Master Thesis
Cause Related Marketing:
Is it only for a good cause?
By: F.G.A Bentelaar
Master Thesis
Cause Related Marketing:
Is it only for a good cause?
By: F.G.A Bentelaar
Student number: 1333453
Supervisors: Drs. J. Berger and Drs. S.T.M. Kremer
University of Groningen
Faculty of Management and Organization
Date of completion: 9 September 2008Summary
Nowadays, an increasing number of companies tries to increase their image within the minds of consumers by linking themselves with causes like the world food program or the red cross. This is what can be called cause-related marketing. The question is whether these companies only do this for the good of the cause. This thesis shows that participating in cause-related marketing does also provide an important benefit for the firm itself. An experiment that was conducted shows that the brand equity of the firm will increase when it is participating in a special type of related marketing, a brand alliance (CBA). This type of cause-related marketing is characterized by a high congruency between the firm and the cause, it is long-term, the amount of resources invested is high, and the management is highly involved. The brand awareness, brand attitudes and the brand loyalty towards the firm are shown to increase. The magnitude of the increase is found to be influenced by the fit between the brand and the cause. Furthermore, A CBA is even found to influence the purchase intentions of consumers in a positive way.
Adjudantstraat 1 6852 PG Huissen 026-3255612
Introduction
People’s faith in firms, and especially large multinationals, has recently been decreasing dramatically. Incidents such as the Ahold, Parmalat and the Enron fraud have made most consumers very skeptic about the good intentions of most companies. For these companies it is important to counter this decrease in faith and make a turnaround. One of the ways to do this, is by showing that they care about the society and its people.
Especially the last couple of years, a lot of companies have been trying to improve their image by showing their social consciousness. Multiple options exist for companies to do so. For example, they can donate a specific amount of money to a good cause, promote a certain cause in their advertisements, host charity donations, involve employees in charity programs or donate an amount of money to a specific cause for every product that is sold.
Together, all these options can be seen as a form of cause-related marketing (CRM). As the name already mentions, this is a way of marketing that uses the affiliation between a company and a certain cause. For example, the struggle against cancer, the fight against poverty or the battle against illiteracy, but also smaller initiatives that serve society (e.g. the creation of football courts in neighborhoods with high poverty). This affiliation is used in the company’s marketing towards the consumer to create a positive feeling towards the company in the mind of the consumer.
American Express may be considered to be the founder of cause-related marketing (Smith & Higgins, 2000). In 1983, the provider of financial services started a campaign to restore the Statue of Liberty. During this campaign, American Express announced that they would donate one cent each time their credit card was used, and one dollar each time a new credit card was issued.
Companies do not only affiliate themselves with causes because they want to do something good for society, but also because it has some positive (side) effect on their business. Increased faith in the company is only one of the effect that is likely to be found. CRM-programs are also said to increases the total brand equity of a company, which can be seen as the effects of marketing that can be uniquely attributed to the brand name (Hoeffler and Keller, 2002). Faith is only a small part of a companies brand equity.
Ever since American Express’ first cause-related marketing campaign, the literature on this phenomenon has progressed exponentially. Although much research has already been done on the relationship between the use of cause-related marketing and a company’s brand equity, no framework has been described which explains this relationship. Such a framework is an important part of understanding the effect of cause-related marketing on the brand equity and it may help a company to create a competitive advantage (Lafferty, 2005).
Literature Review
This literature review will start with an explanation of cause-related marketing, after which a special type of cause-related marketing (the cause-brand alliance) will be explained more detailed. The concept of brand equity will be dealt with at the end of this review.
Cause-related marketing programs
The idea of cause-related marketing is not as old as most of the marketing principles. The first influential article that was published on this subject dates back only to 1988. In this paper, by Varadarajan and Menon (1988), the term cause-related marketing (CRM) is used for the first time. The authors argue that CRM is a marketing tool that is distinct from well-known concepts like sales promotion, corporate philanthropy, and public relations. According to them, CRM can be defined as follows:
“Cause-related marketing is the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives.”
(Varadajan & Menon, 1988, p.60)
Although this definition of CRM is a good starting point, it is too strict and does not capture the different kinds of CRM-programs that have developed ever since. First of all, this definition only considers the contribution of the firm to be monetary. Instead, multiple CRM-programs can be identified that not only contribute in a monetary way, but also in the form of other resources like employee involvement or access to a company’s research facilities and knowledge. For example, Unilever and the World Food Program (WFP) work together to fight world hunger. Within this relationship, Unilever advises the WFP on the subject of nutrition and they share their research facilities with the WFP.
Second, Varadajan and Menon’s definition suggests that CRM is transaction-based. Their definition mentions the donation of a specified amount of money when customers engage in revenue- providing exchanges. For example, the donation of 10 cents by Danone to the Clinic Clowns for every sold package of Danone. Although a lot of CRM-programs are transaction-based, this doesn’t hold true for all of them. Instead of these tactical CRM initiatives, more strategic programs have been developed recently. These programs are not transaction-based and the contribution is not depending on the number of items that are sold. Furthermore, not always a revenue-providing exchange can be identified. A CRM program can also influence the peoples opinion, it can build trust and enhance stakeholders interest in a company.
