful with setting a proper donation amount. Furthermore, the motive of the company can have an influence on the consumer's WTP. When companies have a positive motive, the other centered motive, this will improve the company's image and attitudes towards the company (Forehand and Grier, 2003; Myers et al., 2012; Moosmayer and Fuljahn, 2013; Yoon et al., 2006). Moreover, the companies motive has a mediating role in the relationship between donation amount and WTP with the moderation company-cause fit (Koschate-Fischer et al., 2012).
In conclusion, up to now the variable WTP in CRM has barely been researched in the existing literature. Consumers are willing to pay more for a CRM product (McManus and Elfenbein, 2010). Investigated moderators in this relationship are warm glow motive, customer's cause involvement, cause organization affinity and company-cause fit (Koschate-Fischer et al., 2012). It is interesting for companies to know more about variables that have effect on the WTP in CRM, so that they can anticipate on that.
In summary:
H1a: Consumers would like to pay a lower price for the product in CRM when companies engage in CSR actions because of the self-centered motive.
H1b: Consumers would like to pay a higher price for the product in CRM when companies engage in CSR actions because of the other-centered motive.
H2a: Consumers would like to pay a lower price for the product in CRM when there is a low fit between the company and the cause.
H2b: Consumers would like to pay a higher price for the product in CRM when there is a high fit between the company and the cause.
2.5 Companies motive and type of fit
The combination of different motives of a company to engage in CRM and the type of fit between a company and a cause has barely been researched in the existing literature. Consumers evaluate a company more positively when they have mixed motives, both business-related and society-related, than when the company only acts from self-centered motives (Ellen et al., 2006). However, if these evaluations will also change also depending on the type of fit between the company and the cause is not researched.
The relationship between type of fit and evaluations of CRM activities is moderated by the perceived motive of the organization to engage in CRM (Barone et al., 2007). When the organization has an positive motive (other-centered), the fit between the company and the cause will have a positive impact on evaluations. Conversely, when the organization has a negative motive (self-centered), the fit has no impact on evaluations. These outcomes means that as a companies engage in CRM with a positive motive (other-centered) they will get more positive evaluations as soon as the fit is higher. A close match between a company's core business and a cause is perceived by consumers as more expert and it transfers more positive feelings about the cause to the company (Hoeffler and Keller, 2002).
For our own study we assume that a close match between a company's core business, the cause and its motive is perceived by consumers as more expert. Consequently, this will have a positive impact on the evaluations of the organization. So, if there is congruence
between the fit and the motive, consumers are willing to pay a higher price for the product or service in CRM. This assumption is based on the studies of (Hoeffler and Keller, 2002; Barone et al., 2007).
In summary:
H3a: Consumers would like to pay a higher price for the product in CRM when companies engage in CSR actions because of the other-centered motive with a high fit between company and the cause.
H3b: Consumers would like to pay a lower price for the product in CRM when companies engage in CSR actions because of the self-centered motive with a high fit between company and the cause.
H4a: Consumers would like to pay a higher price for the product in CRM when companies engage in CSR actions because of the other-centered motive with a low fit between company and the cause.
H4b: Consumers would like to pay a lower price for the product in CRM when companies engage in CSR actions because of the self-centered motive with a low fit between company and the cause.
2.6 Degree of credibility
Companies can evoke credibility with their CSR actions. Credibility refers to the degree in which the source is perceived as trustworthy and the degree of expertise to communicate about the topic and give an objective opinion about the subject (Ohanian, 1990). Corporate credibility is more focused on the company as the maker of the product and/or source of advertising (Newell and Goldsmith, 2001). While (Keller, 1998:426) defines corporate credibility as 'the extent to which consumers believe that a company can design and deliver products and services that satisfy customer needs and wants'. Anyway, it can be hard for
companies to communicate about their CSR actions and become credible. Companies communicate these social initiatives regularly through advertisements and campaigns. However, companies can use some tactics to boost the credibility of their CSR actions. First, they need to embed their CSR engagement in their vision and mission. Secondly, they need to present factual arguments about why they are CSR engaged. Thirdly, they can use two-sided messages which means that they include both positive and negative information in their communications. Research has shown that two-sided messages can be more effective than one-sided messages (Pechmann, 1992). Fourthly, they need to promote that they take the CSR initiatives industry-wide and that they take collective action. Fifthly, they need to show their awards and certificates that the company has won to show their CSR credibility (Du and Vieira Jr.,2012). In the study of (Kim and Lee, 2009) they found that the CRM
communication is perceived as more credible when the claim of the donation size is objective, rather than subjective.
