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Cause-related marketing: More than just a thought? A literature review on the effects of human information processing on consumers’ attitudes regarding CRM products and the related purchase intentions Author Supervisor T. Jaspers S901923 Student Business Administration Faculty of Economics and Business Administration Tilburg University Topic 18, cause-related marketing E.A.A. Dreezens Department of Marketing Table of contents Chapter 1. Introduction .............................................................................................................. 3 1.1 Problem background .................................................................................................. 3 1.2 Problem statement ...................................................................................................... 4 1.3 Research questions ..................................................................................................... 5 1.4 Conceptual model ....................................................................................................... 5 1.5 Relevance ................................................................................................................... 5 1.5.1 Academic relevance .................................................................................................. 5 1.5.2 Managerial relevance ................................................................................................ 6 Chapter 2. The definition of cause-related marketing ................................................................ 7 2.1 The definition of cause-related marketing........................................................................ 7 2.2 The Benefits of cause-related marketing .......................................................................... 7 2.3 Conclusions ...................................................................................................................... 9 Chapter 3. The course of human information processing ........................................................ 10 3.1 Introduction to the Elaboration-Likelihood model......................................................... 10 3.2 The Elaboration-Likelihood model ................................................................................ 10 3.3 Practical difficulties regarding the Elaboration-Likelihood model ................................ 12 3.4 The consumers’ motivation to process information ....................................................... 13 3.4.1 Motivation and routes of information processing ................................................... 13 3.4.2 Routes of information processing and consumers’ attitudes ................................... 14 3.4.3 Cause-related marketing and consumers’ motivation ............................................. 15 3.5 The consumers’ ability to process information .............................................................. 15 3.5.1 Intelligence & knowledge, consumers’ ability and consumers’ attitudes ............... 15 3.5.2 Situational factors, consumers’ ability and consumers’ attitudes ........................... 16 3.6 Conclusions .................................................................................................................... 17 Chapter 4. The consumers’ purchase intentions....................................................................... 18 4.1 The Theory of Planned Behaviour ................................................................................. 18 4.2 Purchase intentions ......................................................................................................... 20 4.3 Conclusions .................................................................................................................... 21 Chapter 5. Conclusions ............................................................................................................ 22 5.1 Conclusions .................................................................................................................... 22 5.2 Managerial implications ................................................................................................. 22 5.3 Suggestions for further research ..................................................................................... 23 2 Chapter 1. Introduction This chapter will address the problem background as an introduction to the term cause-related marketing. From here the problem statement, the research questions and the conceptual model will be formed. Then, the academic as well as the managerial relevance will be discussed. 1.1 Problem background Cause-related marketing (CRM) can be defined as ‘marketing activities in which company donations to a specified cause are based upon sales of specified goods or services’ (Larson, Flaherty, Zablah, Brown & Wiener, 2008, p.272). One of the earliest and maybe one of the most famous examples dates from 1982. The Statue of Liberty was in need of restoration and the American Express company launched a very successful campaign, where American Express contributed one penny to the restoration project for every purchase a customer made with his or her American Express Card. The campaign raised $1.7 million, but more importantly, the transactions made by American Express card holders rose by 28 per cent in just the first month and the new card applications rose by 45 per cent (Kelly, 1991). Various benefits of cause-related marketing have been discussed in the literature. From a company’s perspective a better brand image and a loyal customer base (Pracejus & Olsen, 2004; Bandyopadhyay & Martell, 2007) are a few benefits that can lead to higher sales and an increased market share (Ross, Patterson & Stutts, 1992; Oldenburg, 1992). But to claim any of these benefits, the company has to make consumers aware of the cooperation between the company and the cause, so the company and the cause have to set up a CRM campaign. A CRM campaign is designed for changing the consumers’ opinion, or for eventually altering the consumers’ behaviour in a way that generates income for both the company and the cause. But exactly what happens when a consumer is exposed to a CRM campaign? And how could this exposure to a CRM campaign be related to consumers’ purchase intentions? These questions shall be answered by using the Elaboration-Likelihood model (ELM) (Petty & Cacioppo, 1986) and in addition, the Theory of Planned Behaviour (TPB) (Ajzen, 1985). According to the Elaboration-Likelihood model (ELM) (Petty & Cacioppo, 1986), consumers’ attitudes are formed or changed when consumers process information from a marketing message. Processing information can be done in two ways; in a high involvement manner (the central route) or in a low involvement manner (the peripheral route). The two key variables that determine by which route consumers process information are consumers’ 3 motivation to process information and consumers’ ability to process information (Petty & Cacioppo, 1986; Rucker & Petty, 2006). The main focus of this study lies on explaining how consumers’ attitudes towards the buying behaviour regarding products from CRM campaigns are influenced by these two