Cause-Brand Alliances
Varadajan and Menon (1988) acknowledge that CRM can be used either in a strategic or in a tactical way, and that there is much difference within a CRM-programs’ level of association (organizational level, product line level and brand level).
The difference between CRM-programs can be characterized using the following four dimensions (Varadajan & Menon, 1988; van den Brink et al, 2006):
1. The congruence between the cause and a company’s core competency. 2. The duration of a campaign.
3. The amount of invested resources.
4. The degree of senior management involvement.
Fig.1 : Schematic representation of strategic and tactical CRM (van den Brink et al; 2006, p.16)
Figure 1 presents a schematic representation of the four dimensions that decide whether a CRM program is of a more tactical or more strategic nature. This article will focus on a special kind of CRM-program, a cause-brand alliance (CBA). Within the CRM literature not much has been written about this type of CRM-program, but it can be seen as the ultimate form of strategic cause-related marketing.
CBA’s can be seen as programs formed at the organization level, which means that an organization involves all or a number of their brand offerings in the CRM-program (Varadajan and Menon, 1988). Cause-brand alliances are high on all four of the dimensions; having high congruency between the cause and the core competence of the company, the partnership is long-term, the amount of resources invested is high (not only in monetary value), and the management is highly involved. Which results in the following definition:
“A cause-brand alliance is a long-term strategic commitment of a firm towards a specific cause with which it has a high congruency and in which the firm invests a high amount of resources (monetary and non-monetary) and management involvement.”
The reason for focusing on this kind of relationship is twofold. First of all, these cause-related marketing programs are used more and more. Secondly, they are supposed to have a larger effect, compared to tactical cause-related marketing initiatives, on the firms that participate in it. The main reason for this is that these firms show their commitment because the time span of a CBA is for a longer period. Furthermore, consumers are more likely to get to know about a CBA because of the duration and because they are expected to be confronted with a CBA more often. Research needs to be done to support this claim, but this is not within the
Brand Equity
Looking at the literature about brand equity, most authors agree that it can be seen as the effects of marketing that can be uniquely attributed to the brand name (Keller, 1993; Keller, 2003; Yoo & Donthu, 2001). This means that when all things being equal, like price, quality and non-monetary costs, the consumer still has a preference for a certain product because of its brand name.
Within the literature, brand equity has been approached from different angels, but the most commonly used approach is from the perspective of the consumer. Looking at brand equity from the perspective of the consumer is a logical thing to do, because brand equity is all about the consumers choice for a specific product above any other product based on his knowledge about the product and the brand. Keller (1993 & 2003) uses the term “customer-based brand equity” to characterize this approach. He uses the following definition of customer-based brand equity (CBBE):
“Customer-based brand equity can be defined as the differential effect of brand knowledge on consumer response to the marketing of the brand”
(Keller, 1993, p.2) In contrast with the agreement on the definition of brand equity, most authors have different ideas about the conceptualization of customer-based brand equity. Keller (2003) argues that customer based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favorable, and unique brand associations in memory. This means brand equity stems from people’s knowledge about a brand and the image they have of this brand. Aaker (1991 &1996) adds customer loyalty and perceived quality as important parts of brand equity. In his customer-based brand equity pyramid (Keller, 2003), Keller specifies his ideas about brand equity and also includes loyalty, which he views as being part of resonance (figure 2).
Fig.2 : Customer-based Brand Equity Pyramid (Keller, 2003, p.76)
In this thesis, the choice is made to consider customer-based brand equity as consisting of brand awareness, brand attitudes and brand loyalty. Aaker’s (1991 & 1996) perceived quality can be seen as part of the attitudes that a consumer has about a brand. The arrows within figure 2 show the relations between the concepts used within Keller’s customer-based brand equity pyramid and the three concepts that will be used within this thesis.
The link between cause-brand alliances and brand equity
In the article of Varadajan and Menon (1988), a list of goals is given that can be realized through the use of CRM. This list includes the increase in brand awareness, an enhanced or reinforced brand image, a larger amount of repeat purchases, and higher incremental sales. Bergling and Nakata (2005) agree that CRM-programs can help build the brand, help to increase the bottom line, and enhance the corporate reputation. Furthermore, they add that it can generate goodwill, and improve employee morale and retention. In the remainder of this chapter, the general link between cause-brand alliances is discussed first, followed by the relations between the individual variables of brand equity and cause-brand alliances.
The article written by Hoeffler and Keller (2002) can be used as a starting point for analyzing the relationship between a cause-brand alliance and a company’s brand equity. This article suggests multiple hypotheses, all stating that a CRM-program can help build brand equity. This can be done in six different ways, by (1) building brand awareness; (2) enhancing brand image; (3) establishing brand credibility; (4) evoking brand feelings; (5) creating a sense of brand community; and by (6) eliciting brand engagement.
Pracejus and Olsen (2004) agree that brands can associate themselves with some other object (e.g. causes) in order to improve brand performance along some dimension. This leads to the first hypothesis within this article, stating that the formation of a CBA will lead to an overall increase of the customer-based brand equity of the firm.
H1: The formation of a CBA leads to an overall increase in the customer-based brand equity of the participating brand.