As soon as companies collaborate with a cause this can lead to different degrees of credibility. Research has shown that the type of fit can play a role in the degree of credibility of the company perceived by its consumers. If there is a low fit between the company and the cause, the beliefs about the company are as less credible and there is lower likelihood of purchase intention, relative to high fit (Becker-Olsen, 2006). Besides, a company that sponsors the cause gets increased credibility in the congruent condition and this credibility decreased somewhat in the incongruent condition (Rifon et al., 2004). In conclusion, there is a link between type of fit and perceived credibility of CSR initiatives. Moreover, the company gets more credible responses towards the company with a high fit between the company and the cause (Becker-Olsen, 2006; Rifon et al., 2004). Furthermore, research has shown that the motive of the company also has an effect on the degree of credibility. Consumers perceive actions as proactive and socially motivated when the company select their cause carefully.
When there is a right connection between the company and the cause, consumers perceive the motive of the company as other-centered instead of self-centered (Becker-Olsen, 2006). Moreover, altruistic consumers use altruistic ascriptions to form their opinion on brand credibility in CRM messages. Although non altruistic consumers base their evaluation on cause-brand fit (Bigne-Alcaniz et al., 2009). This suggests that the higher the fit, the higher the credibility of the company by non altruistic consumers. In contrary, the degree of
credibility did not differ from type of motive in a study of (Diepenmaat, 2012). In this study were the intrinsic and extrinsic motives of the company manipulated, but this did not
significantly differ the perceived credibility of the company.
In summary:
H5a: The higher the degree of credibility of the company the higher the price the consumer would like to pay for the product in the CRM communication.
H5b: The lower the degree of credibility of the company the lower the price the consumer would like to pay for the product in the CRM communication.
H6a: The higher the degree of credibility of the communication the higher the price the consumer would like to pay for the product in the CRM communication.
H6b: The lower the degree of credibility of the communication the lower the price the consumer would like to pay for the product in the CRM communication.
Figure 2.1 Research framework.
High fit company-cause in the communication
Price willingness to pay Low fit company-cause in
the communication Degree of credibility Company Communication Self-centered motive Other-centered motive CRM domain
3. Data collection and method
In this chapter the methods of this study will be explained in detail with the intention that it is possible to track and replicate the findings, if needed. In this chapter the research strategy, the
population and sample, the independent and the dependent variables, the treatments and the
surveys are addressed.
3.1 Study context and research design
To answer the research question, the research strategy needs to be examined. An experiment is the
most appropriate research strategy to answer the research question of this study. The research
question has a causal relationship with independent and dependent variables. Consequently, an experiment is the purest way to prove this causal relationship, because the outside influences can
be kept to a minimum in an experiment. This is beneficial to the internal validity of the study. The
experiment will be set up at Meesterbakker Roodenrijs. Meesterbakker Roodenrijs is a bakery that sells mainly bread and pastries. The consumers of Meesterbakker Roodenrijs will be asked to participate in the experiment for data collection for the master thesis.
This study will differ from most of the other studies on this subject, because this study will use the Dutch consumers in their sample. The sample frame of this experiment is the consumers of Meesterbakker Roodenrijs. The data will be collected in two of the stores of Meesterbakker Roodenrijs, in Leidschendam and in The Hague. In the experiment a fictive company was introduced in order to eliminate the possibility of pre-existing associations. The name of the fictive company will be 'Bakker Joop'. Furthermore in the CRM communication a product from the existing range of products of Meesterbakker Roodenrijs was chosen, the apple pie (see appendix A). An apple pie was chosen because it is a very popular and well-known product in The Netherlands. Another advantage is that an apple pie is a relatively expensive product of a bakery. In the questionnaire consumers will be asked what they would like to pay for the product in the CRM communication when a percentage of the selling price
is donated to the cause. In case of the apple pie, the response options will have a bigger difference in percentage than with a cheaper product, which makes it easier for the
respondents to choose one of the options. The percentage that will be donated to the cause is set at 25% in this experiment, as this is a realistic percentage in the retail industry.
