Buying for Charity M A S T E R T H E S I S

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M A S T E R T H E S I S

Buying for Charity

Influence of who is paying for the donation in cause-related

marketing campaigns on consumer perceptions and perceived

organizational trust

by

Ellen Findeisen

Completion Date:

20-06-16

University of Groningen

Faculty of Business and Economics

MSc Marketing Management

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Buying for Charity

Influence of who is paying for the donation in cause-related

marketing campaigns on consumer perceptions and perceived

organizational trust

by

Ellen Findeisen

Author

1

st

_Supervisor

₂

nd

_Supervisor

Ellen Findeisen (S2825260)

dr. M.C. Leliveld

Y. Joye

E.findeisen@student.rug.nl

m.c.leliveld@rug.nl

y.joye@rug.nl

Freiligrathstr. 3

Nettelbosje 2

65812 Bad Soden

9747AE Groningen

Germany

The Netherlands

+49 6196 26788

+31 50 363 3226

+31 50 363 7065

MASTER THESIS

Completion Date:

20-06-16

University of Groningen

Faculty of Business and Economics

MSc Marketing Management

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Preface

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Abstract

Consumers increasingly doubt the authenticity of cause-related marketing campaigns. They suspect the increase of companies’ marketing performance to be the prime intention of these campaigns, which consequently triggers negative consumer perceptions of companies. This study shows that different versions for the cause-related donations influence these perceptions and more specifically, several components of consumers’ perceived authenticity and trust (i.e. integrity, benevolence and expertise trust). I expected that objective trust gained through previous experience with a company could cloud the effects of who is paying for the CM campaign. Therefore, this study also investigated whether objective trust moderates the effect of the cause related marketing campaign on authenticity and the perception of trust. Findings show that when consumer’s need to pay extra for a cause-related marketing donation, and thus pay for the costs of the campaign, their perceived trust and authenticity of the company decreases and is lower than when the company pays for it. Results also show that objective trust based on previous experience with a company has a significant effect on authenticity and the perceived consumer integrity, benevolence and expertise trust of the company. Trust only moderated the relationship between the cause-related marketing campaign and authenticity, but not the relationship between the cause-related marketing campaign and perceived integrity, benevolence and expertise trust.

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Tables of Content

PREFACE ... 3

ABSTRACT ... 4

INTRODUCTION ... 6

THEORETICAL FRAMEWORK AND HYPOTHESIS ... 8

CM CAMPAIGNS AND THE PERCEPTION OF TRUST IN COMPANIES ... 8

INTEGRITY, BENEVOLENCE AND EXPERTISE TRUST ... 8

CONSUMER PAYS VS. COMPANY PAYS ... 10

HIGH AND LOW OBJECTIVE TRUST IN A COMPANY AS A MODERATOR ... 13

CONCEPTUAL MODEL ... 15

METHODS ... 16

THE INDEPENDENT VARIABLE:CMCAMPAIGN ... 16

THE MODERATOR:OBJECTIVE TRUST ... 16

THE DEPENDENT VARIABLE:TRUST COMPONENTS ... 17

Reliability of scales for each trust component ... 18

Factor Analysis for trust components ... 18

THE DEPENDENT VARIABLE:AUTHENTICITY ... 19

Reliability of Scales for authenticity ... 19

RESULTS ... 20

EFFECTS OF THE GENERAL MODEL ... 20

EFFECTS ON BENEVOLENCE TRUST ... 21

Main Effect of CM campaign ... 21

Main Effect of objective trust ... 21

EFFECTS ON EXPERTISE TRUST ... 21

EFFECTS ON INTEGRITY TRUST ... 22

EFFECTS ON AUTHENTICITY ... 23

INTERACTION EFFECT BETWEEN CM CAMPAIGN AND OBJECTIVE TRUST ... 24

DISCUSSION ... 25

CONCLUSION ... 26

CONTRIBUTIONS, LIMITATIONS AND FUTURE RESEARCH ... 28

REFERENCES: ... 30

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Introduction

Many companies engage in Corporate Social Responsibility (CSR) activities nowadays. For example, they increasingly execute cause-related marketing (CM) campaigns, which involve a donation by their for-profit organization to a non-profit organization, for each product that is being purchased (Moosmayer, 2010). To be more specific, CM is referred to as “the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchange that satisfy organizational and individual objectives” (Varadarajan & Menon, 1988, p.60). A typical example for a CM campaign was Dannon’s yoghurt line for children called ‘Dannon Danimals’, in which the company made donations to the National Wildlife Federation. Specifically, they donated 1.5 percent of the price of each container sold (Cohen, 2011). These types of campaigns seem very beneficial to all parties involved. First, the sales of the for-profit organizations (FPO’s) rise. Second, the non-profit organization (NPO) receives money from the sales generated by the FPO. And third, the consumer benefits from a good feeling about their social behavior (Svensson & Wood, 2011), which can also be referred to as ‘warm glow’ (Andreoni, 1990;

Cialdini, Schaller, Houlihan, Arps, Fultz & Beaman,

1987

). In conclusion, CM campaigns seem to be a win-win-win situation for FPO’s, NPO’s and the consumer.

