project work on

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Cause Related Marketing and Its Impact on the Purchasing Behavior of the Customers in Bangladesh

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Report

On

Cause-Related Marketing and Its Impact on the Purchasing Behavior of the

Customers in Bangladesh


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Report On:

Cause-Related Marketing and Its Impact on the Purchasing Behavior of the

Customers in Bangladesh

Under The Supervision of

Md. Habibur Rahman

Faculty of Business

ASA University Bangladesh, Dhaka

Bangladesh

April, 2011

Prepared By:

Tilok Das

1st

Batch, Section: MKT-1A

I.D. 071-12-188

Program: BBA

Spring Semester-2011

Date of Submission: 15th

April 2011.


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Declaration:

I am Tilok Das, student of BBA under Faculty of Business(BBA Program), major in

Marketing of ASA University Bangladesh; do hereby declare that the Project Work on Cause

Related Marketing and Its Impact on the Purchasing Behavior of the Customers of

Bangladesh has not been submitted by anyone for any degree, diploma, title, or recognition.

So, I hereby declare that the submitted project paper is true to the best of my knowledge.

Yours sincerely,

Tilok Das

ID: No. 071-12-188

Section: MKT- 1A

ASAUB, April 2011.


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ASA UNIVERSITY BANGLADESH

Certificate for Clearance:

This is to certify that Tilok Das, ID No: 071-12-188, student of ASA University Bangladesh of

BBA program, major in Marketing has completed the project work on Cause Related

Marketing and Its Impact on the Purchasing Behavior of the Customers of Bangladesh

successfully under my supervision. I also declare that;

It has been prepared under my direct supervision and guidance; It is the product of his own investigation and it is not submitted to any University or

institution for any degree;

I have gone through the final draft of the thesis and approved it for submission.

I wish him every success in life.

Supervisor

Md. Habibur RahmanLecturer

Faculty of Business

ASA University Bangladesh


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Letter of Transmittal:

January 27th

, 2011

The project Invigilator

The Faculty of Business

ASA University Bangladesh

Shymoli, Dhaka1207

Subject: Submission of Project Work Report.

Dear Sir:

I have successfully completed my project Work on Cause Related Marketing and Its Impact on

the Purchasing Behavior of the Customers in Bangladesh. This project works enabled me to

learning the implementation of the two contemporary management techniques to a great extent

as well as after implementing these methods how can be benefited to sustain in the competitive

world of an organization.

Now, I would like to submit the project work on Cause Related Marketing and Its Impact onthe Purchasing Behavior of the Customers in Bangladesh which is a mandatory course for

completing my study. I am optimistic that this report will satisfy the entire requirements.

Thanking you.

Yours Sincerely,

Tilok Das

I.D. 071-12-188

1st

Batch, Section: MKT-1A

Program: BBA

ASA University Bangladesh.


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Acknowledgement:

First of all, all praises to be to the supreme of this universe, the almighty that enabled me to

complete this project work on Cause Related Marketing and Its Impact on the PurchasingBehavior of the Customers in Bangladesh.

Next, my deepest appreciation is to my course invigilator Md. Habibur Rahman, Lecturer,

Faculty of Business, ASA University Bangladesh. Without his guidance and assistance, this

report would not have seen the daylight.

And finally, I would like to thanks to our Dean, Faculty of Business, Professor Dr. Md. Abdul

Hye, as well as Vice-Chancellor, Professor Md. Muinuddin Khan who gives us special

opportunity to complete project work Spring-2011 semester.


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Executive Summary

Marketing, now, is not merely about only the market. The focal point is getting wider day by

day. The companies are devising different schemes to contribute to societal development

activities along with their attainment of corporate goals and objectives. Cause related marketing

is one of those tactics that enables the marketers to involve the customers directly into the

process. This study tries to portray whether the customers purchasing behavior or brand

preference are influence by such marketing program. The demographic variables have great

influence on the purchasing decision making process of customer. Whether that is also being

influenced by companies cause-related marketing program is also explored here. The findings

have showed that a customer is influenced by the companies cause related marketing programs

while adopting a new brand or executing its purchase intension and the customers prefer to

support generally health and life saving issues.

In theFirst part, I discussed about the cause-related marketing, objective of the report, literature

review, scope of the study, limitations of the report. Second part, describes about my report

methodology. The Third part, describes the findings and result of analysis. Fourth Part, I

implications for future research. The last part shows recommendation and Conclusion against

the cause-related marketing and its impact on the purchasing behavior of the customers in

Bangladesh

Therefore I have tried to cover all aspects of activities to prepare an effective and useful report.

There are lots of opportunities for further study to justify the reliability of the report.


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Chapter No. Contents Page No.

01. Introduction

Chapter 1.1: Objective of the Report

Chapter 1.2: Literature Review

1.2.1: The Objectives of Cause Related Marketing

1.2.2: Corporate and Marketing Objectives

1.2.3: Brand Loyalty

1.2.4: The Expanded Benefits of Cause Marketing Framework

1.2.5: Strategy for Cause Related Marketing

1.2.6: Types of CRM Programs

Chapter 1.3: Scope of the Study

Chapter 1.4: Limitations of the Report

Chapter 2: Methodology

Chapter 3.0: Findings and Result of Analysis

3.1: Hypotheses drawn

3.2: Analysis & Calculation the Hypotheses

3.3: Interpretation of findings

3.3.1: Attitude to a cause-related marketing strategy

3.3.2: Impact on brand attitude

Chapter 4.0: Implications for future research


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Table of Contents

Chapter 1.0: Introduction

In the late fifties of the last decade Paul M. Mazoor termed marketing as the delivery of lifestyle

to people. Philip Kotler, in agreement with that idea, coined that the delivery should be made for

customers satisfaction. Thus, with elapsing of time, focal points of marketing changed

obviously towards the benevolence of consumers, intermediaries and environment in the long

run. Apart from behaving responsibly in terms of corporate governance an financial reporting,

businesses engage in a number of practices designed to engender positive attitude and comment

from major external publics that include their customer base (Potter and Adam, 2005). The

current date marketing theory and application, conceiving the gist of the earlier ones, focus on

building up association with the society in large scale because it is the relationship or feeling of

bondage that thrusts a twenty first century conscious person to be a consumer of any

organization. Customers and marketers consider relationship to be the most significant issue in

case of business. Cause Related Marketing is a marketing program of business organizations inpursuit of their maintenance of multi faceted relationship with different parts of the society.