Furthermore, the type of fit between the company and the cause and the motive of the company to enter in CRM is manipulated in the survey. Therefore there will be six treatments in this experiment (see table 2.1). Respondents are asked to answer questions about the credibility of the CRM company, the credibility of the communication, and the maximum price they would like to pay for the product. Additionally, some demographical questions will be asked in the survey to get a picture of the total sample composition. The questions that will be used during the experiment are listed in Appendix B.
Self-centered motive Other-centered motive No motive mentioned High fit High fit and
self-centered motive
High fit and other-centered motive
High fit and no motive mentioned
Low fit Low fit and self-centered motive
Low fit and self-centered motive
Low fit and no motive mentioned
Table 3.1 Treatments of the experiment.
3.2 Population and participants
The population that will be investigated are all consumers in the Netherlands. This population consists of different sexes, ages and education levels. The decision to conduct this study among this population is because this population is easily accessible: barriers such as language and travel time and costs are reduced. As said before, the sample frame is the
consumers of Meesterbakker Roodenrijs. The consumers of Meesterbakker Roodenrijs will be asked if they would like to participate in the experiment while they are visiting the
3.3 Independent variables
One of the independent variable in this study is the type of fit in CRM communications. In this study the fit will be manipulated, the high fit and the low fit. The high fit cause will be Bake for Life. Bake for Life builds bakeries for young people with disabilities in the third world countries and give them an education to become a baker. A bakery would ensure that their employees have fun in their profession. This has a clear link with Bake for life, which will give people with disabilities fun in the baker profession. The low fit cause will be the Dutch Cystic Fibrosis foundation. The Dutch Cystic Fibrosis foundation is an organization that supports research and it improves services for people with cystic fibrosis. They do this with the aim to contribute to the people's quality of life. A bakery does not have a clear link with doing research and improving services for people with an illness. Therefore there is no clear link between the company and the cause.
Another independent variable in this study is the motive of the company to engage in CSR initiatives. In this study the motives will be manipulated, the self-centered motive and the other-centered motive. The motives that will be used in the different versions of the survey will be the same motives as (Barone, 2007) used in their experiment. The descriptions of the two motives are mentioned in Appendix C.
3.4 Dependent variables
The dependent variables in this study are the WTP for the product in the CRM
communication. The question: 'What is the maximum price you would like to pay for this product?' will be asked to the respondents for measurement. To make this question easier to answer for the respondents, five answer options are given. If this is not done, it might be hard for the respondents to answer this question in a few minutes. This question will measure the consumers' intention about how much they would like to pay for a CRM product.
Another dependent variable in this study is the degree of credibility that will be evoked in the consumer's mind. The degree of credibility will be measured in the
communication itself and in the degree of credibility of the company. At first, we thought of using the measurement of credibility that was prepared by (McCroskey, J. C. and Teven, J. J., 1999), but later on we concluded that this measurement was too vague and too difficult to use in this survey. Therefore we just ask the respondents if they will indicate the degree of
credibility by using a 7-point scale with the dimension not at all credible on the one side and very credible on the other side.
4. Results
After gathering and analyzing the data the hypotheses are tested. In this chapter the sample is
described and results of this study are presented.
4.1 Description of the sample
In total 210 respondents participated in the experiment. The ratio between men and woman is 42,4% and 57,6% respectively. Furthermore is the age of the respondents are between 14 years old and 91 years old with an average age of 52 years. This average age is comparable with the average age of the customer base of Meesterbakker Roodenrijs. The most common highest education level of the respondents is for 13,3% HAVO, 25,7% MBO, 29,0% HBO and 13,8% university. The demographics of the different samples do not differ significantly from each other (see appendix D). This is beneficial for the reliability of the research, because the different treatments are comparable. Finally, the respondents were asked if they knew the exact objective of the research. No one was able to recall this, so therefore this bias will be limited.
4.2 Testing the hypotheses
The first sub-question of the research is if there is a difference in WTP for the product in CRM when companies have a different type of motive to engage in CSR. In the experiment two types of motives are manipulated. To test these hypotheses, treatment one and treatment four will be combined for the other-centered motive (N=70) in version seven, treatment two and treatment five will be combined for the self-centered motive (N=70) in version eight and treatment three and treatment six will be combined for the no motive mentioned (N=70) in version nine. The three samples are normally distributed. The one-way ANOVA test is used to test if there is a significant difference between the motives (SPSS outcomes in appendix E).