variables. Here, the variable attitude is defined as a general predisposition to behave favourably or unfavourably towards a certain object (Park & Macinnis, 2006, p.16) The next step in this study will be to explain how consumers’ attitudes towards the buying behaviour are related to behavioural intentions. This shall be done by using the theory of planned behaviour (TPB) (Ajzen, 1985). Instead of focussing on consumers’ attitudes towards brands or products, this study focuses on consumers’ attitudes towards the buying behaviour. Focussing on consumers’ attitudes towards the buying behaviour facilitates using the theory of planned behaviour (TPB) (Ajzen, 1985) in the conceptual model, since the TPB proposes that an attitude towards a behaviour is one of three determinants for behavioural intentions, together with subjective norm and perceived behavioural control. According to the TPB (Ajzen, 1985), behavioural intentions and perceived behavioural control are assumed to be predictors of the behaviour itself. In this study the consumers’ behavioural intentions will be replaced by the consumers’ purchase intentions, since ‘purchase intentions’ is in this case the specified behaviour that is proved to be a predictor for consumers’ buying behaviour (Morwitz, Steckel & Gupta, 2007; Bemmaor, 1995), and eventually consumers’ buying behaviour will generate income for both the company and the cause. Furthermore, in this study, only the relationship between the variable attitude towards the behaviour (in this case towards consumers’ buying behaviour) and the variable behavioural intention shall be used as an extension to the variables motivation to process information and ability to process information. The other two variables, subjective norm and perceived behavioural control, are excluded from the conceptual model because including these determinants could make the conceptual model too complex and this could jeopardize the feasibility of this study. The relationship between behavioural intentions and the behaviour itself will not be included, since the predictive power of the variable behavioural intentions is impaired because of the exclusion of subjective norm and the perceived behavioural control. 1.2 Problem statement Based on the problem background the following research question can be developed: 4 How do consumers’ motivation and ability to process information influence consumers’ attitudes and how do consumers’ attitudes influence the related purchase intentions? 1.3 Research questions 1. What is cause-related marketing? 2. How does the consumers’ motivation to process information influence consumers’ attitudes towards the buying behaviour regarding CRM products? 3. How does the consumers’ ability to process information influence consumers’ attitudes towards the buying behaviour regarding CRM products? 4. In what way do consumers’ attitudes towards the buying behaviour regarding CRM products influence consumers’ purchase intentions regarding CRM products? 1.4 Conceptual model Based on the problem background, the problem statement and the research questions, the following conceptual model is drawn. 1.5 Relevance 1.5.1 Academic relevance Multiple studies have focused on various, specific aspects of the relationship between CRM and consumers’ attitudes towards firms or brands. For example, Ross et al. (1992) showed that consumers hold a more favourable attitude towards a firm that supports a local cause than a firm that supports a national cause. They also found that women hold a more positive attitude towards the firm than men do. Samu and Wymer (2009) discovered that there is an interaction effect between the perceived fit and the dominance of the advertisement. When the perceived fit and the dominance where higher, the attitude towards the brand in the CRM campaign were significantly more favourable. All these studies have been done because CRM campaigns have specific features that normal marketing campaigns do not have. For instance, because a CRM campaign consists of 5 a charity and a company, the charity should be selected carefully and the consumer needs to be informed well about the company’s and charity’s motives in order to reduce the consumers’ distrust (Nan & Heo, 2007; Lafferty, 2007). Furthermore, a CRM advertisement campaign generally features cues (logos, celebrities, pictures, background music) that are intended to affect the consumers’ emotions, and these emotions (positive or negative) can influence consumers’ attitudes towards brands (favourably or unfavourably) (Rucker & Petty, 2006). Thus, a CRM campaign is combination information and cues that are carefully selected in order to persuade the consumer (Grau & Folse, 2007). However, no study has focused on explaining how the manner in which consumers process this information and these cues from a CRM campaign could influence consumers’ attitudes towards the buying behaviour, and how this subsequently would influence consumers’ purchase intentions regarding products from CRM campaigns. 1.5.2 Managerial relevance For managers, this study gives a very useful insight for understanding how to communicate a CRM message in a most effective way, that is, the way that benefits the company (and the cause) most. The ELM (Petty & Cacioppo, 1986) assumes that there are two routes to persuasion, the central route and the peripheral route. Each route has specific implications for effectively communicating a message, and thus the marketer needs to adjust his campaign to his marketing goals. In the central route, the route where consumers have high motivation and a high ability to process information, the consumer generally requires more detailed information to form a solid attitude. The peripheral route is the route where the consumer does not have much motivation and does not have a high ability to process information. So here, the marketer needs to focus on peripheral cues like pictures, background music or the people to choose in the CRM campaign (e.g. celebrities). Thus, by providing this framework, the marketer knows which implications follow from the CRM campaign. 6 Chapter 2. The definition of cause-related marketing This chapter will serve as an introduction to the phenomenon cause-related marketing. In the first paragraph, a definition of cause-related marketing (CRM) will be given, as well as an explanation why this definition is chosen. The second paragraph will treat benefits of CRM from the company’s perspective. 2.1 The definition of cause-related marketing In this paper, Larson et al.’s (2006, p.391) definition of cause-related marketing will be used, where CRM is described as ‘marketing activities in which company donations to a specified cause are based upon sales of specified goods or services’. The crucial factor for using this definition lies in the fact that this definition pairs the companies’ donations with causes, and that this definition also links the donations with the ‘sales of specified goods or services’. Some broader definitions (e.g. the pairing of a firm and a charity in a marketing effort’ (Basil & Herr, 2006, p.391)) do not link the donation size based on sales or donations in general with CRM. By excluding the donation size (based on sales), any general marketing activity between firms and causes, such as a sponsorship activity, which is in fact a form of corporate philanthropy, would also fall under CRM. However, CRM should not be seen as solely a form of corporate philanthropy, because besides all the ethical or social motives companies may have for using CRM, companies want to make sales and profits and CRM should as well be viewed as a tool for making those extra sales and profit (Varadarajan & Menon, 1988; Webb & Mohr, 1998). 