Some other terms are used to describe such activities of the companies but now a days cause

related marketing is more commonly used (Adkins, 1999; Drumright 1996:). Through Cause

Related Marketing Companies Bridge it selves very integrated with the members of the society

by doing well to the society. There is growing evidence to suggest that consumers are willing to


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use their purchasing power to reward or punish companies based on their social responsibility

(Creyer, 1997; Sen and Bhattacharya, 2001; Sen and Morwitz, 1996). Cause-related marketing as

a marketing strategy is developing in an environment of increasing consumer interest in

corporate social responsibility (Cunningham, 1997; Ptacek and Salazar, 1997; Sen and Morwitz,

1996). In the early eighties of last century this concept got immense popularity after a successful

innovation and implementation by American Express Bank. The companies in the third world

countries like Bangladesh are also spring boarding this concept in order to present their

inclination in contributing social issues and to involve the customers in the entire process.

Chapter 1.1: Objective of the Report

This study has been endeavored to contribute to the achievement of the following

objectives:

To identify the level of the consumers understanding and attitudes towards cause-r

elated marketing.

To measure the proportion of consumers within the sample are/were influenced by

cause-related marketing in their shopping habits.

To identify whether the customers perception, preference and attitude toward a brand

and company is affected by the latters involvement with cause related marketing.

To identify the issues/charitable causes those are most likely to influence purchase

behavior.

To identify reasons that might work as the deterrents for the consumers to respond

against cause-related marketing.

To identify whether there exist and relationship between the consumers demographic

variables (age, education, income etc.) and overall perception about/support for cause

related marketing.


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Chapter 1.2: Literature Review

After finishing the previous chapter with presenting the research questions, this chapter will

continue to present theories that are relevant to our research questions. First theories that are

related to research question one will be presented followed by the ones connected to the second

research question. This chapter will end with a conceptual framework that will guide this studyinto the next chapter.

1.2.1: The Objectives of Cause Related Marketing

Objectives are described by Berman and Evans (1997) as performance targets wished to

accomplish in the long and/or short term and could aim towards such issues as: improved image,

profit, sales and satisfaction. The University of South Australia glossary provides a more

thorough definition of the term of which the most relevant parts to this study are quoted below:

Objectives are operational statements; that is, they are written in terms which make it evident

when they have been achieved. As with goals, they are descriptions of position rather than an

action. They are descriptions of a desirable future state. How far in the future is variable. They

may imply immediate action or a sequence of activities in the near future .

1.2.2: Corporate and Marketing Objectives


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When looking at the CRM objectives from a companys perspective in Varadarajan and Menons

CRM article from 1988 a large number of objectives are found. The objectives are collected

through scrutinizing previous articles where cases on the CRM topic have been presented. There

are six objectives that are given more space and time in the article than the others and these six

are described as follows:

Increase sales Which is one of the most fundamental reasons for participating in cause

marketing activities.

Enhancing corporate stature Due to association with a respected cause/organization a

company may get a better corporate image, improved national visibility and communications

toward social responsibility with the public.

Thwarting negative publicityThe use of CRM as a response to negative publicity can be an

effective weapon.

Customer pacification When companies are threatened by a boycott on their products CRM

can act as one part of a more extensive program to calm down the group who are accountable for

the boycott.

Facilitating market entry Companies entering a market and at the same time use CRM to

smooth the progress of penetration is one objective that is quite common.

Increase the level of trade merchandising activity for the brand(s) promoted Improvements in

the number of reorders, sell-through and similar measures are important objectives for a large

quantity of companies involved in CRM.

Apart from the six main objectives there are a number of other objectives that a company may

strive for when using CRM according to Varadarajan and Menon (1988). These objectives are

only treated superficially and may overlap, be an element or even be one of the six main

objectives above. A total list of the objectives provided by Varadarajan and Menon (1988) is

shown in table 2:1 which according to them is not exhaustive but purely illustrative.

Gaining

national

Visibility

Enhancing corporate

image

Thwarting

negative

publicity

Pacifying

customer

groups

Generating

incremental sales


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Promoting

repeat

Purchases

Promoting multiple

unit purchases

Promoting more

varied usage

Increasing brand

awareness

Increasing brand

recognition

Enhancing

brand

Image

Reinforcing brand

image

Broadening

customer base

Reaching new

market segments

and geographicsegments

Increasing level of

merch andising

activity at the retaillevel of the brand

Table 1.2.2: Corporate and Marketing Objectives

1.2.3: Brand Loyalty

One area that is highly discussed in articles by researchers connected to objectives/benefits,

which Varadarajan and Menon (1988) do not bring up specifically but only mention briefly, is

the importance of brand loyalty when it comes to using CRM. Dick and Basu (1994) define

brand loyalty as: The relationship between the relative attitude toward an entity

(brand/service/store/vendor) and patronage behavior. Repeated purchasing alone does not

necessary mean that a person is loyal to a brand since that decision can be based on, for example

the stores supply. If the store only offers one brand on that product the customers are forced to

a repeated purchasing behavior which is not connected to brand loyalty. The relationship

between a persons attitude and behavior is the key when studying brand loyalty, where both

parts are required (ibid). In Cone Incs (2004) customer survey, 86 percent said that they would

switch brands if price and quality were equal and instead buy a cause-supporting product.

According to Van den Brink, Odekerken-Schrder and Pauwels (2006) CRM is only effective

when it involves a product with low brand loyalty. In contrast using CRM on a product with high

brand loyalty will not affect the consumers purchasing behavior.


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1.2.4: The Expanded Benefits of Cause Marketing Framework

The expanded benefits of cause marketing framework are divided into the company involved in

CRM and the different stakeholders connected to that company (Gourville & Rangan, 2004). The

expanded benefits of cause marketing framework do not outspokenly talk about objectives as themanagerial dimensions of CRM theory do, but use the word benefit instead, which according to

the Oxford English dictionary is described as:

To do well to, to be of advantage or profit to; to improve, help forward and a company that

strive to improve in a particular area in order to reach a desirable future state could therefore use

benefits in the way of objectives. The expanded benefits of cause-marketing (see figure 6.4)

shows the potential benefits connected to the different stakeholders in a CRM relationship

Figure 1.2.4: The Expanded Benefits of Cause Marketing

Non-profitOrganization

For-Profit Firm Employees, InvestorsBusiness Associates.