Cause-brand alliances and the effect on brand awareness
According to the hypotheses proposed in the article of Hoeffler and Keller (2002), it is expected that a positive relationship between the use of a CRM-program and the brand awareness of the firm that engages in CRM will be found. Brand awareness relates to the strength of the brand node or trace in a memory, as reflected by consumers’ ability to identify the brand under different conditions (Rossiter and Percy, 1987).
It is expected that having an CRM-program will higher the awareness of the firm within the mind of consumers. This effect should especially be true when a CBA is formed. The reason behind this is that the firm is more visible and the consumers pay more attention to the brand. This leads to the following hypothesis:
H2: The formation of a CBA leads to increased awareness towards the participating brand.
Cause-brand alliances and the effect on brand attitudes
One of the most logical and most found reasons for firms to engage in CRM-programs and tie themselves to causes, is to influence the way people think about their firm. They want to change the opinions consumers have about them, and create a better (or different) image. They think CRM-programs change the attitudes consumers have towards the firm and/or the brands. Brand attitude relates to the perceptions about a brand as reflected by the brand associations held in consumer memory (Keller, 1993).
Brand attitudes consist of three important aspects, their favorability, their strength and their uniqueness (Keller, 1993). Favorability relates to consumers’ believe that the brand has attributes and benefits that satisfy their needs and wants. Strength relates to the connection of the attitude to the brand node (the brand or firm). Strength is a function of how much a person thinks about the information and the manner in which a person thinks about the information. Uniqueness relates to the degree to which an attitude is shared with other competing brands. According to Hamlin & Wilson (2004) consumers have powerful associations towards a cause. This may have an immediate effect on how consumers react to the product or organization that associates itself with this cause. Consumers are found to have more favorable attitudes towards brands that are tied to a cause than towards brands that are not (Webb and Mohr, 1998). It is also found that this relationship is more positive for firms that have a CBA (Lafferty and Goldsmith, 2005). The formation of a strategic alliance between a firm and a cause is a long-term commitment, so there is more time for the associations to transfer from the cause to the firm and this will result in the formation of more favorable, stronger and unique brand attitudes:
H3: The formation of a CBA leads to better attitudes towards the participating brand.
Cause-brand alliances and the effect on brand loyalty
Brand loyalty can be seen as the attachment a customer has to a brand (Aaker, 1991, p.39). The nature of the relationship between a customer and the brand, and the extend to which customers feel that they are “in sync” with the brand (Keller, 2003, p.92).
“The biased (non-random) behavioural response expressed over time by some decision-making unit, with respect to one or more alternative brand out of a set of such brands, and as a function of psychological processes.”
(Jacoby and Kyner, 1973, p.2)
Hamlin & Wilson (2004) think that relating a product or organization to a cause may affect the behavior of consumers towards the organization on long-term. Van den Brink et al. (2006) find that brand loyalty is significantly higher for strategic CRM campaigns than for tactical CRM campaigns. This leads to the following hypothesis:
H4: The formation of a CBA leads to an increase in consumers loyalty towards the participating brand.
Brand equity and the effects on consumers’ purchase intentions
The ultimate goal of CRM is enhancing or influencing the purchasing behavior of customers and potential customers. The best predictor for a customer’s purchase behavior is his or her intention to purchase a brand (Ajzen and Fishbein, 1980). Rossiter and Percy (1998) define purchase intentions as the buyer’s self-instruction to purchase the brand (or take other relevant purchase-related action). According to them it is an anticipated, conscious planning of the action step, the final buyer response step.
Research done by Webb and Mohr (1998) found that nearly one third of their sample said that CRM had some impact on their purchases. Baron, Miyazaki and Taylor’s (2000) results support this claim. They found that when brands are viewed as being similar on product features, any competitive advantage in terms of CRM efforts will affect choice. When the brands are different on product features, consumers will base their decision upon the size of the CRM advantage possessed by a brand compared with the size of the differences on the product features.
Hamlin and Wilson (2004) have found that when a firm and cause work together, there is a significant interaction with respect to the intent to purchase. Consumers intentions to purchase the firm’s products will be higher when it is linked to a specific cause. This makes the following hypotheses:
H5: The increased brand awareness for the participating brand leads to higher consumers’ purchase intentions towards the participating brand’s products/services.
H6: The formation of better attitudes towards the participating brand leads to higher consumers’ purchase intentions toward the participating brand’s products/services.
Moderating effects
Within the literature about CRM, multiple moderating effects have been documented to influence the creation of brand equity. Two of these moderators can not be neglected when studying effects of CRM-programs: (1) The fit between the firm and the cause, and (2) the involvement with the product.
1. Fit between firm and cause; The moderator ‘fit’ is borrowed from the literature
regarding co-branding. Also within the CRM-literature, fit is found to play an important role. Varadajan and Menon (1988) define fit as the perceived link between the company’s image, positioning and target market and the cause’s image and constituency. Lafferty (2007) calls it the degree of similarity or compatibility that consumers perceive exists between the cause and the brand. This will also be the definition used within this thesis.