2.2 The Benefits of cause-related marketing Nowadays consumers might face some problems when they buy products, because of the wide range of products that is being offered to them by companies. To stand out from other companies, companies would like to sell products that are distinct from the competitors’ products in one or more aspects; this is called the unique selling proposition, or the unique selling point (Miller & Henthorne, 2007). A few examples of unique selling points are, that a certain product is cheaper, a certain product has a higher quality or the company wants to provide a product with higher quality services (e.g. customer helpdesk, delivery service). Another example of a unique selling point is CRM, not only because it is a cooperation between a company and a charity, but also because consumers are directly involved in the 7 donation process since consumers contribute money that will be donated to the cause by the purchases consumers make (Larson et al., 2008). Thus, one could say CRM has an altruistic nature (Lafferty & Goldsmith, 2005), which is both beneficial and a unique selling point in the contemporary marketplace. The latest advertisement campaign of Crystal Clear is an excellent example for clarifying the possible benefits that arise from CRM. In cooperation with Plan Nederland Crystal Clear started an advertising campaign which is called ‘Women in Control’1. The money that is raised by the sales will be invested in developing countries for women to live their lives independently. In the commercials, solely women are shown in a rather ‘independent’ setting. For example, in one commercial two happy women have independently reached the top of the Mount Everest and they enjoy that moment with a soft drink of Crystal Clear. Then a reference to ‘Women in Control’ is being made in the commercial. In another commercial, the focus lies again on independent, happy women, but this time working women in developing countries are shown. This time, consumers are told to buy Crystal Clear because by buying Crystal Clear soft drinks, the consumer supports the Women in Control Fund. Here Crystal Clear breaks through the advertising clutter from all the soft drinks (Oldenburg, 1992) and thereby differentiates the brand Crystal Clear from other soft drinks (Schlegelmilch & Woodruffe, 1995). Another possible benefit that arises from CRM is market segmentation (Bennet, 2002), which can be defined as defining submarkets (groups of consumers) based on specific characteristics of consumers (Chen, Cho, Poudyal & Roberts, 2009). By cooperating with Plan Nederland and promoting itself as a soft drink for women that supports other women, women who like to support the idea of independent women are more easily targeted (File & Prince, 1998). Consumers are likely to perceive brands that engage in CRM as being altruistic and generous (Hoeffler & Keller, 2002). In the Crystal Clear example, consumers could be inclined to value the brand Crystal Clear higher than other brands based on those characteristics (e.g. generous, altruistic) which the consumers ascribe to the brand (Polonsky & MacDonald, 2000). The extra value consumers ascribe to the brand based on those specific characteristics is called the brand equity (Netemeyer et al., 2004). Also, when consumers of Crystal Clear identify themselves with the brand and/or the cause, the consumers could 1 http://www.crystalclear.nl/in-control 8 remain loyal to the brand for a long period of time, which is beneficial in the long run (Pracejus & Olsen, 2004). Not only the relationship between consumers and a company is believed to improve thanks to CRM campaigns. Also the relationship between a company and other stakeholders is likely to improve, such as the relationship between a company and shareholders (Smith, 1990), between a company and important people in public life (Smith, 1990), but also between a company and employees, whose morale is likely to be improved (Bennett, 1997; File & Prince, 1998). This improved relationship is likely to be accomplished, because CRM is accompanied with positive publicity, which gives stakeholders an insight in which activities the company is currently engaging (Nichols, 1990). All mentioned benefits are excellent for a company to build a good relationship with its customers. But CRM does not only help to build a good relationship between a company and customers and/or stakeholders (Smith, 1990), it ultimately will effect sales and market share. Sales are most likely to increase (Kropp, Holden & Lavack, 1999), which is very well illustrated in the example of the Statue of Liberty in which transactions rose by 28 per cent in just the first month and the new card applications rose by 45 per cent (Kelly, 1991). When sales increase with a higher percentage than the overall market, market share also increases. For example, Pracejus and Olsen (2004) tested under laboratory conditions the effects of CRM campaigns on market share. They tested what effect a CRM campaign would have on market share. In their study, respondents where exposed to different CRM campaigns in which some charities had a high fit with a theme park and some charities had a low fit with a theme park. They calculated that market share rose by 8.3 % for the low-fit setting and by 17.3 % for the high-fit setting. Apparently, the amount of fit amplified the effects of CRM (Pracejus & Olsen, 2004). 2.3 Conclusions This chapter has described CRM as a marketing activity in which company donations to a charity are based upon sales of specified goods or services. Furthermore, this chapter has described important benefits of CRM from a company’s perspective. Market differentiation and market segmentation is easier to accomplish when a company uses CRM. Also, CRM helps to build brand equity and brand loyalty. Moreover, the relationship with stakeholders is likely to improve. Finally, sales and market share are most likely to increase when a company uses CRM. 9 Chapter 3. The course of human information processing This chapter discusses how the course of human information processing influences consumers’ attitudes towards the buying behaviour regarding CRM products. The first paragraph will explain why the Elaboration-Likelihood model was chosen for this research. The second and third paragraph will treat the Elaboration-Likelihood model and its practical difficulties. The fourth and fifth paragraph will answer the question how consumers’ motivation and ability to process information influence consumers’ attitudes towards the buying behaviour regarding CRM products. 