1a 4

Donors to the

Cause

Clients of the

Cause

5a

PotentialCustomers

2b

Social Cause

2a

5b

1b

3


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According to Gourville and Rangan (2004) the all-black arrows in the expanded benefits of cause

marketing figure represents the relationships that contribute to first order benefits and the dotted

arrows represents the relationships that contribute to second order benefits. Gourville andRangan (2004) state that the original framework not including the dotted arrows previously

limited the focus of CRM benefits to increased sales and alike and neglected benefits that were

not as easy to observe. First order benefits are directly monetary benefits such as increased sales

while second order benefits are less focused on the direct monetary aspects and the benefits are a

result of the fit between the company and its stakeholders (ibid). Table 1.2.4 below shows the

overall benefits of the cause marketing relationship without going in-depth into the specific

benefits perceived by each party in the framework. The arrows 2b and 4 in figure 1.2.4 are

directly linked from the companys stakeholders to the company and will be more thoroughly

described from a company perspective below table 1.2.4.

Table 1.2.4: Overall Benefits of Cause Marketing

Arrow/Line First Order Benefits Second Order Benefits

1a Monetary donation

1b Monetary donation

2a Increased sales

2b Increased sales (Company benefits)

3 Funds for the cause

4 Increased stakeholder loyalty and

motivation(Company benefits)

5a Don ate directly to the cause (in creased

donor support)

5b Increased message effectiveness for the

cause


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When looking closer from a company perspective on the expanded benefits of cause marketing

framework Gourville and Rangan (2004) say that there are three main groups of stakeholders that

can be influenced by the CRM activities. The three groups of stakeholders that can be influenced

are firstly the current and potential consumers, secondly the employees and investors and finally

the general public which represent the arrows 2b and 4 in the framework above. The potential

benefits for the company connected to these stakeholders because of the influence of effective

cause marketing activities on them are according to Gourville and Rangan (2004) the following:

The current and potential consumersIncreased possibility of a sale and reduced differentiating

costs for an offering in the minds of the consumer.

The employees and investorsLower costs in investor and personnel management due to the

higher possibility of long term commitment between the parties because of a better match

between potential employees, investors and the company as well as the retention of current

employees and investors.

The general publicImproving the relations with government regulators, local interest groups

and the general public.

1.2.5: Strategy for Cause Related Marketing

This section will start with presenting the second research question and continue to discusstheories that are connected to it.

Strategy

The Oxford University press broad definition of strategy is: a specific way in which something

is to be done. The more elaborate definition of strategy provided by Johnson, Scholes and

Whittington (2005, p 9) say that: Strategy is the direction and scope of an organization over the

long term, which achieves advantage in a changing environment through its configuration of

resources and competences with the aim of fulfilling stakeholder expectations. Johnson et al.

also gives a more brief explanation of strategy as the organizations long term direction.

According to van den Brink et al. a CRM program can be described as either strategic or tactical

but often it is characterized as a mix of these two (see figure 1.2.5).

Tactical Strate ic

CongruenceLow


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Figure 1.2.5: Schematic Representation of Strategic and Tactical CRM

The level of; congruence how well the company, cause and customer fit, duration the time

frame of the program, invested resourcesfinancial commitment, management involvementtop

management commitment, will decide whether a company is using a strategic or tactical strategy

(ibid). All of these four factors will be described more in detail later in this chapter.

Quantifiers in CRM

Companies involved in CRM have a great array of choices when deciding what type of quantifier

to use in their CRM campaign. Quantifier is the format that the company uses to describe the

level of donation to a cause (Pracejus, Olsen & Brown, 2004). There are three main types of

quantifiers all of which consist of a large number of subtypes. The first and most common type

of quantifier is the abstract quantifier that is characterized by the lack of precise information to

the customer of how much that is really donated. Almost 70% of all CRM quantifiers used on the

Internet are abstract and usually use the words portion of, part of or percentage of, without

specifying the degree. The second and next largest quantifier is the estimable which gives some

information to the customer but not all information in order to know the exact amount of

donation to the cause. More than one quarter of the quantifiers used are estimable and consist of

subtypes such as: x percent of proceeds and all of the net profits proceeds. The last main type of

quantifier is the calculable quantifier which also is the least used type with 4% of the total. This

type allows the customer to calculate the actual amount of the donation. The entire price goes to

and x percent of the sales goes to, are examples of calculable quantifiers (Pracejus et al.).

High

Duration

Invested Resources

Mana ement Involvement


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Prior research have according to Pracejus et al. showed that vague quantifiers such as abstract

and estimable are by customers overestimated in terms of money donated to a cause by the

company. Pracejus et al. end the article by suggesting the use of calculable quantifiers in CRM

campaigns to not confuse the customers. Pracejus et al. are backed up by Welsh and Jerry (1999)

the pioneers in CRM responsible for American Expresss early CRM successes when they

propose the use of calculable concrete quantifiers. Welsh says that: Consumers are tired of

vague promises made by everyone from politicians to weight-loss gurus. when he stresses the

importance for companies involved in CRM to be concrete.

Developing a CRM Campaign

According to Pringle and Thompson (1999, p 143-146) a CRM campaign consists of three

development stages; commitment, due diligence and contract negotiation. When these stages

have been completed a territory is established and the development of the CRM campaign

begins.

Commitment

In the first stage of the process a company has to assure itself that they want to make a

commitment to a CRM campaign. The company has to be aware of both the advantages and

disadvantages of CRM and how long this type of marketing strategy should last. One important

thing when it comes to applying a CRM campaign is to have the chief executive committed to

the idea because of their significant influence to the organization. Support from the executive is

not the only thing that matters it is also about involving the rest of the organization into the idea

to get a broader support. One should keep in mind that the charity organizations go through the

same process and also have to be cautious when they are choosing who to cooperate with since

they often also have a strong brand to protect.