Lafferty, Goldsmith and Hult (2004) are the firsts to research the effect of ‘fit’ within cause-brand alliances. In their article, they identify two kinds of ‘fit’, brand name fit and product category fit. According to their findings, only brand name fit is positively related to attitudes towards the brand and the cause. Gupta and Pirsch (2006) find that ‘fit’ between the company and the cause does not only positively effect attitudes, but it also positively effects purchase intentions.
Hamlin and Wilson (2004) agree that ‘fit’ is important for successful CRM initiatives. They find that it has a significant effect on consumers’ evaluations of the products that carry a cause ‘brand identity’. Lafferty (2007) states that in various research streams in marketing such as brand extensions, co-marketing alliances, sponsorships, and brand alliances, perceived fit generally leads to a positive effect on attitudes. This leads to the following hypothesis:
H3a: The better (worse) the fit between the brand and the cause is perceived, the more (lesser) the formation of a CBA will lead to better attitudes towards the participating brand.
H3b: The better (worse) the fit between the brand and the cause is perceived, the more (lesser) the formation of a CBA will lead to increased purchase intentions.
2. Product Involvement; Product Involvement involves an ongoing commitment on the part of the consumer with regard to thoughts, feelings, and behavioral responses to a product category (Miller and Marks, 1996). It is independent of situational influences. It reflects the perceived relevance of the product category to the individual on an ongoing basis (Quester & Lim, 2003).
Their explanation is that a CRM campaign may not be able to interfere in the relationship between the customer and the product to which this customer is highly involved. For these consumers, the product an brand features are much more important then the connected CRM campaign. This means that following hypothesis will be tested in this thesis:
H4a: The lower (higher) the product involvement, the more (lesser) the formation of a CBA leads to an increase in consumers brand loyalty towards the participating brand.
Conceptual framework
Figure 3 shows the complete conceptual framework that can be constructed when combining the previously mentioned hypotheses. The framework shows the relationships between the formation of a CBA and the customer-based brand equity of the participating firm. It also shows the moderators that are expected to influence some of these relationships. This framework will be tested in the remainder of this article. H1 is not included in figure 3 because it is a general hypothesis that has been researched before. It will only be tested to replicate the results found in other studies.
Fig.3 : Conceptual framework of the influence that the formation of a CBA has on the Customer-based Brand Equity of the participating firm.
Cause-Brand Alliances Consumers’ Purchase Intentions Brand/Cause Fit Product
Research Design
To verify the designed framework (fig.3) and to check the hypotheses, a experiment was conducted and a survey was used to collect the necessary information needed to analyze statistically if the proposed hypotheses could be accepted or should be rejected. The survey was web-based to provide easy access to it by a large amount of people, collect data quickly and keep it low cost (Malhotra 2004). Subjects were invited by e-mail to answer the survey online. Every person receiving this e-mail was asked to send it to as much people as possible, inviting them to answer the survey as well.
The study makes use of an experimental design based on a well-known Dutch butter brand (Brand X) that is going to participate in a Cause-Brand Alliance with Cause Y. Cause Y is a well-know Dutch cause that fights to provide good education to children all over the world. The research design consists of two different stages (pre-exposure and post-exposure toward the cause-brand alliance). Both stages are separated by at least 1 day and no more then 4 days. This research design has been used in several other studies on the subject of cause related marketing and attitudes towards it (Lafferty and Goldsmith, 2005; Lafferty, Goldsmith, Hult, 2004). According to Belch et al. (1987, pp. 103-104) this design permitted an examination of a delayed effect that is a somewhat more realistic reflection of advertising’s effects than a measure taken immediately after ad exposure.
The first stage is used to measure the consumers initial brand-equity towards the brand and introduces the firm’s plans to start participating in a CBA with Cause Y. The second stage is used to see if the consumers’ brand equity has changed since they heard about the CBA between the brand and the cause.
Measurement
During the first stage, the respondents were asked to answer questions relating to the three components of brand equity, their purchase intentions and their product involvement. To measure consumer-based brand equity, a scale developed by Yoo and Donthu (2001) will be used as a base. This scale, presented in appendix A, does not capture the full extent of customer-based brand equity, and therefore some additional questions were used. The questions that relate to perceived quality have been replaced because they do not fully capture the brand attitudes a person has towards a specific brand. Instead, a 3-item scale developed by Osgood et. al. in 1957, is used to measure brand attitudes. This scale has been used multiple times (Burnkrant and Unnava, 1995; Lafferty et. al., 2004 & 2005) and measures brand attitudes on three 5-point scales that best reflect consumers’ attitudes toward the brand. The three 5-point scales consist of the following adjective pairs: “good/bad”, “positive/negative”, and “favorable/unfavorable”. The average of these items represent the attitude toward the brand.
During the second stage the respondents are again answering questions relating to the three components of brand equity and their purchase intentions. They are asked to finish the second part of the survey within 1 to 4 days after completing the first part. Furthermore, respondents are asked to answer questions about their perception of product/cause fit. This will be done using three 7-point scales developed by Lafferty (2007), in which they are asked to judge if the CBA is “very compatible/very incompatible”, “makes sense/doesn’t make sense”, and “very believable/very unbelievable”. The whole questionnaire, including the storyboard introducing the CBA, can be found in appendix B.