3.1 Introduction to the Elaboration-Likelihood model Two models which are often used in the marketing literature for explaining how consumers process information from a persuasive message, are the Heuristic Systematic Model (HSM) (Chaiken, 1980) and the Elaboration-Likelihood Model (ELM) (Petty & Cacioppo, 1986). Both models share the view that in order to form or change an attitude, the consumer can process information in two manners, in a manner in which the consumer has a lot of motivation to process information and many cognitive resources (central processing and systematic processing) or in a manner in which the consumer does not have a lot of motivation to process information and does not have many cognitive resources (peripheral processing and heuristic processing) (Rucker & Petty, 2006; Zuckerman & Chaiken, 1998). While both models seem to be suitable for this research, only one model could be integrated into the conceptual model. Two motives for using the ELM are firstly that the ELM focuses on the formation process of attitudes, whereas the HSM also focuses on different types of involvement consumers have when consumers process information (Chaiken, 1980). This makes integrating the HSM into the conceptual model more difficult. And secondly, the HSM does not consist of useable variables for investigating the formation process of attitudes, whereas the ELM uses the variables motivation and ability to process information (Petty & Cacioppo, 1986). In addition to previously mentioned motives, the ELM is proved to be an excellent model for explaining the formation process of attitudes. That is why the ELM was chosen for this study and was thereby integrated into the conceptual model. 3.2 The Elaboration-Likelihood model 10 The ELM distinguishes two routes under which consumers process information, the central route and the peripheral route (Petty & Cacioppo, 1986). When both motivation to process information and ability to process information are high, the consumer processes information under the central route. Under this route, not only external information (from the persuasive message) but also all internal relevant information (previously stored information) is deliberately taken into account by the consumer (Dotson & Hyatt, 2000; Rucker & Petty, 2006). In the light of CRM, an example of central processing could be the processing of both strong arguments (e.g. facts) from the advertisement and the processing of previously stored information about the cause and/or the company. Obviously, under central processing, the initial state of attitudes will only change favourably or unfavourably if the nature of the thoughts that come up in the consumers’ minds are positive or negative. When the nature of the thoughts are neutral, no alteration of attitudes will occur (Rucker & Petty, 2006). When either motivation or ability to process information is low, information will be processed under the peripheral route. Here, the consumer unconsciously looks for peripheral cues (pictures, logos, symbols or background music) or heuristics. Heuristics can be defined as ‘simple decision rules’ (Zuckerman & Chaiken, 1998 p.621). Price can be an example of a heuristic, in this case the consumer could perceive a high price of a product as an indicator of high quality and a low price as an indicator of low quality (Darke, Freedman & Chaiken, 1995). An other example of a heuristic is the fact that the consumer could agree on the content of a message based on the expertise of the messenger in a campaign (Chaiken, 1980). Peripheral processing could as well be accompanied by classical conditioning (Till, Stanley & Priluck, 2008). In the context of cause-related marketing, a highly respected expert, in for example the field of sports, could make a statement (the conditioned stimulus) in an advertisement why a CRM product benefits a certain cause. The use of this expert could generate a certain emotion (e.g. trust, arousal, surprise) which is called the unconditioned stimulus (Till, Stanley & Priluck, 2008). Although the conditioned stimulus and unconditioned stimulus are unrelated, the consumer pairs them together so that the CRM product, CRM brand or a certain behaviour is associated with that certain emotion. When a campaign or advertisement solely consists of peripheral cues and heuristics, the consumer saves energy and time because no elaboration is needed to process detailed information. This is why, generally speaking, consumers tend to prefer putting less effort in processing information from advertisements or campaigns (Darke, Freedman & Chaiken, 1995). In some cases, a consumer does not have motivation or ability to process information from the persuasive message, nor does he get stimulated by any cues or heuristics. In this 11 case, no information will be processed and obviously, no alteration of consumer attitude has taken place (Petty & Cacioppo, 1986). 3.3 Practical difficulties regarding the Elaboration-Likelihood model Although the ELM gives a clear insight on how attitudes are formed when consumers process information (Areni, 2003), there are some practical difficulties which could make it difficult for marketers to apply the ELM. First of all, the ELM fails to explain how given information or cues could interact with the manner in which consumers process information. For instance, if a CRM advertisement consists of central cues (e.g. strong arguments, many facts) that a consumer finds interesting, consumers’ motivation to process the advertisement is most likely to increase (Grau & Folse, 2007). To elaborate on this, some consumers have a higher motivation to engage in cognitive activities than other consumers; this desire is called the need for cognition (Steinhart & Wyer, 2009). The fact that some consumers may have a higher need for cognition results from the consumers’ intrinsic desire to engage in challenging cognitive activities (e.g. actively processing information from the add), but also from an extrinsic desire to achieve positive outcomes (e.g. supporting charities) and avoid negative outcomes (e.g. neglecting charities). Steinhart and Wyer (2009) demonstrated that when individuals’ need for cognition increases, the motivation to complete tasks also increases. Thus cues of CRM campaigns can enhance both intrinsic and extrinsic desires and thereby also the consumers’ motivation (Steinhart & Wyer, 2009; Reinhard & Dickhäuser, 2009). Here, the ELM alone does not explain how information and cues could influence consumers’ motivation. In addition, Mackenzie, Lutz and Belch (1986) showed that peripheral processes and central processes can be interrelated when message acceptance is taken into account during cognitive processing. Message acceptance is determined by the degree in which beliefs correspond with statements from campaigns (Areni, 2002). For example, the use of an expert is considered to be a peripheral cue or a heuristic, especially if an expert’s argument corresponds with the opinion of the consumer. But when an expert’s argument does not correspond with the consumer’s opinion, the consumer is likely to put more elaboration in retrieving additional information, and thus tends to process information under the central route (Petty & Cacioppo, 1986). Here a peripheral cue has initiated central processing of information, and the ELM does not give a clear view on the interrelationship between peripheral and central processing. 