Due Diligence

The second step is the due diligence process where a company has to decide which charity or

cause to cooperate with. In this step it is essential to find a company and a charity with the same

values and common interests. Kalligeros (2005) supports this theory and states that the partners


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must have a common brand image, mission and values so they can focus on the same target

market. Nowak and Till (2000) also claim that in the process of selecting your partner the

charitys previously engagements in CRM programs should be considered, it is more effective if

the charity does not have a history with other brands. Pringle and Thompson (1999, p 147) often

compare this step of the process to the marriage because of the criteria in finding your partner.

According to Kalligeros (2005) finding your partners can be described as both an art and science.

The art is described as the relationship and the science is based on the criteria of finding your

partner. Issues to consider in this process according to Kalligeros (2005) are social change,

results, target consumers and competitors. Pringle and Thompson (1999, p 147) state that like in

marriage you do not only get into a relationship with your partner but also with its network and

other involved parties. It is important to be aware of the consequences of these unwanted

relationships but at the same time accept them. This requires that both parties do not hide

relevant information from one another and that this relationship is based on honesty and trust

(ibid).

Contract Negotiation

Pringle and Thompsons (1999, p 152) final and most important step is contract negotiation

where both parties have to sign an agreement. The agreement should state both financial

commitment and duration of the relationship. Both parties should know what to expect from each

other and both a minimum financial effort and time period should be specified. Kalligeros (2005)

agrees with this and also claims that the negotiation contract should consist of a timetable, areas

of responsibilities, wanted results and how to achieve the goal. According to Pringle and

Thompson (1999, p 152) it is such a complex process in finding a partner to cooperate with in a

CRM campaign so the contract should contain a notice period of at least 6 months. This gives

them an opportunity to finish the project in a decent way and start looking for a new partner.

1.2.6: Types of CRM Programs


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According to Polonsky and Speed (2001) there are five different types of CRM programs. These

are broad-based, limited, market focused, replacement and multi-phase programs. To decide

which program to use the following four questions need to be taken into consideration. What

type of consumers is targeted? Are there any actions required from the customer besides

purchasing the product or service? What financial commitment is the company willing to offer

and if there are any leveraging activities required?

Broad-based is the simplest program. Both existing and new consumers are targeted and fir ms

donate a certain amount of each sold product. The only action required from the consumer is the

purchasing of the product and there are no limits of how big amount that is donated. When using

broad-based CRM programs leveraging activities are needed. These could include advertising,

packaging information and sales information.

Limited CRM program is a limited version of the broad-based which also targets all kinds of

consumers. The main difference between broad-based and the limited CRM program is that firms

donate a certain amount of each sold product but only to a maximum sum. In some cases they

also offer to donate a minimum sum to increase the credibility. As in the broad- based program

the only required action from the consumer is purchasing the product. Market-focused program

targets new types of consumers. There might be an additional requirement from the consumer

besides purchasing the product, i.e. submit coupons. The financial commitment can be either

unlimited or capped and an amount is donated for all sales of a specific product. Since this

program targets a specific market the promotion needs to be adapted to that market and also in

some cases informative sales promotion is needed.

Replacement program replaces the ordinary sponsoring with sales based giving. All types of

consumers are targeted. The requirements from the consumers are similar to the market- focused

program where also a second action may be needed. As in the limited CRM program the

financial commitment is also capped which means there will be a limit of how much money thatwill be donated. Both advertising and information on the package are required leverage

activities, i.e. By purchasing this product you have donated a certain amount to a specific

cause. Additional sales promotions are also commonly used in this program.


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Multi-phase program targets all kinds of consumers, both new and existing. Here the consumers

have to purchase a product and an additional action is required. It could be submitting coupons

or mail in a barcode but the big advantage with this program is that not all customers will make

this extra effort and still the companys gain in consumers trust will be the same as if t here were

no extra requirement. The financial commitment can be either unlimited or capped and an

amount is donated for all sales of a specific product. Advertising and information of packages are

essential and should inform the consumer of the extra activity that is needed. This can also be

complemented with different types of sales promotions

Chapter 1.3: Scope of the Study

To gain the practical knowledge by doing such type of research works. To build a professional career in the field of business administration. To find out financial solution. To enable better financial decision making for future and ability to forecast the various

weakness and ability of the business.

Chapter 1.4: Limitations of the Report

Since our study based on both primary and secondary data, there is a possibility of getting fake

information. If the surveyed personnel provide us with any fabricated information about cause-

related Marketing, then the report findings may be erroneous. Above all, this study is weak in

some points. The notable ones are as under:

The surveyconducted in a very short time, so I was not able to collect more information.


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Only different segments of people consider here as sample those may not represent aswhole.

Respondents did not understand meaning of the questions in some cases; sometimes theyhad no idea at all.

In this type of questions, the respondents might provide socially acceptable answers. Thisrisk was unavoidable.

No proper directions for sampling methods in this field Lack of proper authority to conduct the interview program.

Chapter 2: Methodology

The study has initially focused on qualitative research to conceptualize the issues of cause related

marketing from the perspective of customers. Few hypotheses which were also developed tested

through survey method under quantitative research. To conduct the study, primary data were

collected through structured questionnaires (Malhotra, 2005). The questionnaire was designed to

collect information about the brand preference, purchasing attitude and perception of respondents

regarding cause-related marketing devised by an organization. Prior to that quantitative

approach, basic primary qualitative technique i.e. depth interview was conducted over the

managers of different MNCs operating in Bangladesh to shed light onto this issue. In this study,

to explore about the opinion, views, suggestions, contributions and variables emitting from mass

people about the cause related marketing in Bangladesh, the level of scale was interval and thetechnique was five point Likert type scale anchored at the numeral 1 with the verbal statement

strongly disagree and at the numeral 5 with the verbal statement strongly agree (Elbeck,

1987; Steiber, 1989). Multiple items were used to establish appropriate measurement properties

(reliability and validity) of the selected constructs. The scale was reliable as the Cronbach's alpha

was evidenced as 0.723. The questionnaire was pretested several times to ensure that the


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wording, format, length, and sequencing of questions were appropriate. Non Probabilistic

Sampling technique (Zikmund, 2004) was used to determine the elements of the sample. A total

of 120 people residing in Dhaka city were surveyed in the early April 2011. To conduct data

analysis both descriptive and inferential statistics have been executed. One sample t-test and

correlation, under SPSS program have been applied to measure the different dimensions Cause-

related marketing in Bangladesh. To shed more light on the issue a few in-depth interviews were

conducted over the corporate officials of different organizations. Simultaneously, to make this

paper more informative different published text books, related journals, reports, seminar papers,

web pages, web blogs, magazines and research works have been consulted. Literatures were

generally collected from said sources and the Internet.