The sample with the other-centered motive has a mean of 2,37 (SD=1,119), which means that the respondents will pay a maximum price of € 8,37 for the apple pie. This is 19,5% more than the original price of the apple pie. The sample with the self-centered motive has a mean of 2,14 (SD=0,856), which means that the respondents will pay a maximum price of € 8,14 for the apple pie. This is 16,3% more than the original price. The sample with the no motive mentioned has a mean of 2,34 (SD=1,115), which means that the respondents will pay a maximum price of € 8,34 for the apple pie. This is 19,1% more than the original price. In the mean plot in appendix E the three means are presented. A drop is seen in the average price WTP at the self-centered motive compared to the other motives. Although, these differences are not significant (p=0,366). The maximum price consumers would like to pay for a product in CRM does not differ significantly when the company has different motives to engage in CRM using a significance level of 5%. Using the Bonferroni test to analyze the multiple comparisons (Wallenstein et al., 1980), it can be concluded that there is also no difference between combinations of the different motives. With this test we can conclude that
hypotheses 1a and 1b are rejected.
The second sub-question of the research is if there is a difference in WTP for the product in CRM when there is a different type of fit between the company and the cause. In the experiment is the fit has been manipulated, the bake for life cause has a high fit with bakker Joop and the Dutch Cystic Fibrosis foundation has a low fit with bakker Joop. The independent-sample test is used to test if there is a significant difference between the two types of fit, see appendix E for the output of SPSS. Treatment three will be used for the high fit (N=35) and treatment six will be used for the low fit (N=35). The high fit sample has a mean of 2,57 (SD=1,220), which means that the respondents will pay a maximum price of € 8,57 for the apple pie. This is 22,4% more than the original price of the apple pie. The low fit sample has a mean of 2,11 (SD=0,963), which means that the respondents will pay a
maximum price of € 8,11 for the apple pie. This is 15,9% more than the original price. The differences between the two means is not significant (p=0,087), which means that the
maximum price consumers would like to pay for a product in CRM is equal and does not depend on the type of fit between the company and the cause using a significance level of 5%. With this test we can conclude that hypotheses 2a and 2b are rejected. Although, the
hypotheses should be accepted if the significance level of 10% was observed.
The third sub-question of the research is if there is a difference in WTP for the product in CRM with a high fit between the company and the cause when companies have a different type of motive to engage in CSR. In the experiment two types of motives are manipulated, while the type of fit is the same (the company Bakker Joop and the cause Bake for Life). Treatment one will be used for the other-centered motive (N=35), treatment two will be used for the self-centered motive (N=35) and treatment three will be used for the no motive mentioned (N=35). The one-way ANOVA test is used to test if there is a significant difference between the motives while the fit is the same, see appendix E for the output of SPSS. The sample with the other-centered and a high fit has a mean of 2,23 (SD=1,060), which means that the respondents will pay a maximum price of € 8,23 for the apple pie. This is 17,6% more than the original price of the apple pie. The sample with the self-centered motive and a high fit has a mean of 2,31 (SD=0,993), which means that the respondents will pay a maximum price of € 8,31 for the apple pie. This is 18,7% more than the original price. The sample with the no motive mentioned has a mean of 2,57 (SD=1,220), which means that the respondents will pay a maximum price of € 8,57 for the apple pie. This is 22,4% more than the original price. The differences in the three means are not significant (p=0,398). The maximum price consumers would like to pay for a product in CRM does not differ
significantly when the company has different motives to engage in CRM, while there is a high fit between the company and the cause. Using the Bonferroni test to analyze the multiple
comparisons (Wallenstein et al., 1980), it can be concluded that there is also no difference between combinations of the different motives using a significance level of 5%. With this test we can conclude that hypotheses 3a and 3b are rejected.