12 Various studies have demonstrated the importance of the quality of information and arguments in advertisement campaigns (e.g. Peracchio & Meyers-Levy, 1997; Shiv, Edell & Payne, 1997). However, practical problems regarding the ELM arise when the quality of information and arguments is taken into consideration. The ELM only categorises central cues and peripheral cues (Petty & Cacioppo, 1986). But the ELM does not categorise the information, arguments and cues based on (perceived) quality, and thereby does not answer the question why information, arguments and cues would in fact be effective or ineffective (Boller, Swasy & Munch, 1990). 3.4 The consumers’ motivation to process information 3.4.1 Motivation and routes of information processing According to the ELM, consumers’ motivation to process information directly influences the consumers’ course of information processing (Petty & Cacioppo, 1986). Motivation can be defined as ‘the process that temporarily enhances sensitivity to specific stimuli and produces goal-directed behaviours’ (Anselme, 2010, p. 292). It is determined by several other factors, such as degree to which a consumer finds the information relevant (Petty & Cacioppo, 1979b), the degree to which a consumer feels personally responsible for processing the information (Petty, Harkins & Williams, 1980) and degree to which a consumer takes pleasure out of thinking in general (Haugtvedt, Petty & Cacioppo, 1992). Because consumers’ motivation to process information directly influences the consumers’ course of information processing, it eventually affects consumers’ attitudes towards the buying behaviour regarding CRM products. Mackenzie and Spreng (1992) have two explanations why consumers’ motivation to process information would determine the route under which the consumers process information. Both explanations find empirical support across the literature, and thus both explanations may be true (Mackenzie & Spreng, 1992). The first explanation states that if consumers’ motivation to process information increases, the impact of processing central cues (e.g. arguments, facts) on consumers’ attitudes towards the buying behaviour increases, and the impact of processing peripheral cues (e.g. background music, celebrities and symbols) on consumers’ attitudes towards the buying behaviour decreases (for empirical support: Celsi & Olson, 1988; Miniard, Bhatla & Rose, 1990). The second explanation assumes that when consumers’ motivation to process information increases, the impact on consumers’ attitudes towards the buying behaviour remains the same (Mackenzie & Spreng, 1992). In this case, when consumers’ motivation to process information increases, only the strength of the 13 relationship between peripheral processing and consumers’ attitudes towards the buying behaviour decreases, and only the strength of the relationship between central processing and consumers’ attitudes towards the buying behaviour increases (for empirical support: Gardner, 1985; Lutz, MacKenzie & Belch, 1983; Droge, 1989). Both theories correspond to the idea that highly motivated consumers tend to process information systematically, and thus tend to follow the central route (Maheswaran & Chaiken, 1991). 3.4.2 Routes of information processing and consumers’ attitudes Consumers can be highly motivated to process information, and can thus be more likely to process information under the central route (Petty & Cacioppo, 1986). This has a significant impact on their attitudes towards the buying behaviour regarding products from CRM campaigns. For instance, consumers are more likely to form solid attitudes that are not easily changed by counterarguments from competitors (Petty & Cacioppo, 1986; Sengupta, Goodstein & Boninger, 1997). The success of the CRM campaign can be dependent on the consumers’ resistance to counter-messages from the company’s competitors (Sengupta, Goodstein & Boninger, 1997). Also, compared to attitudes towards the buying behaviour which are formed under the peripheral route, attitudes towards the buying behaviour which are formed under the central route are generally better predictors for long-term purchase intentions and other judgements than solely regarding the CRM product and cause (Petty, Haugtvedt & Smith, 1995). One possible explanation for this could be that attitudes which are formed under the central route require much thought, are easily retrieved into one’s mind when needed and are held with much confidence (Maheswaran & Chaiken, 1991). If consumers are not motivated to process information, and thus are more likely to unconsciously process cues and heuristics under the peripheral route, consumers’ attitude towards the buying behaviour regarding CRM products is most likely to alter for only a short period of time. To elaborate on this, peripheral processing could be accompanied by an emotional change, because cues could generate certain type of emotions (e.g. joy, trust, fear). Since emotions are typically short of duration (Bosman & Winden, 2002), consumers’ attitudes towards the buying behaviour regarding CRM products is thus most likely to be influenced for a relatively short period of time. One notion should be made, the effect of peripheral cues which provoke emotional change should not be underestimated. Bosman and Winden (2002) mention that emotions can be very influential in consumers’ decision making process, because emotions tend to show up unintentionally when a decision has to be made. 14 3.4.3 Cause-related marketing and consumers’ motivation The question arises whether CRM campaigns increase consumers’ motivation to process information. The answer to this question would have significant consequences since a higher motivation would make the consumer inclined to process information under the central route, and thus a more solid, easily retrievable attitude towards the buying behaviour would be formed (Maheswaran & Chaiken, 1991). On one hand it seems clear that generally speaking consumers find CRM attractive and thereby consumers’ motivation to process information increases because of CRM campaigns (Petty & Cacioppo, 1986; Smith & Alcorn, 1991). But on the other hand it should be kept in mind that the given information and cues could also interact with consumers’ motivation to process information (Grau & Folse, 2007; MacInnis, Moorman & Jaworski, 1991). The Crystal Clear campaign will be used as an example to illustrate this. The Crystal Clear campaign consists of several peripheral cues, such as background music, celebrities, the logo of Plan Nederland, bright colours and smiling faces of people from all over the world2. In addition, plenty of information regarding the supporting activities of the cause is given in the campaign. For interested consumers, a link to the website is given, where additional information is given. This campaign clearly consists of both central and peripheral cues, and thus, in this case, the marketer could provoke both central and peripheral processing, depending on the degree to which the consumer finds the content of the campaign personally relevant (Petty & Cacioppo, 1986; Celsi & Olsen, 1988). Consumers who are interested in Crystal Clear or CRM will have a higher motivation to process this advertisement, and thus central processing is likely to occur. MacInnis, Moorman and Jaworski (1991) note that providing additional information and cues could make a CRM campaign more relevant to consumers who find Crystal Clear or CRM less interesting, and thereby consumers’ motivation to process information would still increase. In summary, CRM campaigns could increase consumers’ motivation, but whether consumers’ motivation would actually increase depends on the consumers’ characteristics (what consumers find personally relevant) and on the transmitted peripheral and central cues consumers receive (MacInnis, Moorman & Jaworski, 1991). 