Results
A total of 153 respondents answered the questionnaire. Only 114 of the 153 responses were useable, the other responses had multiple missing variables or the second part did not get answered within the timeframe of 1 to 4 days after finishing the first part (N=114). 52% of the respondents were male and the remaining 48% of the respondents were female. The average age of the respondents was 40 years, with the youngest being 19 and the oldest being 73.
CBA and consumer-based brand equity
To test if the consumer-based brand equity will be higher when a firm participates in a CRM-program, a paired samples t-test will be used to compare the means between the pre-test and the post-test. These means are calculated by taking the scores on the different questions relating to the general variables overall brand equity, brand awareness, brand attitudes and brand loyalty. Figure 4 shows the results of the paired samples t-test.
Paired Differences 95% confidence interval of the difference Mean Sig. (2-tailed) Overall Brand Equity -,26754 0,000
Brand Awareness -,20175 0,000
Brand Attitude -,27485 0,000
Brand Loyalty -,26316 0,000
Purchase Intentions -,41813 0,000
Fig.4: Results Paired Samples T-Test difference between pre-test and post-test
Customer-based brand equity and purchase intentions
Looking at figure 4 there seems to be a significant difference (p < 0,05) between the consumers their initial purchase intentions towards the brands’ products, and their purchase intentions after exposure to the CBA. The post-test purchase intentions are 0,42 points higher. There should however be noted that this is on a 7-point scale, while the other attributes were all measured at a 5-point scale. This will probably explain the higher increase after exposure compared to that of the other variables.
To further examine the relationship between the purchase intentions and the customer-based brand equity, H5, H6 and H7 will now be tested. These hypotheses state that an increase in brand awareness, brand attitudes, and/or brand loyalty will lead to an increase in purchase intentions. To test this, for all respondents the increase/decrease between pre- and post-test results is calculated for all variables. Figure 5 shows the correlations (one-tailed) that were found between the increase in purchase intention and the increase of the other variables.
Increase in purchase intentions Correlations
Pearson correlation
Sig. (1-tailed) N Increase in brand awareness ,036 ,352 114
Increase in brand attitudes -,064 ,249 114
Increase in brand loyalty ,160 ,044 114
Increase in overall brand equity ,101 ,142 114
Product involvement -,113 ,116 114
Cause/brand fit ,209 ,013 114
Fig.5: Bivariate correlation (one-tailed)
In contradiction to what was expected, no significant correlation has been found between the increase in brand awareness and the increase in purchase intentions (p > 0,05). Therefore, H5 can be rejected. Also H6, stating that the purchase intention will increase when there is an increase in brand attitude can be rejected (p > 0,05). Only the increase in brand loyalty is found to have a significant correlation with the increase in purchase intentions (p < 0,05), which means that H7 can be accepted. Additionally, the cause/brand fit has been found to have an even stronger correlation with the increase in purchase intentions (p < 0,05).
Because a strong correlation has been found between the cause/brand fit and the increase in purchase intentions, a regression analyses will be done to check whether this correlation influences the outcomes of the other correlations. There does not seem to be a significant linear relationship between the increase in brand loyalty and the increase in purchase intentions (p >0,05). However, when the cause/brand fit is included in the analyses a significant linear relationship is found (p < 0,05), see figure 6. Comparing the Adjusted R Squares of both analyses shows that the model that includes cause/brand fit predicts the increase in purchase intentions better (0,017 vs. 0,067). Including more of the variables that were measured did not yield better results, which is in accordance to the results of the correlation analyses. Appendix D gives the complete output of both regression analyses.
Unstandardized coefficients Standardized coefficients
Model B Std. Error Beta t Sig.
(constant)
Increase in brand loyalty Cause/Brand Fit -,487 ,276 ,160 ,328 ,125 ,060 ,204,245 -1,485 2,209 2,653 ,140 ,029 ,009 a. Dependent Variable: Increase in purchase intentions
This result suggests that the relationship between brand loyalty and purchase intentions is influenced by the perceived cause/brand fit. Therefore, hypothesis 7 can indeed be accepted, but an addition needs to be made stating that the relationship is influenced by the perceived fit between the cause and the brand.
Moderating effect of fit between brand and cause
As was already demonstrated in the previous analyses, a relationship between the formation of a CBA and the creation of brand equity exists. The remaining question is whether or not the relationships that have been found are influenced by other variables. The perceived fit between the cause and the brand has already been found to influence the relationship between brand loyalty and the increase in purchase intentions. The question that remains is whether it also influences the other variables.
Hypothesis 3a states that the better the fit between the cause and the brand is perceived, the more the formation of a CBA will leads to better attitudes towards the brand. To analyse this, the increase in brand attitudes is linked with the perceived cause/brand fit and a correlation analyse was used. Also for the increase in overall brand equity, and the increase in brand awareness and the increase in brand loyalty a correlation analyses was performed to check for additional influences by the perceived cause/brand fit. Figure 7 shows the results of the correlation analyses. Cause/brand fit Correlations Pearson correlation Sig. (1-tailed) N Increase in brand awareness ,103 ,137 114
Increase in brand attitudes ,247 ,004 114
Increase in brand loyalty -,177 ,030 114
Increase in overall brand equity ,272 ,002 114
Increase in Purchase Intentions ,209 ,013 114 Fig.7: Correlation analyses cause/brand fit.