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trusted? When companies host a CM campaign, consumers can assume that the companies will also pay for the campaign. However, sometimes companies increase the price of the products in order to avoid additional costs for the campaign. Such cases raise the question: To what extent can companies genuinely say that their campaign is cause related?

This study will extend the findings of Webb & Mohr (1998) by conducting quantitative research. It will investigate how consumers feel about paying extra for the donation of a CM campaign, and thus carrying its costs, instead of the company paying for it. Subsequently, this analysis will focus on the dimension of high versus low objective trust in a company, and how that factor might influence the negative consumer perception of a situation in which consumers need to pay extra for the CM campaign.

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Theoretical framework and hypothesis

CM campaigns and the perception of trust in companies

Understanding the effects of CSR activities is crucial for marketing managers because they are considered “investment decisions”, which means that companies engaging in CSR will have to consider and manage higher costs in the hope of higher returns (McWilliams & Siegel, 2001). On top of the expected financial cost and/or revenue effects, CSR activities will impact the perceived trust in the company, which consequently influences its reputation and therefore cannot be neglected (Park, Lee & Kim, 2013). CSR campaigns typically help to increase the trust in companies (

Castaldo, Perrini, Misani & Tencati, 2009

). Trust leads to an improvement of relationship marketing, which comprises all marketing activities that intend to establish and maintain “successful relational exchanges” between a company and, in this case, the consumer (Morgan & Hunt, 1994, p.34). Park, Lee & Kim (2013, p. 296) define trust from a consumer perspective as “the consumer’s belief that a company will perform in a manner consistent with the expectations regarding its expertise, integrity and goodwill”. In other words, they argue that there are three components of consumer trust. They also find that benevolence trust – which can be considered as goodwill – and integrity trust are fostered and influenced by philanthropic and ethical CSR activities. To put it differently, CSR activities like CM campaigns thus lead the consumer to believe that the company lives up to high ethical standards and that it is concerned about the well-being of society (Park et al., 2013).

Integrity, benevolence and expertise trust

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population expressed their reasons for trusting or distrusting businesses (cf. App. A1): 59% stated that trust increases when the company is successful and grows, which emphasizes a trust domain closely related to the company’s expertise. 45% mentioned benevolent reasons for their trust increase in a business, namely when the company contributes to the greater good. 50% state their reason for an increase of distrust as the company’s failure to contribute to the greater good (Edelman Trust Barometer, 2016). In sum, this paper will examine whether the effect of the CM campaign on the three trust-components (integrity, benevolence and expertise) differs.

The first trust component that will be explained in this section is integrity trust. Park, Lee and Kim (2013) confirm integrity as a crucial part of trust. It means that the consumer perceives the firm to show coherent behavior with the values it has laid upon itself and executes and engages in an appropriate amount of fairness that can be expected of companies (Mayer, Davis & Schoormann, 1995). According to Ingenhoff & Sommer (2010, p.341) integrity is defined “as the perception of the trustee as having a strong sense for justice and acting according to it”. By demonstrating ethical and legally correct behavior, companies can increase their integrity trust Park, Lee & Kim (2013). Aaker, Vohs & Mogilner (2010) refer to integrity trust as “warmth” which means that a firm acts in the consumers and employees best interest by treating them fairly. The second component of trust is benevolence trust. Benevolence trust is referred to as the consumer’s perception of companies to genuinely care about the society’s well-being by engaging in its maintenance (Mayer, Davis & Schoormann, 1995). Furthermore, it indicates that companies do not only focus on their own benefits but rather show true intentions to do good (Ingenhoff & Sommer, 2010). This trust develops when consumers evaluate CSR activities and motives of companies as positive and authentic Park, Lee & Kim (2013).