3.5 The consumers’ ability to process information 3.5.1 Intelligence & knowledge, consumers’ ability and consumers’ attitudes 2 http://www.crystalclear.nl/in-control 15 The consumers’ ability to process information is for a large part influenced by the consumers’ intelligence and knowledge about CRM. As the consumers’ intelligence or knowledge about companies and charities rises, the consumers’ ability to encode and to classify information increases, which also creates an increase in learning abilities (Johnson & Russo, 1984). When the consumer encodes and classifies information more efficiently, consumers’ ability to process information rises and thus the consumer is more likely to process information under the central route (Johnson & Russo, 1984; Petty & Cacioppo, 1986). In the context of CRM, when a consumer with a lot of experience or with a lot of knowledge of the brand, of the cause or of marketing in general watches an advertisement that promotes to buy a CRM product, he is most likely to process the information under the central route. In this case, based on the thoughts (favourable or unfavourable) that come up, a strong, enduring attitude (positive or negative) towards the buying behaviour regarding CRM products would be formed (Rucker & Petty, 2006). 3.5.2 Situational factors, consumers’ ability and consumers’ attitudes Factors that are specific to the situation in which consumers process information could also influence consumers’ ability to process information (Petty & Cacioppo, 1986). Time is an example of a situational factor that could influence the consumers’ ability to process information. One could see that the available amount of time is always constrained by other factors such as the consumers’ environment or the consumers’ agenda. Because the available amount of time is always constrained, consumers want to spend it wisely. That is why consumers, or people in general, see time as an opportunity cost (Berry, 1996). As time pressure increases, the constrains of time inhibit the consumers’ ability to put effort in information processing, and thus consumers are more likely to process cues or heuristics under the peripheral route (Rieskamp & Hoffrage, 2008). One other example of a situational factor that could influence consumers’ ability to process information is the amount of distraction the consumer experiences (Biswas, Biswas & Chatterjee, 2008). When a consumer is distracted, his attention is drawn away from the persuasive message. Now distraction has a negative impact on the consumers’ memory (Barrouillet, Bernardin, & Camos, 2004). Thus now, consumers are less likely to put effort in processing information, because consumers will have more difficulties in memorizing information. In addition, extreme levels of distraction could make the process of memorizing impossible for the consumer. Thus, distraction reduces consumers’ ability to process information, and thereby gives the consumer a tendency to process cues or use heuristics 16 under the peripheral route (Barrouillet, Bernardin & Camos, 2004). In addition, Biswas, Biswas and Chatterjee (2008) investigated if the sequence of transmitted peripheral cues could influence the consumer decision making process. They demonstrated that under normal circumstances without distraction, the cues that are firstly transmitted will have a greater impact on the consumer decision making process than cues that are later on transmitted. When the consumer is distracted, a reversed process takes place. The consumer’s decision making process is more influenced by cues that the consumer had received in a later stage than by cues that were received in an initial stage. When consumers’ ability to process information is low, consumers are most likely to process information under the peripheral route. Peripheral processing forms, compared to central processing, attitudes towards a behaviour, firm or brand more quickly, since little effort on the consumers’ side is required in the formation process (Rucker & Petty, 2006). However, consumers’ attitudes towards the buying behaviour regarding CRM products are also less enduring and more easily changed by counterarguments from competitors (Rucker & Petty, 2006; Sengupta, Goodstein & Boninger, 1997). 3.6 Conclusions This chapter has investigated whether consumers’ information processing influences consumers’ attitude towards the buying behaviour regarding CRM products by using the ELM. The two main variables of the ELM that describe how attitudes are formed, motivationand ability to process information were investigated. When a consumer has both motivation and ability to process information, and thus central processing occurs, a stable and enduring attitude towards the buying behaviour is formed. When a consumer lacks either motivation or ability to process information, and thus peripheral processing occurs, a less enduring attitude towards the buying behaviour is formed which is more easily changed by counterarguments of competitors. However, peripheral processing is a process that requires little time and is generally speaking preferred by consumers. CRM campaigns are most likely to increase consumers’ motivation to process information. However, it should be kept in mind that information and cues used in the campaign could also have an effect on consumers’ motivation to process information. Consumers’ ability to process information is not likely to be influenced by CRM, since situational factors cannot be influenced by CRM campaigns. Only information about the company or the charity in a CRM campaign could slightly increase consumers’ ability. 17 Chapter 4. The consumers’ purchase intentions This chapter will explain how consumers’ attitudes towards the buying behaviour is related to consumers’ purchase intentions. The first paragraph treats the Theory of Planned Behaviour (TPB) (Ajzen, 1985). In the second paragraph, the relationship between consumers’ attitudes towards the buying behaviour and consumers’ purchase intentions will be studied. 