The correlation analyses shows that cause/brand fit correlates with the increase in overall brand equity, as well as with the increase in brand attitudes, and with the increase in purchase intentions. Also a negative correlation is found with the increase in brand loyalty. This correlation wasn’t expected and within the literature no indication has been found that such a relationship between brand loyalty and cause/brand fit exists. The correlation between the increase in brand attitudes and the perceived fit between the cause and the brand, means hypothesis 3a can be accepted. Furthermore, the earlier found influence of perceived fit on the increase in purchase intentions was confirmed and found significant (p < 0.05), so H3b can be accepted as well.
Moderating effect of product involvement
Product Involvement Correlations
Pearson
correlation Sig. (1-tailed) N Increase in brand awareness ,067 ,241 114
Increase in brand attitudes ,071 ,226 114
Increase in brand loyalty -,089 ,172 114
Increase in overall brand equity -,125 ,092 114
Increase in Purchase Intentions -,113 ,116 114 Fig.8: Correlation analyses product involvement.
These outcomes show that there is no significant correlation between a customer’s product involvement and the variables of brand equity. This finding does not support hypothesis 4a and therefore it must be rejected.
Conclusion
The purpose of this article was to further investigate the outcomes for a firm when participating in a cause-brand alliance. This type of cause-related marketing is becoming more popular these day, especially with the customer’s focus on the consciousness of firms.
Firms use cause-related marketing to show that they care. The main question that was raised in this article, was whether or not these marketing tools are only used for the good of the cause, or that the firm is also profiting from these cause-related marketing initiatives.
The main question was answered by conducting an experiment involving a firm that was going to participate in an alliance with a brand (a CBA). A CBA is a form of strategic cause-related marketing, with a high congruency between the cause and core competence of the company, a long-term partnership, a large amount of investments and a highly involved management team (van den Brink et al, 2006). The experiment was to see if the customer based-brand equity (Keller, 1996 and 2003), consisting of brand attitudes, brand awareness and brand loyalty, would be higher after a firm or brand started to participate in such a CBA. The research that was done shows that not only the cause is profiting from the formation of a cause-brand alliance (Lafferty, Goldsmith and Hult, 2004; Lafferty and Goldsmith, 2005), but it shows clearly that also the firm itself profits. The firm’s customer-based brand equity is found to be significantly higher when it’s brand has formed an alliance with a specific cause. The overall brand equity was found to increase with 12,0%, just as all the separate variables which together form the brand equity were found to increase significantly. In this case, the formation of a cause-brand alliance was found to results in a 5,0% increase in brand awareness, a 7,3% increase in brand attitude, a 12,2% increase in brand loyalty, and finally an 11,4% increase in purchase intentions.
Furthermore, the perceived fit between the brand and the cause was found to influence the increase in brand attitude. The research showed that the increase in brand attitudes, after the formation of a CBA, would be higher when the fit between the brand and the cause with which it participates is perceived better. The importance of fit has been proven in many other researches (Varadajan and Menon, 1988; Hamlin and Wilson, 2004; Lafferty, Goldsmith and Hult, 2004) and this research proves it again.
The influence of product involvement, which has been shown to exist in some researches ((Taylor, 1981; Van den Brink, 2006) was not found. It was expected that a higher product involvement would lead to a lower increase in brand loyalty, but no such relationship has been found to exist.
Fig.10: Final framework of the influence that the formation of a CBA has on the Customer-based Brand Equity of the participating firm.
Figure 10 shows the final framework that can be constructed as a result of this experiment. It shows that participating in an alliance with a cause does also benefit the firm. This enables the conclusion that cause-related marketing is not only for a good cause, but it is also for the benefit of the firm itself. It does not only increases the firms attitudes in the minds of their customers, but it also increases the awareness towards the firm and the loyalty of their customers. In the end it leads to significantly higher purchase intentions, a result which every firm wants to achieve.
Cause-Brand Alliances Consumers’ Purchase Intentions Product/Cause Fit + + Customer-based Brand Equity Firm
Discussion
LimitationsAlthough the research within this article has been carried out with much care, there are some things that could improve the results that were found. It would have been better to test the influence of moderators by manipulating the brand and the cause that were used during the research. For example, to test the influence of product involvement, two different CBA’s could have been designed. One including a product that people would be involved with a lot, and the other including a product with which most people would not be involved. Maybe this would lead to the finding of different significant correlations.
Furthermore, the method used for collecting the data is questionable. The use of a web-based survey could distort the generalizability of the results. However, within academic research it is very common and acceptable to use students, or an homogeneous sample, to test theory (Sternthal, Tybout and Calder, 1994). The use of an internet based survey is, in comparison to a student sample, much more heterogeneous. First of all, the spread in age of the subjects is much larger. Furthermore, student samples only represent people with a certain educational level, while a web-based survey is accessible for people from all educational levels. Especially since everyone has access, or is able to get access, to the internet.
