Academic journal article Academy of Marketing Studies Journal

Altruistic or Opportunistic: Consumer Perception of Cause-Related Products

Academic journal article Academy of Marketing Studies Journal

Altruistic or Opportunistic: Consumer Perception of Cause-Related Products

Article excerpt

INTRODUCTION

Nowadays, many corporations contribute to public goods through wide arrays of charitable activities including philanthropic donations, social responsibility programs or cause-related marketing campaigns. Cause-related marketing (CRM) which links purchases and product sales with donations to charities has robustly emerged as a specific form of corporate social responsibility as a result of the desire of both corporations and consumers to demonstrate their responsibility to the society (Varadarajan and Menon, 1988). CRM makes it easier for consumers to engage in philanthropic activities and helps firms to combine social responsibility with bottom-line performance, thus gaining enormous popularity since the late 80s (Varadarajan and Menon, 1988). CRM has become a vital component of a firm's marketing strategies since it responds to consumer expectations, improves corporate performance and helps worthy social causes at the same time (Varadarajan and Menon, 1988; Webb and Mohr, 1998). While contributions through CRM initiatives have gained significant recognition, what really motivates for-profit firms to do so is debatable.

Several prior studies on consumer perception of CRM suggest that consumers are aware of the conflict between the profit-maximization philosophy and the philanthropic nature of CRM activities initiated by commercial entrepreneurs (Varadarajan and Menon, 1988; Webb and Mohr, 1998). Hence, consumers tend to exhibit skeptical attitude towards the true motives of profit-driven firms supporting CRM campaigns. In the marketing literature, several studies have been conducted with regard to consumers' reaction to firms' charitable activities and a number of determinants of their perception have been acknowledged. Even though the results from those studies show a mix between consumers' altruistic and opportunistic perceptions of CRM initiatives endorsed by commercial firms, it seems that consumers have more opportunistic perception than altruistic perception of CRM as most respondents tend to think of CRM activities initiated by commercial firms as strategic marketing tactics with more firm-serving motives underneath than purely society-serving motives (e.g. Varadarajan and Menon, 1988; Webb and Mohr, 1998). Also, wide arrays of elements included in CRM campaigns (e.g., donation magnitude, product type, brand-cause fit etc.) are identified in previous studies as crucial factors shaping consumer perception toward CRM activities.

Though CRM initiatives are well established in the marketing literature, literature with respect to how consumers react to CRM pricing practices and different types of entrepreneurs in CRM is fairly silent. Studies by Subrahmayan (2004) and Berglind and Nakata (2005) provide preliminary insight into consumer responses to high product prices in CRM campaigns, suggesting that when the price of cause-related product is high, consumers tend to exhibit negative buying intent. These findings are important to marketers in CRM, but they only apply to commercial companies. Would the findings still hold when it comes to different types of entrepreneur participating in the same CRM campaigns? What kind of perception and attitude do consumers have that stimulate them to react that way to high product prices in those studies? While studies on consumer perception of CRM initiatives introduced by commercial firms are prevalent in the marketing literature, studies on consumer perception of social entrepreneurs in CRM are immensely insufficient, let alone consumer perception of social entrepreneurs' pricing strategies in CRM. Hence we lack the understanding of consumer interpretations of and reactions to CRM and CRM pricing strategies adopted by social entrepreneurs. Thus, this study will focus on opportunistic and altruistic consumer perceptions of cause-related products sold at different price levels and by two different types of enterprises: for-profit entrepreneurs and social entrepreneurs. …

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