The final trust component that is clarified in this section is expertise trust. Expertise trust can be explained as the consumer’s perception that companies are competent and have all the necessary resources in order to provide the consumers with products “that [are] able to perform necessary business functions effectively” (Mayer, Davis & Schoormann, 1995, p.718). The level of company-performance that confirm or disconfirm consumer’s expectations, influences the level of expertise trust that the consumers have (Park, Lee & Kim, 2013). Companies that represent good investment opportunities by creating value and delivering high quality increase their level of perceived competence (Aaker, Vohs & Mogilner, 2010), which can also be understood as expertise trust.

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the support of a social cause and 2) the increase of the products performance (Varadarajan & Menon, 1988). Van de Brink, Odekerken-Schröder & Pauwels (2006) refer to this as intrinsic and extrinsic motivation. On the one hand, intrinsically motivated companies consider a CM campaign as rewarding in itself and are therefore often perceived as altruistic. On the other hand, extrinsically motivated firms are considered egoistic and self-centered because they tend to look for rewards in their environment (Van de Brink, Odekerken-Schröder & Pauwels (2006). Fine (1990) states that the majority of companies mainly aim at improving the marketing performance with CM campaigns, rather than being intrinsically motivated. On top of that, companies that engage in CM campaigns intend to benefit from an image transfer from the NPO, which consequently leads to a better evaluation of the product and of the company’s behavior (Du, Hou & Huang, 2008). When companies’ motives for campaigns are perceived as profit driven, consumer responses to the CM campaign are likely to be more negative. Also, skepticism towards these campaigns amplifies the negativity of consumers towards the campaigning companies (Webb & Mohr 1998). The potential abuse of CM campaigns by companies consequently generates massive criticism by consumers (Varadarajan & Menon 1988).

In sum, it is noticeable that even though much literature has considered trust as a singular dimension, an increasing amount of literature disentangles trust into multiple components and provides sufficient evidence for the foundation of this paper. Moreover, this paper adds to current research on the multi-dimensional construct of trust, by examining that the influence of a CM campaign on trust may differ depending on which trust component is considered. As trust is necessary for a CM campaign to be successful, it is essential for the CM campaign to be perceived as non-exploitative and genuine (Webb & Mohr, 1998). This leads me to raise the question whether companies are also considered non-exploitative and genuine when they make the consumer pay extra for the CM campaign? More specifically, how is a consumer’s trust affected when the company increases the price of a product as the CM campaign is launched?

Consumer pays vs. company pays

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(McWilliams & Siegel 2001). In other words, companies have to invest money to launch the CM campaign and consequently hope for more revenues due to the effects that this CM campaign has on consumers’ buying behavior. A company can choose to increase the price of the product in order to recover the costs incurred by the CM campaign. Translated to the context of this study this means that consumers, who are paying for the now more expensive product, finance the CM campaign. Alternatively, companies may choose to pay for the campaign themselves without raising prices. Whichever pricing model a company chooses, consumers’ perceived trust may be impacted differently.

After having explored the options for company’s regarding different CM campaign payment versions, it is crucial to become a more refined understanding of the consumer’s perspective regarding this issue. Therefore, the question needs to be raised once more: What makes consumers perceive a CM campaign as non-exploitative and genuine and thus, leads them to choose a CM product over a normal product? When people make these choices, they primarily consider their identity and tend to act in line with the norms on which this identity is based (Gneezy, Imas, Brown, Nelson & Norton, 2012). More importantly, the Moral Self Image (MSI) defined as “a person’s dynamic and malleable moral self-concept” (Jordan, Leliveld & Tenbrunsel, 2015, p.3), explains how a person’s perceived morality influences subsequent behavior. To be more specific, the MSI drives the moral behavior that people execute, both in positive and negative directions. In this regard, a distinction seems appropriate between a person’s moral identity and the MSI. While moral identity is a trait that is considered stable over time (Aquino, Freeman, Reed, Americus, Lim & Felps, 2009), the MSI tends to be responsive to moral events (Cornelissen, Bashshur, Rode & Menestrel, 2013). Thus, a person’s past or expected future moral behavior influences the MSI (Jordan, Leliveld & Tenbrunsel, 2015). For this reason it can be assumed that people donate money in order to feel better about themselves; i.e. to increase their MSI. This leads me to raise the question: Are consumers willing to contribute money themselves?

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behavior does not come at a cost (Gneezy et al., 2012). Likewise, the assumption that people are willing to contribute may be explained by Piliavin, Dovidio, Gaertner & Clark’s (1981) economic view on people’s intentions. It states that people intend to minimize their costs and simultaneously maximize their rewards. Thus, the costs incurred by the product’s price increase may be perceived as comparably low in relation to their subsequent rewards, namely the product itself and the good feeling people have about themselves.