The fourth sub-question of the research is if there is a difference in WTP for the product in CRM with a low fit between the company and the cause when companies have a different type of motive to engage in CSR. In the experiment two types of motives are
manipulated, while the type of fit is the same (the company Bakker Joop and the Dutch Cystic Fibrosis foundation). Treatment four will be used for the other-centered motive (N=35), treatment five will be used for the self-centered motive (N=35) and treatment six will be used for the no motive mentioned (N=35). The one-way ANOVA test is used to test if there is a significant difference between the motives while the fit is the same, see appendix E for the output of SPSS. The sample with the other-centered and a high fit has a mean of 2,51 (SD=1,173), which means that the respondents will pay a maximum price of € 8,51 for the apple pie. This is 21,6% more than the original price of the apple pie. The sample with the self-centered motive and a high fit has a mean of 1,97 (SD=0,664), which means that the respondents will pay a maximum price of € 7,97 for the apple pie. This is 13,9% more than the original price. The sample with the no motive mentioned has a mean of 2,11 (SD=0,963), which means that the respondents will pay a maximum price of € 8,11 for the apple pie. This is 15,9% more than the original price. The differences in the three means are almost
significant (p=0,053). The maximum price consumers would like to pay for a product in CRM does not differ significantly when the company has different motives to engage in CRM, while there is a low fit between the company and the cause. Using the Bonferroni test to analyze the multiple comparisons (Wallenstein et al., 1980), it can be concluded that there is also no difference between combinations of the different motives. Although, the difference between the other-centered motive (treatment four) and the self-centered motive (treatment
five) is almost significant (p=0.058), using a significance level of 5%. With this test we can conclude that hypotheses 4a and 4b are rejected. Although, the hypotheses should be accepted if the significance level of 10% was observed.
After testing the first four hypotheses, we can conclude that none of the formulated hypotheses can be accepted. To sum up, the maximum price WTP for a product in a CRM communication will be presented in a plot. The six treatments are presented with the means and their 95% confidence intervals (CI's). It can be concluded that they do not differ
significantly from each other. By testing the other two hypotheses we investigate if the degree of credibility has a role in the relationship between six different treatments and the maximum price WTP for the product in the CRM communication.
Funnel plot 4.1 Mean of the maximum price willingness to pay and their confidence intervals.
The fifth sub-question of the research is if consumers differ in WTP for the product in CRM when the consumer found the company more credible. In the experiment the
participants were asked how credible they found the company bakker Joop. We tested this hypothesis using the regression analysis. Within this analysis we make distinguish between the six versions of the survey. In the table below the most important SPSS output is
1 2 3 4 5 6 7 8 9 10 0 0,5 1 1,5 2 2,5 3 3,5 S a m p le s
summarized. It can be concluded that consumers who have a higher degree of credibility of the company would like to pay a higher price for the product in the CRM communication, only in version 1 (high fit and positive motive) and in version 3 (high fit and no motive mentioned), because they have a p-value lower than 0,05. In the other versions of the survey this is not the case, there is no relationship between the degree of credibility of the company and the maximum price WTP.
Version R² Sig. Version 1 0,252 0,02 Version 2 0,002 0,779 Version 3 0,158 0,018 Version 4 0,000 0,911 Version 5 0,02 0,412 Version 6 0,022 0,392
Table 4.2 Summary of the SPSS output: the correlation analysis.
The sixth hypothesis that will be tested is if consumers differ in WTP for the product in CRM when the consumer found the CRM communication more credible. In the experiment the participants were asked how credible they found the CRM communication of bakker Joop. We tested this hypothesis using the regression analysis. Within this analysis we distinguish the six versions of the survey. In the table below is the most important SPSS output is summarized. It can be concluded that consumers who have a higher degree of credibility of the CRM communication would like to pay a higher price for the product in the CRM communication, only in version 5 (low fit and negative motive), because they have a p-value lower than 0,05. In the other versions of the survey this is not the case, there is no relationship between the degree of credibility of the communication and the maximum price WTP.
Version R² Sig. Version 1 0,01 0,558 Version 2 0,001 0,844 Version 3 0,005 0,678 Version 4 0,4 0,251 Version 5 0,217 0,005 Version 6 0,021 0,403
5. Discussion
In this chapter the findings will be compared with the existing literature. The managerial implications of the results will be clarified and the limitations and recommendations for future research will be explained.