As a result, a thorough review of literatures enabled us to make a consistent presentation of the

theme of study.

Chapter 3.0: Findings and Result of Analysis

3.1: Hypotheses drawn:

The exploration of the secondary literature and interview with the company officials have

contributed in the development of the following hypotheses.

H1: Cause-related marketing will generate a positive change in consumers attitude towards

the promoted brand, if they are aware of that.

1.1 I will change a brand if the company is not involved in any cause related marketing.

1.2 I will patronize that brand which has any involvement with cause related marketing.

1.3 I believe to obtain more satisfaction from a brand that supports a social cause.

1.4 In case of purchasing a new brand I will choose that which is involved anyhow in cause

related marketing.

1.5 My perception toward the brand or the company changes if it is found to be involved in cause

related marketing.

1.6 A brand affiliated with a cause can always carry the best benefit.


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H2: Consumers purchase intention will be enhanced if they are well aware of the cause

related marketing program of the company.

2.1 In order to support a cause related marketing program I, as a customer, may incur additional

costs.

2.2 I, as a customer, sometimes consider quality of the product to support cause-related

marketing program.

2.3 Sometimes I buy such products which are not necessary to me but do that only to support that

cause.

H3: Consumers support those cause spontaneously which are strategically fitted with the

brand and are related to them personally or socially.

3.1 I support that causes of any organization with which I, as a customer, can affiliate myself or

any of my closed ones.

3.2 I expect that there will prevail a synergy between the cause and brand personality.

3.3 The image and the cause must be well supported in order to get support from the customers.

3.4 The most effective cause used in a cause-related marketing campaign is one which is not

normally associated with the organizations interest.

H4:Positive attitude toward cause related marketing is a reflection of positive attitude toward

charitable activity.

4.1 The more often a person donates to charitable organizations and causes, the more positive the

attitude toward cause-related marketing activity.

4.2 Respondents preferences for the type of cause they would most like to see supported in

cause-related marketing activity are similar to causes to which individuals prefer to donate

directly.

H5: Overall the customers are satisfied with the cause related marketing strategy of the

companies

5.1 I think every company should be involved in supporting contemporary causes.

5.2 I will recommend others to patronize cause relating marketing programs.


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H6:People prefer to support local causes than international one

H7: There is a strong relationship between customers age and overall attitude toward cause

related marketing.

H8: Cause related marketing is strongly affected by the gender.

H9:More educated customers tend to show greater support for cause-related marketing

H10:People with substantial income are more inclined to support cause-related marketing

3.2: Analysis & Calculation the Hypotheses:

The following table analyzes that customers may change their attitude changed towards a

particular brand which may instigated due to the companies cause related marketing strategies.

This hypothesis is dependent on six more other variables which were tested as separate

hypotheses. All the hypotheses are significantly accepted according to our sample t-test as the

calculated value (.000), for all the six hypotheses (table 1), is less than critical value (0.05). So

we can conclude that Cause-related marketing can generate a positive change in the customers

attitude toward a promoted brand.

Table 1: Cause-related marketing will generate a positive change in consumers attitude

towards the promoted brand, if they are aware of that.Test Value = 3

t df Sig.(2-

tailed)

Mean

Difference

95% Confidence

Interval of the

Difference

Lower Upper

I will change a brand if it is not involved in any

cause related marketing.41.962 119 .000 3.9333 3.7477 4.1189

I will adopt that which has any involvement with

cause related marketing.34.133 119 .000 3.82500 3.6031 4.0469

I believe to obtain more satisfaction from a brand

that supports a social cause.49.170 119 .000 4.28333 4.1108 4.4558


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In case of purchasing a new brand I will choose

that which is involved anyhow in cause related

marketing.

55.649 119 .000 4.30833 4.1550 4.4616

My perception toward the brand or the company

changes if it is found to be involved in cause

related marketing.

51.609 119 .000 4.28333 4.1190 4.4477

A brand affiliated with a cause can always carrythe best benefit. 64.356 119 .000 4.34167 4.2081 4.4752

The second hypothesis (table 2) is also getting acceptance at 5% significant level as all of its

variables which were converted into different hypotheses are producing calculated value less

than 5%. The actual value of all the hypotheses is 0.00. So we can conclude that companys well

devised and well communicated cause related marketing strategy can enhance the customers

purchase intention significantly.

Table 2: Consumers purchase intention will be enhanced if they are well aware of the

cause related marketing program of the company.

The twenty first century customers are very much knowledgeable and aware of the endeavors of

the companies. Before patronization of any particular proposal of the companies the customers

justify the relationship between the causes supported and company image & brand personality.

Moreover the customers try to relate the probable impact of that factor on their personal and

social lives. Our third hypothesis deals with this issue particularly (table 3). This hypothesis is

later broken down into four other hypotheses in order to test quantitatively. All the four other

hypotheses are found to be accepted on a 5% significance level, as the calculated values for them

Test Value = 3

t df Sig.(2-

tailed)

Mean

Difference

95% Confidence

Interval of the

Difference

Lower Upper

In order to support a cause related marketing

program I, as a customer, may incur additionalcosts.

64.720 119 .000 4.29167 4.1604 4.4230

I, as a customer, sometimes consider quality of the

product to support cause-related marketing

program.

53.942 119 .000 4.25833 4.1020 4.4146

Sometimes I buy such products which are not

necessary to me but do that only to support that

cause

38.612 119 .000 3.85833 3.6605 4.0562


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are 0.00 whereas the critical value is 0.05. So we can infer that consumers render their support

willingly to those causes which have been able to portray its significance in the consumers

personal and social lives by binding a good strategic fit with the brand personality and company

image.