Nevertheless, it is important to note that “costly prosocial behavior” Gneezy et al. (2012, p.179) would imply that consumers pay for the donation of the CM campaign, which was initiated by the company. This would confirm the earlier reviewed consumer expectations, whereby companies’ motives for a CM campaign are likely to be profit driven, i.e., externally motivated (Fine, 1990). Consequently, this leads the consumer to perceive the company as exploitative, because they pretend to be moral while actually being self-interested (Webb & Mohr, 1998). Varadarajan & Menon (1998, p.69) support this view by emphasizing that “firms walk a fine line between reaping […] goodwill and positive publicity, and incurring negative publicity charges of exploitation of causes.” Thus, firms should make sure that the CM campaign enriches the cause, not abuses it (Webb & Mohr, 1998). Besides the negative attitudes that consumer-contributions to a CM donation cause, Lilley & Slonim (2013) found that monetary donations drop significantly, the higher the price is for a donation. Furthermore, Polonsky & Wood (2001) found that due to the large number of CM campaigns and the ease of switching brands that also execute CM campaigns, consumers are not prepared to contribute additional money to support a social cause. To conclude, consumers seem to prefer supporting social causes in which they don’t have to pay additional money. This leads me to the assumption that consumers will most likely react negatively when they need to pay for the CM donation themselves, which could have a negative effect on trust in this brand and/or company.

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ideal situation the mentor influences the pupil’s career positively and gives guidance to a maximum extent. But from which point on does the pupil trust the mentor? A mentor with a proven track record of investing in positive relationships with others, who communicates honestly and seems to be honorable in general, would be perceived as having high integrity. But if he doesn’t have the fundamental capabilities and knowledge to help the pupil succeed, high ratings on the integrity continuum are insufficient for the pupil to build trust in his mentor (Mayer, Davis & Schoormann, 1995).

In a similar vein, whether consumers trust a company thus depends on the individual examination of each component: Integrity, benevolence and expertise (Mayer, Davis & Schoormann, 1995). It can be expected that each component is influenced differently by the consumer’s need to pay for a CM donation. For example expertise trust will most likely be less negatively affected, if at all, than benevolence and integrity trust. According to Mayer, Davis & Schoormann (1995) the nonexistence of opportunistic behavior is a prerequisite for goodwill and contractual trust, which in this paper is referred to as benevolence and integrity trust. Having consumers pay for the campaign, while benefitting from the increased marketing performance, can be perceived by consumers as precisely that, an opportunistic action, which would consequently mean that benevolence and integrity trust will be damaged.

Therefore I hypothesize:

H1.1: When consumers need to pay for the CM donation, instead of the company, the perceived integrity trust of a company is lower.

H1.2: When consumers need to pay for the CM donation, instead of the company, the perceived benevolence trust of a company is lower.

H1.3 The perceived expertise trust of a company does not change when consumers need to pay for the CM donation in comparison to a situation in which the company pays for it.

High and low objective trust in a company as a moderator

I assume that when a company is taking unreasonable advantage of its consumers, the integrity and benevolence trust will suffer severely. When this happens, the question is, how can this damage be contained?

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consumers at a desirable level (Morgan & Hunt 1994), and successfully rebuilds relationships (Bandsuch, Rao & Glynn, 2008) once they have been damaged. Objective trust can be understood as the trust between two parties that exists due to previous experiences between them (Witkowski, Artikis & Pitt, 2001) and is based on the interpretation of the opponent’s past actions (Dirks & Ferrin, 2001). In the following the paper will elaborate more on the independent variable of objective trust (high and low level of trust), which may impact the previously mentioned dependent variable (perceived trust components: integrity, benevolence and expertise).

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H2: High trust in companies can dampen the negative effect on company evaluation when it lets consumers pay for the donation.

H3: A CM donation for which the consumer has to pay extra confirms the negative expectations regarding the company and amplifies the low attitudes towards it.

Conceptual Model

The present study aims at finding out how people react to different types of CM campaigns and whether trust plays a role in this relationship. More specifically, this study will give and understanding of how consumers perceive trust differently when they either have to pay extra for the CM donation or when the company pays for the CM donation. In addition this study will indicate whether objective trust that consumers developed from previous experiences with the company, changes the previously mentioned relationship between CM campaign and trust components.