5.1 General discussion
Research has shown that CRM is an interesting manner for companies to engage in CSR. Companies get more favourable publicity, improved public goodwill, greater brand awareness and an increase in sales (Wymer and Samu, 2003). Although this has scientifically been proven, we do not know enough about the role of CSR in consumption decisions of
consumers and we do not know enough about how companies can influence these decisions (e.g. Aguinis and Glavas, 2012; Ellen et al., 2006; Hoek and Gendall, 2008; Mohr and Webb (2005); Mohr et al., 2001; Muller et al., 2013; Oberseder et al., 2011; Pracejus and Olsen, 2004; Samu and Wymer, 2009). Noticeable is that the maximum price consumers would like to pay for a CRM product has barely been researched in the existing literature. With our research we tried to establish if the maximum price WTP is influenced by a few variables, namely type of fit between the company and the cause, the motive of the company and the degree of credibility on the customer's side. The main question is if consumers are willing to pay more for CRM products. Noticeable is that 24,8% of the participants were not willing to pay a premium for donations to charity in our experiment. In the experiment of (Koschate-Fischer et al., 2012) this percentage was much lower, namely 12,6%. An underlying reason for this could be that the consumers have become more price sensitive during the last two years, because of the ongoing financial crisis in the Netherlands or that consumers do not trust companies with their social and responsible actions. Another explanation could be thought that the companies were responsible for the additional costs that they make by engaging in CRM. During the experiment, some participants said that the companies cannot pass these
extra costs to the consumers by increasing the prices, but that the companies must pay these extra costs themselves. To find the underlying explanations for the difference in results between the two studies and to test the possible explanations, there is more research needed. In further discussion, we will discuss the different manipulations that were done during the experiment.
Although the type of fit between the company and the cause has been
researched most in the literature of CRM (e.g., Adiwijaya and Fauzan, 2012; Becker-Olsen, 2006; Barone et al., 2007; Basil and Herr, 2006), there is no unambiguous judgment as to which is the most beneficial for the company. The outcomes of the different studies in the existing literature can be divided into three opinions; the first opinion in the literature is that a high fit between the company and the cause is most beneficial for the company, the second opinion is that a low fit is most beneficial for the company and the third opinion is that the type of fit does not matter in CRM. The results from our experiment suggest that the different types of fit do not influence the maximum price WTP significantly. The outcome of our study is comparable with the studies of (Hoek and Gendall, 2008; Lafferty, 2007; Lafferty, 2009; Moosmaayer and Fuhljan, 2013; Nan and Heo, 2007; Vock et al., 2013). Although, the outcome of our study is comparable with other studies, the company, the causes and the sample are different from the other studies. Neither has this direct relationship (type of fit on the WTP) been researched before. To find out if the type of fit really has no influence on the maximum price WTP, more research is needed.
Besides the result of the type of fit, our research also investigated if the different types of motives to engage in CRM have an effect on the WTP. The main motives to engage in CRM for companies is to achieve business and/or social objectives (Westberg and Pope, 2012; Wymer and Samu, 2003). In our experiment we manipulated these two objectives, with the result that the type of motive from the company does not significantly influence the
maximum price consumers would like to pay for the product. From the existing literature it is known that companies with an other-centered motive will have more positive product
evaluations and more favorable CRM campaign attitudes than when companies have a self-centered motive (Myers et al., 2012; Moosmayer and Fuljahnm 2013). The results of our study are contradicting with these studies. In our study, even when no motive was mentioned the results did not differ significantly of when the company mentioned their motive (other-centered or self-(other-centered). These results suggest that consumers do not base their maximum price WTP on the motive of the company. This is an interesting outcome, because previous research has shown that these attributions certainly do influence the purchase intent (Groza et al., 2011). Besides the fact that the type of motive does influence the purchase intent of the consumer, (Koschate-Fischer et al.,2012) concluded that companies need to focus on the positive attributions of the customer in CRM campaigns, because then consumers have a higher WTP. In view of these studies and our study, we can assume that the motive of the company can influence the purchase intent (Groza et al., 2012), but when people are asked what their maximum price WTP is for the product, the motive does not influence this outcome. Our research extents the existing literature with a more formal empirical
investigation of the concept, thus for providing evidence for the assumption that has been made, more research is needed.