4.1 The Theory of Planned Behaviour The Theory of Planned Behaviour (TPB) (Ajzen, 1985) was developed as an extension of the Theory of Reasoned Action (TRA) (Fishbein & Ajzen, 1975). The TPB is used as a conceptual framework for explaining human actions (Ajzen, 2001). Figure 4.1 The theory of Planned behaviour (Ajzen, 1985) To explain human behaviour, the theory assumes that two variables determine the likelihood a certain behaviour will occur. Those two variables are behavioural intentions and perceived behavioural control (Ajzen, 1985; Ajzen, 2002). Perceived behavioural control can be defined as the perceived ease or difficulty of performing the behaviour (Ajzen 2002, p.665). As mentioned in the first chapter, the consumers’ purchase intentions are the behavioural 18 intentions on which this study focuses. So according to the TPB, buying a CRM product, from the consumer’s point of view, is determined by the purchase intentions the consumer has and the amount of ease or difficulty the consumer perceives when he is performing the behaviour. (Ajzen, 2002) For instance, when the consumer goes out to buy a CRM product, for example a Crystal Clear soft drink, the consumer can perform all the right actions to buy the soft drink, such as going to the super market, performing a search for the product and bringing a sufficient amount of money to buy the product. But the consumer also has to deal with certain circumstances, such as the availability of the product in his area. In most cases the consumer probably does not perceive much behavioural control, but when he knows Crystal Clear supplies to only a few supermarkets in his area, the perceived behavioural control is much lower. In this case, the perceived behavioural control (in the form of product availability) does not only restrict the consumer from actually buying the product when the product is not available, but may also inhibit the consumers’ purchase intentions, because the consumer perceives his capabilities to actually purchase the CRM product is substantially too low (Ajzen, 1985; Ajzen, 2002; Bandura, 1991). Thus perceived behavioural control influences behavioural intentions and actual behaviours. But the TPB proposes that two other variables, subjective norm and attitude towards a behaviour, also influence behavioural intentions. Subjective norm can be defined as the perceived social pressure from significant others to perform a certain behaviour (Ajzen, 2002; Cheung & Lee, 2010). For example, when the consumer’s significant others (e.g. family or friends) deliberately support charity by buying CRM products, the consumer might feel some social pressure, and therefore be inclined to support the charity as well by buying a CRM product. In the TPB, attitude towards a behaviour can be defined as the consumer’s evaluation (favourably or unfavourably) of engaging in a single behaviour or a set of behaviours (Fishbein & Ajzen, 1975). According to the TPB, attitude towards a behaviour, subjective norm and perceived behavioural control are all assumed to be results of the consumers’ beliefs (Ajzen, 1985). For instance, attitude towards a behaviour is a result of the consumers’ underlying beliefs about the consequences of the related behaviour (Ajzen, 2002). For example, if the consumer believes that buying a CRM product will have positive consequences (e.g. supporting a certain cause or satisfaction from the product), the attitude towards the buying behaviour will probably be favourably towards buying the CRM product. The subjective norm is also a result of the consumers’ beliefs, more specifically, it is a result of consumers’ beliefs about expectations of other people, especially the expectations of significant others (Ajzen, 2002). 19 Perceived behavioural control is assumed to be a result of the consumers’ beliefs about the likely consequences about the behaviour (Ajzen, 2002). The TPB has been widely used as a predictor for all kind of behaviours, such as weight loss behaviours (Schifter & Ajzen, 1985), driving behaviours (Elliot & Armitage, 2009), social networking behaviours (e.g. the use of facebook) (Cheung & Lee, 2010) and of course as a predictor for consumer choice (Han, Hsu & Sheu, 2010; Cannière, Pelsmacker & Geuens, 2009). In general, the TPB seems to predict behavioural intentions very well. In an analysis of previous studies, Ajzen (1991) found that the three variables of the TPB (attitude towards behaviour, subjective norm and perceived behavioural control) that should determine behavioural intentions, in fact explained 31%-88% of the variance of behavioural intentions. In an analysis of 185 previous studies, Armitage and Conner (2001) found that attitude, subjective norm and perceived behavioural control explained 39% of the variance of behavioural intentions, and in addition, 27% of the variance of the actual behaviours. 4.2 Purchase intentions When consumers’ motivation and ability to process information is high, the consumer is likely to process the information under the central route (Petty & Cacioppo, 1986). Attitudes towards consumers’ buying behaviour that are formed under the central route are generally stronger, are more easily retrieved from the mind, are less likely to be influenced by competitors and are generally better predictors for long-term purchase intentions (Maheswaran & Chaiken, 1991; Petty, Haugtvedt & Smith, 1995; Sengupta, Goodstein & Boninger, 1997). On the other hand, under peripheral processing, which occurs when consumers’ motivation and/or ability to process information is low, consumers’ attitudes towards the buying behaviour is typically short of duration and relatively easily changed by competitors (Petty, Haugtvedt & Smith, 1995; Sengupta, Goodstein & Boninger, 1997). However, attitudes towards the buying behaviour formed under the peripheral route could also influence consumers’ purchase intentions. To elaborate on this, consumers generally prefer to put few effort in processing information from advertisements or campaigns (Darke, Freedman & Chaiken, 1995). Thereby consumers’ motivation to process information is low. But still, strong and relevant peripheral cues could engage the consumer to process the cues under the peripheral route, and an immediate change in consumer attitude towards the buying behaviour would occur (Rucker & Petty, 2006). In this scenario, consumers’ attitudes towards the buying behaviour would then have a significant positive or negative impact on the purchase intentions and the buying behaviour, depending on the nature of the consumers’ 20 attitudes towards the buying behaviour (Lee, Park, Moon, Yang & Kim, 2009). In addition, sometimes it is only possible for a marketer to persuade a consumer under the peripheral route (Rucker & Petty, 2006). For example, consumers are exposed to many campaigns and television commercials. This exposure makes the consumer less motivated and/or able to process all the campaigns with full attention. In this case, to persuade the consumer and to cause any attitude change, the marketer has to use peripheral cues (Rucker & Petty, 2006). Regarding CRM, various studies have demonstrated that CRM campaigns have a positive impact on consumers’ purchase intentions. Ross, Patterson and Stutts (1992) found that after a consumer was exposed to a CRM advertisement, consumers’ purchase intentions had increased. In Ross, Patterson and Stutts’ study, this increase of consumers’ purchase intentions could be the result of an increased attitude towards the firm, an increased attitude towards the cause, a favourable attitude towards the campaign and of a remarkably favourable attitude towards the board of directors of the cause. Smith and Alcorn (1991) did a research to switching behaviours and buying behaviours. In their study, they found that 46% of the respondents