Figure 1 Conceptual Model

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Methods

In order to test the hypothesis, an online survey with 209 participants was conducted which examined the change in consumers’ trust perception due to the CM campaign. The respondents’ task was to answer a number of survey questions, upon completion of which they received a compensation of $0.45. Only after the participants had agreed to the terms of the provided consent form, could they continue with the survey. After the campaign and company descriptions were shown in a randomized order, the participants needed to provide input to a series of seven-point Likert scale ratings (1=strongly disagree, 7=strongly agree). Find the entire survey in the Appendix 2-6. In order to examine whether the respondents had understood the content of the manipulation, a manipulation check was integrated in the survey. Results showed that 40 people in the company-pays condition and 13 people in the consumer-pays condition failed this manipulation check. For this analysis these 53 respondents were eliminated from the data set in order to exclusively consider results of people who had completely understood the manipulation.

The Independent Variable: CM Campaign

The independent variable of this study is the CM campaign, which comprises two levels namely, (1) consumer-pays CM campaign and (2) company-pays CM campaign. As a product for the CM campaign a basic white candle was chosen, because people are familiar with the product, but it is assumed that the general public is not able to relate sufficient brand knowledge to it in order to form a pre-conceived subjective opinion. This is necessary to direct focal attention to the CM campaign as such. Respondents were presented with, and randomly assigned to, two types of CM campaigns (cf. App. A3). In both campaigns the company donated money to the non-profit organization UNICEF. Both campaigns were manipulated in their price presentation. In one campaign the price for the candle was $1.95 and in the other one, the original price of $1.85 was crossed out and the new price $1.95 printed next to it. Moreover, a fictitious design of the candles and their packaging was displayed. Participants were randomly assigned in a between subject design to one of the two different CM campaign conditions.

The Moderator: Objective Trust

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designed on the basis of three out of four of Sichtmann’s (2007) characteristics that make up trust, namely: Reliability, trustworthiness and responsibility. One is described as highly trustable and the other one as extremely untrustworthy (cf. App. A2). I chose not to use existing companies for this study, to avoid confounding effects that could have been caused due to respondents’ subjective opinions about either company. This could consequently distort the outcome of the study. Again, the participants were randomly assigned in a between subject design to one of the two different trust level conditions.

The Dependent Variable: Trust Components

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Reliability of scales for each trust component

The correlation analysis showed that all four questions for each of the trust components had a significant relation among each other and were reliable (results can be found in table 1). Thus, the items were computed into the following three variables: “Benevolence Trust”, “Expertise Trust” and “Integrity Trust”.

Reliability of Scales Number of items Range of Correlation p-value Cronbach's Alpha Benevolence Trust 4 .670 - .826 .000 .929 Expertise Trust 4 .521 - .883 .000 .892 Integrity Trust 4 .801 -.860 .000 .949 Table 1 Reliability of Scales for each trust component

Factor Analysis for trust components

In order to further validate the distinction between the three trust components a factor analysis was performed. Results of one outcome measure clearly indicated that three components are most appropriate and thus, supported the theoretical framework of this study. However, the results of two other measures indicated that the three components should be comprised to one singular component. Also, the correlation analysis showed that all three components had a significant correlation among each other and were reliable (results can be found in table 2).

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The dependent variable: Authenticity

As I have put much emphasis on the question under which circumstances consumers perceive companies and CM campaigns as non-exploitive and genuine, I decided to include another dependent variable regarding these characteristics for exploratory reasons into this study. The variable was computed of nine attributes that all relate to the “authenticity” of a company, i.e. authenticity, consistency, sincerity, credibility, genuineness, non-deceitfulness, trustworthiness, non-exploitiveness and non-hypocrisy. Each attribute was examined according to the participant’s perception of the company and was rated on a seven-point Likert-scale from 1 = “I totally disagree” to 7 = “I totally agree”. In order to validate that the attributes can be combined, a factor analysis was performed. Results of four different measures clearly showed that the attributes can be computed into one variable.

Reliability of Scales for authenticity

The correlation analysis showed that all nine attributes had a significant relation among each other and were reliable (results can be found in table 3). Thus, the items were computed into the variable “authenticity”.

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Results

156 American respondents from the Mechanical Turk (Mturk) sample participated in the survey (Mage= 33,73 SD=11,15; 106 male (67,9%), 50 female (32,1%)). As mentioned already in the

method section, people that failed the manipulation check were eliminated from the data set.

