Download Customers Prefer to Contribute Towards a Social Cause over Sales

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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
VOL 4, NO 12
Customers Prefer to Contribute Towards a Social Cause over Sales
Promotion Tools
Muhammad Saleem Rana
Preston University, Islamabad.
Dr. Zekeriya Nas
HOD Turkish NUML, Islamabad, Pakistan
Abstract
Cause related marketing is going popular now a days and people are becoming familiar
with the new phenomena. Many firms have been successfully implemented the Cause
Related Marketing worldwide. This newly introduced approach is also being used by
many firms in Pakistan too. This study has focused on exploring whether the purchase of
convenience goods in Gujranwala is influenced by cause related marketing and that
whether consumers prefer to contribute to social causes over sales promotion tools such
as cut prices, free samples and stock out sales etc. or not. Data for the study was
collected from a sample of 280 respondents through a questionnaire. And it reveals from
the results of the study that majority of the respondents preferto contribute toa social
causes over any type of sales promotion activity. However, the dependency of preferring
causes on Personal characteristics like sex and age etc. were not seen.
Key Words: Cause related marketing, sales promotional tools; Purchase decision of the
customer.
1).
Introduction
Background
The term "cause related marketing" was first time introduced by “The American Express”
in 1983, by launching its campaign to raise money for the restoration of the Statue of Liberty.
American Express announced to contribute one-cent as donation to the Statue of Liberty every
time as and where its card charged by the customer anywhere; in this way they successfully
attracted new customers by 45%, andtheir overall sales wereincreased by 28% (Wall,
1984).Participating for charitable causes with brands has become a common practice for many
marketing campaign strategically referred as cause-related marketing (Lafferty & Goldsmith,
2005).
Varadarajan and Menon (1988) have also defined Cause Related Marketing as“the
process of formulating and implementing marketing activities that are characterized by anoffer
from the firm to contribute a specified amount to a designated cause when customers engage in
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revenue-producing
exchanges
that
satisfy
organizational
and
individual
VOL 4, NO 12
objectives”.
Organizations are keen to enter into Cause Related Marketing as competition has been expanded
globally and as development of brand loyalty is also demanded. And it may also provide better
results than any other sales promotion activities like discounts at prices, free samples etc...
(Mason, 2002).The benefitsfor Cause Related Marketing has been defined as a “win, win and
win,” scenario for business, customer and as for as the good cause also (Adkins, 1999). When the
price and the quality factors of competitive products are equal then it is the social responsibility
of the firm to decide purchasing factor for the consumer (Holmes, 2001). When the cost
associated with the cause is minimal then it will positively influence willingness of consumer to
buy a product related to the cause(Vaidyanathan&Aggarwal, 2005).
According to Business in the Community (1998), a corporate survey report, it has been
reported that about 81% of consumers are more likely to prefer the products or services that are
associated with a good cause. Now a day, Americans aremore receptive to Cause Related
Marketing than ever before. And it is 76% of the Americans who believethat it is more
acceptable for the companies to engage in Cause Related Marketing. Cynicism towards Cause
Related Marketing is quite low. And Only 21% questionedabout the motives of companies
related to the good cause.Cause Related Marketing has been successfully implemented by many
firms and it is significantly increasing day by day. In 1997, 15 cents have been donated by the
Coca Cola to mothers against drunk driving for every case of Coca-Cola sold at more than 400
Wall Mart Stores during the six week promotion.And in this way sales for Coke at these stores
were increased by 490% during the promotion (Friel, 2004).In 1999,$630 million was spent on
marketing deals and that benefited charities (Meyer, 1999).
Cause related marketing is beneficial for the cause and as well as for the firms also. There
are lots of benefits available for the firms. And Following are the benefits of cause related
marketing for a firm related to the good cuase (Dean, 2003):(1)
Creating Goodwill in the community.
(2)
Distinguish the corporate image and its brands from the competitors
(3)
Better acceptance for increase in the price.
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(4)
High morale.
(5)
Recruitment of new employees
(6)
Less criticism on the policies during crises.
(7)
Winning over skeptical public officials
(8)
Increase revenues and profits
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Problem Statement
For the success of the cause related marketing, there should be a perfect fit between the
product or brand of the company and the cause associated with the marketing (Welsh, 1999). The
unfamiliar cause will be familiar with the alliance of a popular brand and the effect of the
alliance on the brand attitudes is positive regardless of the degree of familiarity of the cause
associated with the marketing (Lafferty & Goldsmith, 2005).