would switch to brands that the respondent perceives as socially responsible. Also, 30% of the respondents said that they where inclined to buy the CRM products, solely because the company is engaging in a cause-related marketing effort. Lee et al. (2009) conducted a research in South-Korea into consumers’ purchase intentions when the firms where engaging in corporate philanthropy. In this research respondents’ purchase intentions was impacted positively by respondents’ attitudes, but in this case, respondents’ attitudes towards the firm. 4.3 Conclusions This chapter has investigated the relationship between the variables attitude towards the buying behaviour and the consumers’ purchase intentions, using the theory of planned behaviour. Chapter three showed that both strong and weak attitudes towards the buying behaviour could be formed, depending on the route under which consumers process information. Strong, stable attitudes towards the buying behaviour are useful for predicting long term purchase intentions. Although weak attitudes towards the buying behaviour are more easily changed by competitors, and are not useful for long term purchase intention predictions, they are very useful for predicting immediate purchase intentions and behaviours. Of course, consumers’ purchase intentions are only impacted positively (negatively) by attitude towards the buying behaviour when the nature of the attitude is favourable 21 (unfavourable). Regarding CRM, CRM campaigns have a positive effect on consumers’ purchase intentions. Chapter 5. Conclusions 5.1 Conclusions Firstly, the aim of this study was to investigate whether the manner in which the consumer processes information influences consumers’ attitudes towards the buying behaviour. The course of information processing was divided into two variables: consumers’ motivation to process information and consumers’ ability to process information. This study has demonstrated that regarding CRM, both variables have a significant impact on consumers’ attitudes towards the buying behaviour. Subsequently, in accordance with the TPB, this study has illustrated that consumers’ purchase intensions are either positively or negatively influenced by consumers’ attitudes towards the buying behaviour, depending on the nature (favourable or unfavourable) of consumers’ attitudes. CRM campaigns do have a positive influence on consumers’ attitude and the related purchase intentions. 5.2 Managerial implications Since the consumers’ ability to process information is determined by individual characteristics of the consumer and by situational factors, it is difficult for marketers to influence the consumers’ ability to process information. So marketers have to adjust their CRM campaign to the consumers’ ability to process information. Thus when the target consumer group’s ability to process information is likely to be high, marketers could decide to include central cues (information) to provoke central processing, and thus induce a strong, stable attitude. In this case the attitude is a relatively strong predictor for consumers’ purchase intentions. When consumers’ ability to process information is low, marketers should always include peripheral cues in order to be able to persuade the consumer. Here, a less stable attitude is formed which persist for only a short period of time. In addition, consumers’ attitudes towards the buying behaviour that is formed under peripheral processing will produce an immediate purchase intention of CRM products. 22 However, it is essential for marketers to realise that the consumers’ motivation is not only determined by characteristics of consumers, but could as well be aroused by characteristics of the CRM campaign. This implies it is safer to launch a CRM campaign with attractive peripheral cues, but also with some additional information to ‘feed’ the consumers’ motivation. While peripheral cues will provoke the formation of relatively less stable, less enduring attitudes, central cues provoke the formation of consumers’ strong, enduring attitude towards the buying behaviour. These strong, enduring attitudes are good predictors for consumer purchase intentions, especially for the intentions regarding long-term purchase decisions. Although the use of central cues may seem favourable towards the use of peripheral cues because of it’s benefits, the marketer has to remember that the formation of attitudes under the peripheral route is actually preferred by consumers since peripheral processing requires less effort than central processing. Marketers make good use of both central and peripheral cues in CRM campaigns, since eventually CRM campaigns have a positive influence on consumers’ purchase intentions. The Crystal Clear example illustrated that the proper use of central cues can stimulate consumers’ motivation to process information. Peripheral cues were used to persuade consumers who lack either motivation or ability to process information. Here, consumers are most likely to be influenced either by central cues or peripheral cues, depending on consumers’ motivation and ability to process information. 5.3 Suggestions for further research This study has conducted a research to consumers’ attitudes towards the buying behaviour, because according to the TPB, consumers’ attitudes towards the buying behaviour aims directly at consumers’ purchase intentions. Although theoretical support from the ELM indicate that CRM campaigns do influence consumers’ attitude towards the buying behaviour, no empirical support was found in the literature regarding consumers’ attitudes towards the buying behaviour. Further empirical research could reveal if, regarding CRM, consumers perceive their attitudes towards the brand or firm as being different from their attitudes towards the buying behaviour. Chapter three has showed there are practical problems regarding the ELM. One of those problems, the interrelationship of central and peripheral processing, could be overcome when both central and peripheral processing could occur simultaneously. The ELM assumes that either central or peripheral processing occurs, while the HSM proposes that both types of processing, heuristic and systematic processing, could occur simultaneously. Thus by using 23 the HSM, the problem of the view on the interrelationship of heuristic and systematic processing does not exist. could be overcome. Future research could also reveal if the view on the formation of attitudes towards CRM behaviours or CRM products is essentially different when the HSM is used. The examples which were used in this paper are based on necessity goods: normal products (e.g. normal food and drinks) that are consumed on a daily basis. However, it is also possible that a company combines a luxury good (exclusive, status products) with CRM. Significant differences between the effects of CRM on attitudes towards necessity goods and luxury goods, or on attitudes towards behaviours regarding necessity goods and luxury goods are likely to exist. Peripheral cues are most likely not sufficient to persuade a consumer, since detailed information about the product does not correspond with the nature of peripheral cues. 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