Effects of the general model

In order to examine whether the degree of benevolence, expertise and integrity trust varies according to different CM campaigns, a Multivariate Analysis of Variance (MANOVA) was performed. Results showed that the main effect for the CM campaign on the perceived trust components was significant (F(3,150) = 6.16 p = .001). The main effect for the objective trust on the trust components was also significant (F(3,150) = 25,17, p = .000). However, the interaction effect between the CM campaign and objective trust was not significant (F(3,150) = .591, p = .622). In other words, there are significant effects of different CM campaigns and the objectivity of the company on integrity, benevolence and expertise trust. However, there does not seem to be a significant interaction between CM campaign and consumers objective trust towards the company. Below, I will report these effects in more detail and the results are indicated in figure

0 1 2 3 4 5 6

Benevolence Trust Expertise Trust Integrity Trust

Mean Values of different CM campaign types

Consumer Pays Company Pays

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In order to find out whether authenticity is significantly affected by objective trust, the direct effect in the univariate analysis was inspected.

0 1 2 3 4 5 6 Authenticity

Mean Values of different CM

campaign types

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Figure 5 Mean Values of Objective Trust

As indicate in figure 5, results showed that objective trust had a significant effect on authenticity (F(1,152) = 54.41, p = .000). Participants perceived lower authenticity (M = 3.25, SD = 1.41) when objective trust was low than when objective trust was high (M = 5.08, SD = 1.63).

Interaction effect between CM campaign and objective trust

In order to find out whether authenticity varies when influenced by the CM campaign and moderated by objective trust, the interaction effect in the univariate analysis was inspected.

Figure 6 Mean Values of Interaction Effect

As indicated in figure 6, results of the univariate tests showed that the interaction effect between the CM campaign and objective trust was significant (F(1,152) = 5.20, p = .024). When consumers have to pay extra for the CM campaign, consumers perceive the company as more

0 1 2 3 4 5 6 Authenticity

Mean Values of different

Objective Trust Levels

High Objective Trust Low Objective Trust

0 1 2 3 4 5 6 7

Consumer Pays Company Pays

Mean Values of Interaction

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authentic when they have high objective trust in the company (M = 4.58, SD = 1.63) than when their objective trust is low (M = 3.05, SD = 1.50). When the company pays for the CM campaign consumers perceive the company as more authentic when the consumers have high objective trust in the company (M = 6.15, SD = 1.05) than when the objective trust is low (M = 3.49, SD = 1.27).

Discussion

This paper aims at presenting a more refined understanding of the effect of CM campaigns on the consumer perceptions regarding trust and authenticity, by (1) differing between CM campaigns in which the consumer pays extra and CM campaigns for which the company pays, (2) distinguishing between integrity, benevolence and expertise trust and (3) considering objective trust towards a company as a moderator. Regarding the direct effect of CM campaigns on trust components (hypothesis 1), results show that all three trust components, i.e. integrity, benevolence and expertise trust are significantly influenced by the CM campaign, which is in line with findings of Castaldo et al. (2009) and Park Lee & Kim (2013). To be more specific, integrity, benevolence and expertise trust are all higher when companies pay for the CM campaign, than when consumers were asked to pay extra for the donation, thus confirming hypothesis 1.1 and 1.2., which is in line with Gneezy et al.’s findings regarding “costless prosocial behavior”. This also shows that the overall perception of trust is higher when companies pay for the CM campaign, and thus hypothesis 1 can be confirmed. In a similar vein, Vaidyanathan & Aggarwal (2005) showed that when companies paid for the CM campaign, the willingness to buy among consumers was higher than when consumers had to pay. Consumer’s general, objective trust in companies did not change the main effect of CM campaigns on perceived trust components, because the interaction between the CM campaign and the objective trust was insignificant. However, objective trust in companies had an impact on integrity, benevolence and expertise trust directly and significantly. To be more specific, a high level of objective trust will positively change the integrity, benevolence and expertise trust in companies, which is in line with Mayer, Davis & Schoormann’s (1995) findings.

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campaign for which consumers need to pay extra had on perceived authenticity. To put it differently, authenticity is perceived higher when consumers have to pay extra for the CM campaign and they have high objective trust in the company, than when their objective trust is low. The same applies for CM campaigns that are paid for by the company. To be more specific, authenticity is perceived higher when the company pays for the CM campaign and they have high objective trust in the company, than when their objective trust is low.