Table 3: Consumers support those cause spontaneously which are strategically fitted with

the brand and are related to them personally or socially.

Table 4: Positive attitude toward cause related marketing is a reflection of positive attitude

toward charitable activity.

Test Value = 3

t df Sig.(2-

tailed)

Mean

Difference

95% Confidence

Interval of the

Difference

Lower Upper

I support that causes of any organization with

which I, as a customer, can affiliate myself or any

of my closed ones.

58.906 119 .000 4.14167 4.0024 4.2809

I expect that there will prevail a synergy betweenthe cause supported and brand personality.

58.126 119 .000 4.18333 4.0408 4.3258

The image and the cause must be well supported in

order to get support from the customers.

41.397 119 .000 3.87500 3.6896 4.0604

The most effective cause used in a cause-related

marketing campaign is one which is not normallyassociated with the organizations interest.

53.230 119 .000 3.98333 3.8352 4.1315

Test Value = 3

t df Sig.(2-

tailed)

MeanDifference

95% ConfidenceInterval of the

Difference

Lower Upper

The more often a person donates to charitable

organizations and causes, the more positive the

attitude toward cause-related marketing activity.

27.562 119 .000 3.54167 3.2872 3.7961


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People view the cause related marketing strategy of the company as a scope for them to take part

in social development work. Peoples attitude towards the charitable activity determines their

attitude toward cause related marketing. This hypothesis (table 4) testifies whether the patronizes

of cause related marketing possess the intention to donate in charitable works. With calculated

value less than the critical value (0.00


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General people tend to prefer patronize any issue which is primarily related with local of national

interest compared to any international one. The sixth hypothesis is accepted as the calculated

score 0.00 is less than the critical value 0.05 (table 6). So we can infer that local and national

causes get more preference than the international ones.

Table 8 delineates that there is a positive correlation between age of the respondents and the

support towards Cause related marketing with r=0.363 and it is significant at 5% level.

(Calculated value is 0.00). So the hypothesis of having a strong correlation between the

respondents age and support for cause related marketing is accepted. The positive score

indicates that as the age increases the tendency to support cause-related marketing of the

company increases. On the other hand, we cannot conclude in the same way about the

relationship between gender of the respondents and Support towards Cause related marketing of

a company (table 8) as here the calculated value is 0.298 which is much higher than the critical

value 0.05 though it delineates a positive correlation (r=0.098). So we can say that the hypothesis

is not accepted an can infer that support for cause related marketing programs of the company do

not depend on whether the respondent is a male or female.

Table 7: There is a strong relationship between customers age and Support towards Cause

related marketing

Support towards Causerelated marketing

Age

Support towards Cause related marketing

Pearson Correlation 1 .363**

Sig. (2-tailed) . .000

N 120 120

t df Sig.(2-

tailed)

Mean

Difference

95% Confidence

Interval of the

Difference

Lower Upper

Local/ National cause gets more preference by the

respondents than an international one.

33.029 119 .000 3.70000 3.4782 3.9218


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** Correlation is significant at the 0.05 level (2-tailed).

Table 8: Support toward cause related marketing is strongly affected by the gender.


Age




N 120 120

** Correlation is NOT significant at the 0.05 level (2-tailed).

We have also observed that educational background also do not influence the support for any

cause related marketing program of the company as the calculated value (table 9) is 0.117

whereas the critical value is 0.05 though the correlation is positive (r=0.144). So the hypothesis

of having a relationship between the respondents educational background and support towards

cause-related marketing is not accepted.

Table 9: More educated people tend to show greater support for cause-related marketing


Age




N 120 120

** Correlation is NOT significant at the 0.05 level (2-tailed).

The higher the income of the respondents, the greater the support for cause related marketing

programs of a companythe last hypothesis of the study (table 10) deals with the relationship

between the income of the respondents and support towards cause related marketing. The

hypothesis is accepted at 5% significance level as the calculated value is 4.6% (sig. 0.046) and

the level of correlation is positive, though not very substantial (r= 0.182). So we can conclude


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that people of higher level of income has more tendency to share that with the society in the form

of support for cause related marketing programs of the companies.

Table 10: People with substantial income are more inclined to support cause-related

marketing

Support towards Cause

related marketing

Age




N 120 120

* Correlation is significant at the 0.05 level (2-tailed).

In fact hypotheses H7, H8, H9 and H10 are related with the demographic variables of the

respondents. Out of these four hypotheses two were accepted (H7 and H10) and two were

rejected (H8 and H9) at 5% significance level. Depending on the rate of acceptance of

hypotheses, we actually cannot infer anything related to the level of correlation between the

respondents demographics and the support for cause-related marketing programs of the

company.


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3.3: Interpretation of findings

Cause-related marketing is a growing area of interest as reflected in both academic and

practitioner marketing literature. As presented cause- related marketing is a relatively recent

addition to the marketing communications mix. Cause-related marketing aligns a brand with a

nonprofit organization to which a contribution will be made by the firm, contingent upon

consumers undertaking a specified purchase behavior. In general, conceptual and empirical

research suggests that consumers have a positive view of this form of marketing activity.

However, it is also acknowledged that there are risks relating to the strategy, one of the most

serious being the potential for consumer perceptions of exploitation of the nonprofit organization

by the marketer. Developing a clearer understanding of the efficacy of cause-related marketing

as a marketing strategy is a critical undertaking for marketers.

Past research, both academic and practitioner, has indicated that consumers have primarily

positive attitudes toward companies that engage in this activity (Cavill and Company 1997; Ross

et al. 1991, 1992; Smith and Alcorn 1991). Further, there has been evidence to suggest that

consumer purchase behaviour is favourably influenced by this strategy and in some cases;

consumers are even willing to pay more for a product which supports the community. It has been

suggested that critical success factors for a cause-related marketing strategy include: a strategic

fit between cause and brand; a positively perceived motive of the firm; effective management of


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the campaign and nonprofit partner; and a long term approach to the partnership (Andreason

1996; Murphy 1997; Simon 1995; Welsh 1999). However, with the exception of firm motivation,

these factors have been identified primarily based on anecdotal evidence rather than systematic

research. In addition, relatively few academic articles or research studies have examined the

effectiveness of cause-related marketing in comparison to other marketing communications

strategies.