Managerial implications
The results of this research clearly show that participating in cause-related marketing has a positive influence on the firm itself. It has been found to improve the firms brand equity and influence the purchase intentions towards their products. For the management of a firm this result is a clear sign to start practicing cause-related marketing. Not only to show that their firm cares about the environment in which they operate, but also because of the benefits that will be delivered to them in the form of higher brand equity and purchase intentions.
Furthermore, the results found show the importance that can be attributed to the choice of a partner to participate with. The fit between the two partners was found to be very important, influencing the increase in brand attitude and the purchase intentions. The management should make sure that the brand and the cause are seen to fit in the eyes of the consumers (or at least in the eyes of the firm’s target group). The management of a specific cause can also use these results to recruit new companies as their partners. The results found during this experiment can be used as an argument to convince firms to support their cause, as it is shown that the firm profits from the formation of a CBA as well as the cause itself.
Directions for further research
For further research, it will be interesting to see how the nature of the relationships that were found will change according to a change in the cause-related marketing program that is used. In the beginning of this thesis it is stated that strategic cause-related marketing has stronger effect compared to the effects that are elicited when a form of tactical cause-related marketing is used. Further research should be done to prove this.
Appendix A – Brand Equity Scale Yoo and Donthu
Ten-item Measure Brand Equity:
Brand Loyalty:
LO1. I consider myself to be loyal to X. LO2. X would be my first choice.
LO3. I will not buy other brands if X is available at the store.
Perceived Quality
QL2. The likely quality of X is extremely high.
QL3. The likelihood that X would be functional is very high.
Brand Awareness
AW2. I can recognize X among other competing brands. AW3. I am aware of X.
AS1. Some characteristics of X come to my mind quickly. AS2. I can quickly recall the symbol or logo of X.
AS3. I have difficulty in imagining X in my mind. (reversed scoring) Four-item Overall Brand Equity:
Overall Brand Equity
OBE1. It makes sense to buy X instead of any other brand, even if they are the same. OBE2. Even if another brand has the same features as X, I would prefer to buy X. OBE3. If there is another brand as good as X, I prefer to buy X.
OBE4. If another brand is not different from X in any way, it seems smarter to purchase X
Appendix B – Questionnaire
Pre-test
A. Overall Brand Equity
1. It makes sense to buy brand X instead of any other brand, 0 0 0 0 0 even if they are the same.
2. Even if another brand has the same features as brand X, 0 0 0 0 0 I prefer to buy brand X.
3. If there is another brand as good as brand X, I prefer X 0 0 0 0 0 4. If another brand is not different from brandX in any way, 0 0 0 0 0
it seems smarter to purchase brand X.
B. Brand Awareness
5. I can recognize brand X among other competing brands 0 0 0 0 0
6. I am aware of brand X 0 0 0 0 0
7. I can quickly recall the symbol or logo of brand X 0 0 0 0 0 8. Some characteristics of brand x come to mind quickly 0 0 0 0 0 9. I have difficulty in imagining brand X in my mind1 0 0 0 0 0
D. Brand Loyalty
13. I consider myself loyal to brand x 0 0 0 0 0
14. Brand x would be my first choice 0 0 0 0 0
15. I would not buy other brands if x is available in the store 0 0 0 0 0
E. Product Involvement
16. Generally, I am someone who finds it important what kind of margarine he or she buys. Strongly disagree 0 0 0 0 0 0 0 Strongly agree 17. Generally, I am someone who is interested in the kind of margarine He or she buys. Strongly disagree 0 0 0 0 0 0 0 Strongly agree 18. Generally, I am someone for whom it means a lot what margarine he or she buys. Strongly disagree 0 0 0 0 0 0 0 Strongly agree
F. Purchase Intentions
How likely is it that you will by Brand X the next time you purchase product A?
19. Very Likely 0 0 0 0 0 0 0 Very Unlikely 20. Definitely would 0 0 0 0 0 0 0 Definitely would
consider it not consider it
Storyboard (Dutch)
Het Merk
Brand X maakt al meer dan 85 jaar producten voor het hele gezin. Al sinds de start van Brand X, is het hun missie om gezinnen en kinderen de broodnodige gezonde vetzuren en vitamines te geven, zodat elk kind gezond kan opgroeien. Brand X is gezond en hoort thuis in een gezonde voeding. Margarine is een belangrijke bron van vitamine A, D en E en onverzadigde vetzuren.
Elke ouder is zich bewust van het belang van goede voeding en nachtrust, maar wat de meeste ouders niet weten, is dat ook de hersenen voldoende moeten worden gevoed. Uit onderzoek blijkt dat kinderen in ons land gemiddeld slechts 30% van de benodigde hoeveelheid DHA binnenkrijgen. En laat DHA nou net een belangrijk vetzuur zijn dat nodig is voor de ontwikkeling van de hersenen.
Om deze reden heeft Brand X een nieuwe halvarine geïntroduceerd: Brand X Idee! Hierin zit o.a. het vetzuur DHA (docosahexaanzuur), dat bijdraagt aan een gezonde ontwikkeling van de hersenen. Onze hersenen zijn immers van groot belang voor de ontwikkeling van cognitieve vaardigheden, zoals luisteren, lezen en onthouden, en sociale vaardigheden, zoals het contact maken met andere mensen en het maken van vriendjes.