Different from the hypothesis that expertise trust remains unchanged, all three trust components, including expertise trust, were higher when the company rather than consumers paid for the CM campaign. Thus, hypothesis 1.3 needs to be rejected. The view of many researchers regarding trust as a multi-dimensional concept (e.g. Mayer, Davis & Schoormann, 1995), seemed logical during the conceptualization of this study. I conceptualized trust in a similar vein, as to my knowledge it has never been studied in relation with CM campaigns. However, an explanation for the reverse finding could be that trust is sometimes considered a “global, unidimensional construct” (Park, Lee & Kim, 2012 p.295) as also referred to by Castaldo et al. (2009). This explanation can be supported by results of the factor analysis performed as part of this study, which indicates that the three trust components should be combined into one single factor. The findings regarding the insignificant interaction effect prove that objective trust does not act as a moderator in the relationship between the CM campaign and trust components. Therefore, hypothesis 2 and 3 could not be confirmed, due to insignificance. This may explain why less than 10% of the empirical studies that research the consequences of trust have considered trust as a moderator compared to studies that consider trust as a main effect (Dirks & Ferrin, 2001).

Conclusion

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scales” by reducing the vagueness when examining the motives of the counterpart’s past or future behavior (Dirks & Ferrin, 2001, p.461). Applied to this study, Dirks & Ferrin’s (2001) findings would suggest that objective trust is not acting as a moderator because the relationship involves a stronger and/or weaker determinant for the perceived trust components. This suggestion can be supported by findings of this study, as results indicate a significant main effect of CM campaigns on trust components, which implies that the influence is very strong. In other words, the CM campaign acts as a very strong cue, one that impacts the perception of integrity, benevolence and expertise trust enough to neglect objective trust in its evaluation. Therefore objective trust does not moderate the relationship.

Interestingly, objective trust serves as a moderator by influencing the relationship between CM campaign and authenticity. As the only differences between the models are the different dependent variables (trust components versus authenticity), the explanation must lie in their relationship with the CM campaign. Again, trust only serves as a moderator in situations that are neither strong nor weak (Dirks & Ferrin, 2001). Opposing to the solution found for the previous model, i.e. that the CM campaign gives a strong indication on how to evaluate the trust components, in this model the CM campaign may only provide a moderate indication on how to perceive the company’s authenticity. A reason for this could be that authenticity is an “interpretation of what is observed” (Beverland, 2005). As it can be assumed that the involvement for buying a candle (the product that was used for this study) is rather low, the given information on the package is only processed peripherally (Hoyer, Maclnnis, Pieters, 2012). Peripheral information processing is not sufficient for an interpretation of the CM campaign and thus, a clear evaluation of authenticity is not possible. In other words, the CM campaign is not a strong enough cue to indicate the level of authenticity. Nevertheless, the information about the CM campaign is processed peripherally, and thus the cue is not weak either. As the cue cannot be considered strong or weak, a moderation through trust is possible (Dirks & Ferrin, 2001). To sum up and to answer the earlier raised question: The CM campaign is a strong enough cue to determine the perception of the trust components, which is why objective trust is irrelevant for this evaluation. When determining authenticity, the CM campaign alone is not strong enough for such a clear indication, which is why also objective trust is moderating this relationship

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cognitive dissonance found that when a subject is exposed to two contradictory cognitions, he will experience “a state of aversive motivational pressure” which he aims to escape by modifying one of the two “dissonant” cognitions (Festinger, 1957, p.15). When consumers have to pay extra on the one hand but simultaneously have high objective trust on the other hand, “dissonance” is caused, as both factors contradict each other. Consequently, consumers downsize that they have to pay extra, because then the feeling of dissonance disappears, which lets them perceive the company as more authentic. 2) A related theory to the cognitive dissonance theory is the consistency principle, which shows that consumers have the aim to keep their internal state of mind “consitent” (Fennis & Stroebe, 2016, p.276). This means that consumers who have a high level of objective trust are not as strongly affected by the fact that they have to pay extra for a donation in order to remain the level of trust and thus, to be consistent.

Contributions, limitations and future research

In a broader sense, this study contributes to the trust literature by considering a more objective, one-dimensional concept of trust and simultaneously including a multidimensional construct of trust, comprising integrity, benevolence and expertise trust. On top of that, it extends the very limited existing literature on trust as a moderator and provides indications on when this function is applicable. In addition to that, this study widens the variety of factors that trigger specific consumer perceptions. This research supports the notion that consumers suspect ulterior motives in CM campaigns (Varadarajan & Menon, 1988), and thus indicates that not all CM campaigns are equally successful. Regarding the damaging effect on trust that CM campaigns can cause, this also lays the groundwork for investigations regarding trust repair. Finally, results of this study provide additional evidence for the cognitive dissonance theory and the consistency theory.