Our findings also verify that the combination between type of fit and the type of motive has an influence on the WTP for the product in the CRM communication. Barone et al. (2007) concluded in an earlier research that when a company has a positive motive, the fit between the company and the cause will have a positive impact on companies evaluations. When a company has a negative motive, the fit has no impact on evaluations. The outcome of this research will suggest that the WTP for the product in the CRM communication with a positive motive will differ significantly depending on the type of fit between the company and
the cause. Contradictory, in our research it is concluded that there was no significant
difference between all the different combinations of motives and type of fit (high-low fit and other- and self-centered motive). These outcomes will suggest that the type of fit and the motive will not influence the WTP. As, the type of fit and the motive of the company separately did not influence the WTP significantly, neither did the different combinations between type of fit and type of motive. As our study is the first study that has measured the WTP in the CRM domain, further evidence of this concept is recommended for
generalization.
A last contribution of our experiment is if the degree of credibility has a role in the relationship between the different treatments (type of fit and type of motive) and the WTP. The degree of credibility within CRM has barely been researched. Therefore, we conducted an additional question in the survey where the participants were asked about the credibility of the company and the credibility of the communication. Our results suggest that there is no significant difference between the treatments in degree of credibility. When we compare this result with the existing literature, the outcome of this research is partly a refutation. The researches of Becker-Olsen (2006); Bigne-Alcaniz et al. (2009); Rifon et al. (2004) concluded that when there is a low fit between the company and the cause, the beliefs about the company are less credible than when there is a high fit. This is contrary to our results. Although, the research of Diepenmaat (2012) is consistent with our results, this research concluded that the type of motive did not differ with the degree of credibility. This is outcome is in line with our results. This study also investigated if the degree of credibility had an influence on the WTP. In general, the results indicated that that there is no significant coherence between degree of credibility of the company and the communication on the maximum price WTP. This will suggest that there is no relationship between the degree of credibility and the maximum price WTP. However, there are three exceptions in our research; in the treatment high fit and
positive motive and in the treatment high fit and no motive mentioned there is a significant coherence between the degree of credibility of the company and the WTP. In the treatment low fit and negative motive there is a significant coherence between the degree of credibility of the communication and the WTP. There is no clear and consistent explanation for these different outcomes between the different treatments of our study. As this is the first research that is focuses on this relationship this outcome cannot be compared with the existing
literature. Therefore it is important that research will collect more empirical evidence on this relationship. With more empirical research it can be concluded if the exceptions in this
research are accidental or not. If these exceptions are not accidental, possible explanations for these exceptions can be investigated in further research.
5.2 Managerial implications
A key goal of our research was to examine the relationship between type of fit, type of
motive, degree of credibility and the WTP for a product in a CRM communication. We found that 24,8% of the participants were not willing to pay extra for a CRM product. Some of them found that companies had to be pay for the extra costs and not the consumer, by
compensating these extra costs in the price. Consequently, our results suggest that a high percentage of the participants are not willing to pay more for a product whereof a percentage is donated to a cause. Therefore, it would be interesting for companies to do research in their market if their consumers are interested in buying a CRM product and if they are willing to pay more for this product.
By identifying the influences of type of fit between the company and the cause, the motive of the company and the degree of credibility on the consumer side, the WTP for the product in a CRM communication is determined. In terms of managerial implications, we can conclude that the type of fit and the motive of the company did not influence the maximum price WTP significantly. Our results suggest that if there is a high fit between the company
and the cause this will not differ from when there is a low fit between the company and the cause. In conclusion, the premium that consumers are willing to pay for a CRM product is not influenced by the type of fit between the company and the cause.
In addition, our results suggest that consumers are not influenced by the motive of the company when they need to determine their premium for the CRM product. Consequently, mentioning the motive of the company for engaging in CRM will not affect the WTP for the product. On the contrary, there is a trend going on among consumers and that is that they would like to know more and more about the company and therefore consumers demand transparency from the companies.
Furthermore, the degree of credibility of the company and the degree of credibility of the communication will not influence the WTP significantly. In our research three treatments were influenced significantly, but as this is the first research and the outcomes do not look very straightforward, we think it is difficult to generalize these outcomes. The results suggest that the combinations between type of fit and type of motive do not arouse a different degree of credibility among consumers.