Cause Related Marketinghas also been criticized as having selfish motives to improve the
image and sales of the product by relating it with a good cause. But it can be overcome with the
long term commitment to the cause (Arnott, 1994).And an organization can develop a better
image of the brand with the long-term commitment to cause (Meyer, 1999). During the holy
month ofRamzanin 1998,a campaign, "Help the Needy" was launched by “Procter and Gambles”
in several Islamic countries includingPakistan. The related cause was to assist the less fortunate
children in the society by providing them their most exigent needs.
Although the term Cause Related Marketing is newly introduced in Pakistan but it is
being implemented by the firms with positive approach. We are going to conduct a study to
know the preference ofCRMover sales promotion. The selective area of study is Gujranwala and
the specific products category was shampoos, soaps, toothpaste, detergents, chewing gums,
cigarettes, tea, ghee, oil, candies, and milk.
Research Objectives
1.
What is the most important factor for the consumer while going to purchase routine
items?
2.
Either the products related to the cause are preferred or not?
3.
Either the contribution towards a cause is preferred by the consumer or not?
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4.
Why a consumer preferred to buy a particular brand of daily items?
5.
Either there is a relationship between income, qualification, age, gender and the
preference for cause related products?
Hypothesis
H1: CRM is being preferred over discounts.
H2: CRM is being preferred over free samples.
H3: CRM is being preferred over Coupons.
H4: CRM is being preferred over POP.
H5: CRM is being preferred over sales promotion activities.
2).
Literature Review
Cause Related Marketing
According to cause-marketing consultant Daw (2006), cause-related marketing (CRM) is
a mutually beneficial collaboration between a corporation and a nonprofit in which their
respective assets are combined to.
 Create shareholder and social value
 Connect with a range of constituents (be they consumers, employees, or suppliers)
 Communicate the shared values of both organizations
Examples of CRM are given as under: Requests for small donations for children‟s charities at the supermarket checkout.
 Public awareness campaigns for HIV/AIDS, breast cancer, and other causes.
 Licensing of well-known charity trademarks and logos, like World Wildlife Fund‟s panda.
 Hand wash day by Lifebuoy.
 Help the needy by Ariel.
Sales Promotional Activities
A sales promotion is an incentive that is offered to a consumer or potential business customer to
spur the purchase of a product or service. Many companies use sales promotion strategies to
produce a short-term increase in sales. A company can offer many types of sales promotion
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activities including free samples, coupon, discounts, premiums, product demonstrations, pointof-purchase (POP) materials and even refunds or rebates (Suttle, 2009).
Purchase Decision
It has been proved by the researchers that there are five stages involved in making a
purchase decision of the customers. And these five stages are as below (Raybould, 2008).
 Problem recognition.
 Information search.
 Evaluation of alternatives.
 Purchase decision.
 Post purchase behavior.
Variables
CRM and sales promotion activities are independent variables whereas the purchase
decision of the customer is a dependent variable.
Conceptual Framework
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3).
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Research Methodology
Research Strategy
Quantitative research technique was used for this research study. And information was
collected throughout the city through a questionnaire. Total 280 samples were taken from the
city for the study.
Sample
A sample of 280 respondents was selected from Gujranwala for the study. Males
accounted for 70% and female 30% of the sample. All the respondents were related to the
different professions but students havingthe major of the representatives as 35%. About 62% of
the respondents were belonged to the age group between 20-30 years.The sample has also been
divided On the basis of qualification as, 12% respondents having masters, 30% havingbachelors,
35% having intermediate and the rest of the respondents having qualification matriculation or
below.
Research Instrument
A Questionnaire was adopted as an instrument for the collection of data for the study.
And the questionnaire was well structured and it was also pre-tested before the actual survey was
started.
Research Procedure
The survey for the study was conducted though out the Gujranwala. And all 280
respondents were selected from all main areas of the City. The data was collected through the
questionnaire and it was analyzed through the SPSS.
Following tests were conducted at SPSS: Frequency distribution
 Chi-square goodness-of-fit
 Chi-square test of independence
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4).