The purpose of this study was to examine consumer attitudes to cause-related marketing and the

potential for cause-related marketing to improve attitude to the brand and to influence purchase

intention. As discussed, although cause-related marketing is perceived to offer significant

benefits, it has been emphasised in the literature that the benefits of cause-related marketing need

to be evaluated in relation to alternative strategies.

In general, the results of this research indicate that consumer attitudes to a cause-related

marketing campaign are more favorable than consumer purchasing behavior in cause marketing

when controlling for the consumers behavior of fit between the brand and cause. There was

some support for the premise that cause-related marketing is more effective at generating a

positive change in brand attitude, when controlling for attitude to the marketing strategy.

With regard to influencing purchase intention, this research did not demonstrate a statistically

significant difference between the control, cause-related marketing, sponsorship and sales

promotion groups. Finally, neither gender nor personal values were shown to impact consumer

response in either change in brand attitude or purchase intention. The following sections will

discuss these findings in detail.

3.3.1: Attitude to a cause-related marketing strategy

This study offers support for the proposition that consumers will have a more positive attitudetoward a cause-related marketing strategy than toward marketing activities. An initial

examination of the means of the three treatment groups indicated that those respondents exposed

to a cause-related marketing campaign exhibited a slightly more favourable attitude to the

strategy than did the cause marketing group. Unfortunately, the differences in the means

narrowly missed out on achieving statistical significance. However, when controlling for the


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respondents perception of fit between the brand and cause organization or brand and promotion,

the results indicates that attitude toward the cause-related marketing strategy was substantially

more favorable. As the results indicate, the treatment group had a significant main effect on

attitude to the brand, when allowing for the perception of fit.

Further examination revealed that there was a significant difference between the cause-related

marketing group and the sponsorship group as well as the cause-related marketing, in terms of

attitude to the marketing strategies. The covariate of overall perceived fit, between the brand and

cause, had a significant effect on attitude to the brand and accounted for approximately 41

percent of the difference in attitude to the strategy between groups.

These results echo the literature that suggests that consumers are supportive of organizations that

support the community and cause-related marketing strategies in general. Drumright also

introduced the proposition that advertising campaigns with a social dimension engender a greater

consumer response than do conventional advertising campaigns. However, it appears that the

consumers perception of fit has a critical impact on their perceptions of cause-related marketing.

A plausible explanation suggested in the literature is that a natural fit between firm and cause

helps to overcome consumer potential perceptions of exploitation of the.

3.3.2: Impact on brand attitude

This study offers some support for the proposition that cause-related marketing can enhance

brand attitude and that the change in brand attitude experienced by consumers will be more

positive as a result of exposure to a cause-related marketing than exposure to a sponsorship or

sales promotion. A comparison of the means of the three treatment groups and one control group

indicated that only the group exposed to cause-related marketing experienced a positive change

in brand attitude. Further examination revealed that the type of group was shown to have a

significant main effect on attitude change, accounting for approximately 23 percent of the

difference. The significant difference, however, occurred between the control group and the

other three groups. This result suggests that in terms of affecting attitude to the brand, any

marketing communications strategy is better than none.


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The positive impact of cause-related marketing on brand attitude is consistent with the findings

of previous academic research. However, there has been limited comparison in the literature

between cause-related marketing and sales promotion or sponsorship, and no comparison with

regard to their ability to influence brand attitude. It is plausible that cause-related marketing may

have been able to engender a positive response in terms of an improvement in brand attitude due

to a positive perception of the firm or brands motives. That is, engaging in an activity to benefit

the community as opposed to simply driving sales. Attribution theory could also offer some

support for this argument. This explanation is consistent with research that suggested that

consumers perceive advertising as a self-serving act on the part of the organization and, as a

result, can trigger consumer defense mechanisms. Sales promotion is more overtly self-serving

than cause-related marketing, so these same perceptions of aggressive commercialism may be

transferred to the discount promotion. The relative novelty of cause-related marketing may also

aid in the improved attitude to the brand.

3.3.3: Impact on consumers purchasing behavior

This study found that consumers purchasing behavior was not more positive as a result of being

exposed to a cause-related marketing strategy. In fact, none of the marketing strategies appeared

to differ in their impact on consumers purchasing behavior. This finding is consistent with

Drumright and conclusion upon reviewing the research in corporate societal marketing.

Drumright and Murphy (2001) suggest that many organizations have been disappointed with the

lack of impact from corporate societal marketing initiatives on the bottom line, especially in the

short term. Also found that while some consumers exhibited a positive change in their view of

the companys image, it generally was not necessarily manifested in their consumers purchasing

behavior. This was particularly the case when traditional purchase criteria were important.

Consumers purchasing behaviorwas affected by cause-related marketing.

Charity incentives have been found to be more effective in promoting frivolous products thanpractical products. Given the soft drink product category used in this research and the age group

of the majority of the respondents, it is unlikely that this product would be perceived as

particularly frivolous. Therefore, the nature of the product may have affected the potential for

cause-related marketing to influence purchase intention. An additional reason may relate to the


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single exposure of the campaign not being adequate to influence this consumers purchasing

behavior.

3.3.4: Influence of gender and personal values

It is important to consider the factors that may influence the response to a cause-related

marketing strategy. Based on prior research, this study considered gender and personal values as

potential covariates that may need to be controlled. However, the findings showed that neither

gender nor personal values influenced the response to cause-related marketing. Cause-related

marketing in terms of attitude to the strategy, change in brand attitude or intention to purchase.

These researchers found that there was in fact a significant correlation between attitude toward

cause-related marketing and the following values: sense of belonging, warm relationships with

others and self-fulfillment. Interestingly, this study was also conducted using Australian

undergraduate and postgraduate university students. A possible explanation as to why the

findings of the current research study differ is that respondents in the earlier study indicated their

attitude to the general concept of cause-related marketing as opposed to a specific cause- related

marketing strategy.

With regard to the influence of gender on response to cause-related marketing, past research has

not been conclusive in its findings. The study suggested that womens attitudes were slightly

more favorable than were mens, but this difference was not statistically significant. I did not


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find any difference in attitudes and behavior towards cause-related marketing based on gender.