In conclusion, our results indicate that the WTP for a product in a CRM
communication is not influenced by the type of fit and also not influenced by the motive of the company. Furthermore, the different combinations of type of fit and motive of the
company will not evoke a different degree of credibility among consumers. The consequence is that a higher degree of credibility will not result in a higher price WTP for the product in the CRM communication. To summarize, the type of fit, type of motive and the degree of credibility will not influence the maximum price WTP. Our results indicate that companies will receive the same premium and evoke the same degree of credibility by choosing the cause (high- or low fit) and mentioning the real motive of the company.
5.3 Limitations and further research
The research conducted seems to give a fairly reliable picture of reality. Respondents completed the survey correctly, filled in all the questions, none of the respondents knew the actual purpose of the study and the minimum sample size per treatment was achieved. Although, it is possible that there are limitations to this research which can be improved in future research.
The first limitation of this research is that the intended behavior of the consumer is measured with the WTP and not the actual behavior of the consumers. From research is known that intentions do not always lead to actual behavioral. Therefore, it is valuable to do more research in the actual behavior of consumers, for example by organizing an auction.
The second limitation can be sought in the research location, at Meesterbakker Roodenrijs. This bakery is generally known for their quality and their craftsmanship. This could have an influence on the perception of the respondents by filling in the questionnaire, even when they knew that the questions were about bakker Joop. It can be interesting to test if the outcomes would be the same if this research would be replicated in a laboratory
experiment. On the other hand, the location of this research can be seen as an enrichment of the existing literature. Other studies were mostly held among students and not among consumers in a real-life setting, especially not in a bakery shop. This research area would benefit from extensions that do research in different settings.
The third limitation of this study is the fact that consumers of a bakery are in general willing to pay more for products. The price level of a bakery on average is higher than in supermarkets for example, because of the authenticity and craftsmanship. Consumers of a bakery are more focused on quality on price. Since the consumers of Meesterbakker Roodenrijs are already willing to pay more for bakery products, this can influence the outcome of the research. This outcome could differ when consumers of a standard
supermarket will be asked to participate in the experiment. These consumers could be more price-sensitive and less willing to pay premiums for products.
The fourth limitation in the research could be the product that is used in the survey, an apple pie. It could be that respondents will answer the WTP question differently when a different product is used in the survey, because the used apple pie is relatively low in value. In future research other products can be used in the experiment to investigate if participants pay differently for products in the CRM communication.
The fifth possible error in the research is that there is no distinguish made between the different types of consumers. For example in the research of Vock et al. (2013), they made a distinguish between prosocials and proselfs. Making a distinguish between the different types of consumers can give insight in different attitudes and reactions. Possible explanations for these differences could be tested.
The sixth limitation is the single-item measurements in the survey. All the questions that were asked in the survey had one item. Therefore, measurement of the consistency (Chronbach's Alpha) of the answers was not possible. In this research was chosen for single-item measurements, because of the setting and to minimize the time that was needed to fill in the survey. A very long survey in this experiment would result in an increase in the non-response bias, which is not beneficial for the representativeness of the sample. However, when this research will be replicated in a laboratory setting for example, the participants have more time to fill in the survey. Therefore the questionnaire can be extended with more
questions. For example, multi-item measurements can be used to test the consistency
(Chronbach's Alpha) of the answers of the respondents. Items that are not consistent or items that are seen as invalid afterwards could be eliminated in order to increase the reliability of the measurement. In the end, more reliability of the measurement is positive for the outcome of the research.
The last possible error in the research is the non-response bias. All the visitors of the Meesterbakker Roodenrijs shop were asked if they would like to participate in the research by filling in a survey for the master thesis. Although 210 consumers were willing to participate, many people were not willing to participate in the research. Looking at the number of visitors of the shop at the time that the surveys were taken, the non-response bias can be determined. This non-response bias is 71%. For many people it was not a very suitable time to participate within the research. In general, the more elderly people had time to participate.For this reason, it was decided to stop at 35 respondents per treatment to stick with a good distribution of age. Otherwise there would be too many respondents with an older age, which is not very representative for the total Dutch consumer population. However, 35 respondents for each treatment is not ideal, it is more than the minimum required number of participants per
treatment (N=30). The more participants, the more representative the sample will be. In future research the outcomes will be more reliable and precise when the sample of the experiment is larger than in this experiment.