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Data, Presentation, Analysis and Interpretation
All the data was tested through SPSS and the results of the study are as blow:-
Table 1:Factors
Frequency
Percentage
Discounts
30
10.7
Quality
92
32.85
Packaging
1
0.35
Prestige
1
0.35
Advertisement
9
3.21
Co./Brand names
7
2.5
Price
42
15
Others
98
35
280
100
Total
The table shows that the majority of the consumers give importance to the quality before
purchasing of the routine items. It is further added that 92 out of 280 respondents consider
quality as the most important factor.Then it is followed by the price and Discounts respectively.
The „Others‟ factors illustrated above included those who consider more than one factors.
Table 2:Response Frequency
Percentage
Yes
242
86.4
No
38
13.5
Total 280
100
The respondents were asked a question whether they entrusted to buy a product related to
a good cause and the majority of them say yes. It shows that most of the people prefer to buy
goods related to the cause. Although a small group of respondent gives their negative opinion
related to cause related marketing.
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Table 3:Options
Frequency
Percentages
Sales Promotions
89
31.78
Cause
190
67.86
Both
1
0.36
Total 280
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100
The respondents were asked a question whether they prefer to get the benefits from sales
promotions activities or entrusted to contribute towards a good cause. And the respondents give
their preference with a majority of 67.86% in favor of a good cause. And only 89 out of 280
respondents prefer sales promotions like discounts, free samples etc…
Table 4:Alternatives
Frequency
Percentages
Education
145
51.79
Help for handicapped
88
31.43
Both
47
16.78
280
100
Total
We are able to know the responses of 280 respondents towards the various alternate
causes related to the different kind of products. As the term Cause related marketing is newly
introduced in Pakistan therefore,the choice is available in the limited fields only. Efforts are
being done in the field of education and health on priority basis. However, steps are required to
taken in other areas also.
Table 5:Response
Frequency
Percentage
Yes
215
76.79
No
65
23.21
280
100
Total
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Ariel is a brand name of a leading detergentof M/s Procter and Gamble. Arial introduced
a cause related marketing campaign, “Help the Needy” in the holy month of Ramzan in several
Islamic Countries of the world including Pakistan. Data given in the above said table is related to
the response of the respondents against the marketing campaign launched by the Ariel. Majority
of the respondents added that they have purchased Ariel in the month of Ramzan due to its
relation with a good cause.
Preference of the cause over sales promotion activities is dependent to the different
factors like age, profession, gender, qualification and as well as income level of the respondent.
And the dependency level was tested through Pearson Chi-square test of dependency. And it was
revealed from the results of the tests that there was no dependency of these factors and
respondents having similar preferences irrespective of their age, profession, qualification etc…
5).
Discussion and Conclusion
Now we are able to conclude from the above given data that quality is the most important
factor to purchase a routine item by the consumer. And majority of the consumer prefer to buy
the products related to a good cause like free education to the poor children, help to the
handicapped, health facilities etc.., over the sales promotion activities like discount, free samples
and any kind of scheme. Here we are able to conclude that all the hypotheses have been proved
and these findings support the previous works of Meyer, 1999; Dean, 2004; Vaidyanathan and
Aggarwal, 2005. Therefore, it has been proved from the above data that consumers preferred to
contribute towards the cause over any kind of incentives. Majority of the respondents are
entrusted to help the poor children for education and health specially. Although a small
proportion of the respondents are entrusted in different kind of incentives like discount, extra
quantity etc… It has also been proved with the help of different kind of tables that People are
similarly motivated towards the good cause having different ages, profession, and gender and
income levels.It has also become cleared from the results that people at Gujranwala prefer to buy
products related to the good cause. In this way they are able to help out the needy persons in
different fields of life. Therefore, if an organization is entrusted to get the maximum share from
the market at Gujranwala then they have to introduce a well designed marketing campaign
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related to a good cause especially in the field of education or health. In this way an organization
may attract a large number of customers towards their products or services.Any how some
customer having different point of view that organizations are using these tricks for the sake of
new customer.
Recommendations
As retention as well as attraction of the customer is important for the organization,
therefore, confidence of the customer is very important.And long term relationship of the
organization with the cause is the only way to satisfy the customers. It is further added that
Achievements and experiences are also required to be share with the public through publicity and
advertisementfor seeking confidence of the customers. Organizations are also required to be hire
services of the well known celebrities with a good reputation for seeking attention of the
customers. In this way doubts can be reduced and organization can enjoy the benefits of public
confidence over the campaign started by the organization associated with a good cause.
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