Their results indicated that women had a more favorable attitude to cause-related marketing and

its participants (the firm and nonprofit organization) than did men. It is interesting to note that

research in the area of helping behavior has faced similar contradictory results when examining

the impact of gender on helping behavior.

On the basis of a review of the literature pertaining to gender-related advertising research, that

research supports a gender-based approach to information processing, whereby females are more

comprehensive at processing messages. Further, females may process advertisements more

elaborately. I investigated the differences between males and females in the threshold at

which they engage in elaborative processing of message information. Their findings suggest

that men and women have different thresholds for the elaboration of message cues. I found there

were two factors that would determine whether gender differences would be exhibited in the

consideration of specific messages. These factors related to the degree of congruity contained in

the message and the response required of the individual. It was found that gender differences

were more likely to occur when the average demands of these two factors were moderate.

The preceding findings may provide an explanation for the lack of gender difference observed in

the current study. It can be assumed that the message relating to the brands participation in the

various marketing scenarios held a low degree of incongruity for respondents of both genders;

that is, they were all plausible marketing strategies that the brand may undertake. Further, the

response required was not particularly demanding. Therefore, it would be expected that no

gender difference would emerge in their responses in terms of attitude to the strategy, change in

brand attitude and purchase intention.


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Chapter 4.0: Implications for future research

Future research that builds on the findings of this study and overcomes its limitations is

recommended. First, it is suggested that this study should be replicated using a number of other

brands and product categories to determine whether these results can be extended to other

conditions. Similarly, this study should be replicated with a nonstudent sample to determine

whether these findings can be generalized to the overall population. Most importantly, repetition

of this study may clarify the impact of cause-related marketing on consumers purchasing

behavior in comparison to other communications strategies. Based on an examination of the

means on this dependent variable, cause-related marketing appeared to have a greater impact on

changing brand attitude. However, this result did not prove to be statistically significant, albeit

by a narrow margin. As such, it would be worthwhile to repeat this aspect of the research to

resolve this issue.

Second, it is recommended that future research should control for brand loyalty. It seems

plausible that a consumers brand loyalty will impact on their attitude to the strategy and

possibly impact on a change in brand attitude and consumers purchasing behavior. Further, it

would be of interest to determine the impact of cause-related marketing on consumers with

differing levels of brand loyalty. Given the lack of reliability achieved by the scale used to

measure brand loyalty, it is recommended that a different one be used.


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Third, the findings of this research suggest that consumer perception of fit between cause and

brand, in addition to consumer attitude to the cause-related marketing strategy, are critical factors

in facilitating change in consumers purchasing behavior. Therefore, it is suggested that future

research explore these two factors in more detail. Furthermore, it would be worthwhile to

explore whether the firm could favorably influence this perception by clearly articulating the

connection in the communication of the strategy. With regard to attitude to the strategy, further

research should examine the impact of the consumers existing awareness and attitude toward the

cause and the consumers perception of the firms motivation for participating in the strategy.

Finally, further research should be done to attempt to clarify the impact of gender and personal

values on a consumers attitude and response to a cause-related marketing strategy. Research to

date has demonstrated conflicting results.

Chapter 5.0: Recommendations & Conclusion

5.1: Recommendations

The respondents level awareness about the companies such type of societal contributory

activity, before participating in this study, was 70%. But only 29% of the respondents knew the

actual term of this type of marketing program. As the companies tendency to incline to involve

the social issues in the business operations is increasing, the respondents level of awareness and

support are expected also to grow more. This study has, primarily, endeavored to explore the

impact of cause-related marketing activity over the customers preference of brand and company.

It has been found out that cause-related marketing significantly influences the consumers

attitude toward a company and any brand particularly, provided that the customers are well

aware of such activity in conceptually. The interviews revealed that the following criteria play a

pivotal role in patronizing a cause.

The cause must bear significant benevolent feature which will contribute entirely tosocial welfare.

Customers favor that kind of causes with which they feel associated. Appealing causewill be that one which is recent and create great maladjustment in the society or which


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needs support in great extent. Customers feel proud and relieved to be a part of such

contribution.

Companies, to make the program a success, should patronize a little bit of different butsignificant causes which are overlooked by others or are focused by very few firms.

Every company has a self concept so as every brand. The selected cause must becompatible with the companys present image. For example, the fast food companies

should not patronize any medical services which deal with calorie reduction and obesity.

Because it is proved that numerous high calorie items are the prime ingredients of fast

foods.

To have linkage with the companys existing and potential product line and its corporateimage is very essential for a cause. It must not be highlighting any cause that will bring

good fortune to the company at present or in near future.

There is no hard line about the number of patronizations made by the company. But it isadvised to keep that reduced to as many as possible otherwise stakeholders might surmise

about the operating credibility of the firm.

Preferences should be given more to local or national issues. This study has notconsidered all the demographic variables that affect the purchasing decision of the

customers. The size of the sample is not very big and it is confined to the capital city

only.

Further study can be conducted in these areas to shed more light over the people's view of the

companies societal contributory activities and influence of such programs on customers

decision making process.

5.2: Conclusion

In conclusion, as an emerging area within the marketing discipline, there is a critical need for

research into the various elements of cause-related marketing strategies. The findings of this

research have important implications for both practitioners and academics. This research has

provided a conceptual model to demonstrate the process that leads to a favorable consumer

response to cause- related marketing. Furthermore, this study has empirically demonstrated the


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strengths of cause-related marketing in comparison to other communications strategies. The

major finding indicates that consumers have a more favorable attitude to a cause-related

marketing strategy than to either a sponsorship or sales promotion, dependent on the consumers

perception of fit between brand and cause. Cause-related marketing also has the ability to

engender a positive change in brand attitude and to do so more effectively than a sales

promotion. This change in attitude is contingent upon the consumers attitude to the strategy

itself. Given the unique win-win-win benefits associated with this strategy, it is not difficult to

understand why both practitioners and academics suggest that cause- related marketing is likely

to continue to grow. This research was undertaken with the intention of contributing to the

understanding of the factors that can maximize the effectiveness of this strategy. This study has

added to the current body of knowledge relating to cause-related marketing and has provided

insight into areas that warrant further exploration.

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Appendices

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