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collectivist Confucian culture differs strongly from the individualistic Northern American culture (Park, Lee & Kim, 2013), which implies that the moral behavior is determined by different cultural values (Karaosman, Morales-Alonso & Grijalvo, 2015). Regarding CSR, individualistic cultures are sufficiently convinced by explicit CSR, which are “corporate policies that assume and articulate responsibility for some societal interests” (Matten & Moon, 2008, p.409). Contrastingly, collectivist cultures tend value implicit CSR, which is “the cooperation’ role within the wider formal and informal institutions for society’s interests and concerns” (Matten & Moon, 2008, p.409). This suggests that the perception and responses of CSR campaigns in a collectivist cultures may differ from the one in individualistic nations and therefore represents an interesting field for further research.

This study provides various different fields that deserve further research. 1) As this study provides evidence that trust serves as a moderator in only one of two slightly differing scenarios, it shows how nuanced the concept of trust can be. To get a better understanding of the full scope of trust, this distinction calls for further research. 2) Regarding CM campaigns, this study has shown that differences in donation payment can cause opposing effects on consumer perceptions about a company. Further research on additional factors with similar effects can provide implications on how to create a trustworthy CM campaign. 3) This study found that consumers perceived trust in a company is negatively affected when they have to pay extra for a CM donation. But how do you deal with this damaged trust? Additional analysis about the repair of trust will be especially helpful.

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Appendix)

App. 1) Edelman’s Trust Barometer 2016

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App. 2) Introduction

Dear participant! Thank you so much for your willingness to participate in this study! The purpose of this investigation is to examine how you evaluate certain marketing campaigns. You are hereby invited to participate in this investigation. Participation is voluntarily. Within this investigation, you will first be presented with a description of a company and a potential buying situation. You will have to answer some questions about the both. All the information that you provide will be treated confidentially and kept anonymous. This means that your name will not appear anywhere and your specific answers will not be linked to your name in any way. The investigation will take approximately 3 minutes, and you will be provided with $0.45 for your efforts. If you agree that you have read this text, that you do not have any questions regarding study participation, that you are 18 years of age or older, and that you wish to participate in this research study, please check the ‘I AGREE’ box and press next at the bottom of the page. m I Agree

m I do not Agree

App. 3) Manipulation of Objective Trust

Low Level of Objective Trust Moderator

− The company “Night Sparkle” is large, global candle brand and has been established 3 years ago

− Their products are manufactured in Asia and their employees have contracts, which are typical for Asian standards (low wages and substandard labor conditions)

− "Night Sparkle" practices mass production due to extreme cost pressure of the top management

− The company supplies many department stores, supermarkets and discounters − They do not always deliver their products perfectly on time

High Level of Objective Trust Moderator

− The company “Night Sparkle” is a well-known and successful candle brand and has been around for almost 80 years

− Their candles are manufactured in Europe

− Employees of the company have typical European working hours and fair contracts − “Night Sparkle” supplies many churches, interior shops and department stores − They always deliver their products on time

App. 4) Manipulation of Donation Payment

Company pays

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Consumer pays

Now imagine being in a department store. You are looking for a candle for in your living

room. You notice that "Night Sparkle" is hosting, but not paying for a campaign that supports a social cause. On the candle package it is mentioned that for each candle that is being bought, the company makes a donation to UNICEF. The original price of $1.85 has increased to $1.95 after the campaign was introduced. Thus, you as a consumer pay extra for their campaign.

App. 5) Perception of Trust

Benevolence Trust

Below we present you with some statements to know how this campaigns makes you perceive the candle company

− The company accepts its social responsibility

− Consumers and their desires are very important to the company − The company would not do anything on purpose to hurt consumers − The company is very concerned about consumer’s welfare

Ability Trust

Please indicate on the scale to which extent you agree with the following statements: − The company operates economically successful and efficiently

− The company stands for high product quality

− The company works with comprehensive attention to detail − The company is very capable of performing its job

Integrity Trust

Please indicate on the scale to which extent you agree with the following statements:

− The company acts in accordance with its promises

− Consumers never have to wonder whether the company will stick to its word

− The company tries to be fair in dealings with others (companies, suppliers, clients etc.)

− Sound principles seem to guide the company’s behavior

App 6) Manipulation Check

Please indicate who paid for the donation to UNICEF − The Company

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Company Perception

Please indicate to what extent you think the following characteristics describe the Night Sparkle

1: Not at all 2 3 4 5 6 7: Very