De samenwerking met Cause Y
Met de introductie van dit nieuwe product laat Brand X zien dat ze zich niet alleen betrokken voelen bij de gezondheid van kinderen, maar ook bij hun ontwikkeling. Om deze boodschap kracht bij te zetten heeft men bij Brand X besloten om ook die kinderen te helpen die dit het meest nodig hebben. Om dit zo effectief mogelijk te kunnen doen heeft men besloten een
samenwerking aan te gaan met het goede doel Cause Y.
De samenwerking tussen Brand X en Cause Y is gesloten voor een periode van minimaal 3 jaar. Gedurende deze periode heeft Brand X toegezegd zich actief in te gaan zetten voor scholing voor kinderen in ontwikkelingslanden. De samenwerking gaat bestaan uit de volgende onderdelen:
• Een jaarlijkse donatie aan Cause Y;
• Het uitzenden van medewerkers van Brand X om te werken aan de bouw van een school binnen één van de Cause Y projecten;
• Het promoten van Cause Y op haar boterkuipjes en via commercials;
• Het sponsoren van evenementen die Cause Y in Nederland organiseert voor het werven van fondsen en het onder de aandacht brengen van hun zaak (Hierbij kan men denken aan een thema dag op scholen)
• Haar kennis m.b.t. voedsel en voedingswaarde te gebruiken voor het opzetten van voedselprogramma's op scholen (om op deze manier kinderen te stimuleren naar school te gaan)
Cause Y
Storyboard (English)
The Brand
Brand X makes products for the whole family for over 85 years. Since the beginning, Brand X’s mission is to provide families and children with the necessary fatty acids and vitamins, providing every child with the chances to grow up healthy. Brand X is healthy and is an important part of a healthy diet. Margarine is an important source of vitamins A, D and E, and fatty acids.
Every parent is aware of the importance of a healthy diet and a good night’s rest, but most parents do not know that also the brains need to be fed. Research shows that on average our children only get 30% of the needed amount of DHA. DHA is one of the most important acids for the development of our brains.
For this reason, Brand X has introduced a new halverine: Brand X Idea! This new halverine contains the acid DHA (docosahexaanzuur), contributing to a healthy development of the brains. Our brains are of great importance for the development of cognitive skills, such as listening, reading and remembering. Furthermore, they also develop social skills, such as the skill to make friends and make conversations.
The cooperation with Cause Y
The introduction of this new product shows Brand X’s concern with the health of children, but also with their development. To give more power to this message, Brand X decided to help those children that need it the most as well. To do this as efficiently as possible, they decided to cooperate with Cause Y.
The cooperation between Brand X and Cause Y is agreed on for a period of 3 years. During this period, Brand X has expressed their intentions to actively involve themselves to the education of children within developing countries. The cooperation will consist of the following parts:
• A yearly donation to Cause Y;
• The detachment of Brand X’s personnel to a project for the development of a school within one of Cause Y’s projects.
• Brand X will promote Cause Y on their buttercups and within their commercials;
• The sponsoring of events that will be organised within the Netherlands by Cause Y for the recruitment of funds and the creation of awareness for the cause. (For example, a theme day on schools throughout the country).
• Brand X’s knowledge about nutrition will be used for the development of school feeding programs, stimulating children to go to school.
Cause Y
Post-Test
G. Brand/Cause Fit
The partnership between Brand X and Cause Y is:
1. Consistent 0 0 0 0 0 0 0 Not consistent
2. Complementary 0 0 0 0 0 0 0 Not complementary
3. Makes sense 0 0 0 0 0 0 0 Doesn’t make
sense
H. Purchase Intentions
How likely is it that you will by Brand X the next time you purchase product A?
4. Very Likely 0 0 0 0 0 0 0 Very Unlikely
5. Definitely would 0 0 0 0 0 0 0 Definitely would
consider it not consider it
6. Very probable 0 0 0 0 0 0 0 Not very probable
I. Brand Awareness
7. I can recognize brand X among other competing brands 0 0 0 0 0
8. I am aware of brand X 0 0 0 0 0
9. I can quickly recall the symbol or logo of brand X 0 0 0 0 0 10. Some characteristics of brand x come to mind quickly 0 0 0 0 0 11. I have difficulty in imagining brand X in my mind2 0 0 0 0 0
J. Brand Loyalty
12. I consider myself loyal to brand x 0 0 0 0 0
13. Brand x would be my first choice 0 0 0 0 0
14. I would not buy other brands if x is available in the store 0 0 0 0 0
K. Brand Attitudes
Brand X is:
15. Good 0 0 0 0 0 0 0 Bad
16. Positive 0 0 0 0 0 0 0 Negative
17. Favorable 0 0 0 0 0 0 0 Unfavorable
L. Overall Brand Equity
18. It makes sense to buy brand X instead of any other brand, 0 0 0 0 0 even if they are the same.
19. Even if another brand has the same features as brand X, 0 0 0 0 0 I prefer to buy brand X.
Appendix D – Regression Analyses Purchase Intentions
Regression Analyses Brand Loyalty vs. Purchase IntentionsReferences
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