Download The Effect of Corporate Societal Marketing on Consumer

The Effect of Corporate Societal Marketing on Consumer Attitudes:
A Comparison of Strategies
Kate Westberg, RMIT University
Abstract
Corporate societal marketing refers to marketing strategies that encompass at least one social
objective. Increased consumer pressure on companies to behave more responsibly combined
with the competitive challenge of brand differentiation a brand through meaningful
engagement has stimulated interest in activities such as cause-related marketing (CRM).
Despite an increasing focus on CRM in the academic literature, there is a limited
understanding of how a CRM strategy compares to other traditional or societal marketing
strategies. This paper presents the results of a study that uses an experimental design to
compare the impact of CRM, sponsorship and sales promotion on consumer attitudes. The
findings indicate that, when controlling for existing brand attitude and perception of fit,
consumers have a more positive attitude to CRM and that CRM can elicit a more favourable
change in brand attitude.
Background
Corporate societal marketing has been described as encompassing ‘…marketing initiatives
that have a least one noneconomic objective related to social welfare and use the resources of
the company and/or one of its partners’ (Drumwright and Murphy, 2001, p.164). Corporate
societal marketing includes activities such as philanthropy, sponsorship, advertising with a
social dimension, licensing agreements, social alliances, volunteerism, and cause-related
marketing (CRM). Marketing strategies involving a social partner are generating increasing
interest as companies seek to differentiate their brands and respond to consumer pressure for
social responsibility. In Australia, research suggests that the majority of people do not trust
big companies and perceive them to be unethical (Grey Worldwide, 2006). Further, there is
growing evidence to suggest that consumers are willing to use their purchasing power to
reward or punish companies based on their social responsibility (Creyer, 1997; Sen and
Bhattacharya, 2001; Sen and Morwitz, 1996).
CRM is a marketing activity generally involving a corporate donation to a nonprofit
organisation contingent upon the consumer’s purchase of a nominated product (Varadarajan
and Menon, 1988). When CRM is effectively implemented, it allows greater brand
differentiation and facilitates consumer engagement at an emotional level. Corporate societal
marketing can be effective in developing positive associations for the brand and building
brand equity (Hoeffler and Keller, 2002). Participating in such an activity also positions the
firm as being community-oriented or socially responsible.
Despite the corporate and consumer interest in CRM, academic research into consumer
attitudes and responses to the strategy is at an early stage (Barone, Miyazaki and Taylor,
2000; Varadarajan and Menon, 1988; Webb and Mohr, 1998). Minimal research has been
undertaken to date that compares the effectiveness of CRM to other marketing strategies.
This is particularly important as the benefits of CRM may also be tempered by the risk of
negative publicity and perceived exploitation of the nonprofit organisation by consumers
(Varadarajan and Menon, 1988).
Purpose of the research
The purpose of this study is to contribute to the body of research in the area of CRM and to
enhance the understanding of the factors that influence consumer response. In particular, this
research explores consumer attitudes toward CRM as well as the effectiveness of CRM on
changing attitude to the brand. More importantly, this study compares consumer response to
CRM with another corporate societal marketing activity, sponsorship, as well as a more
conventional marketing activity, sales promotion. The above three activities are distinct
strategies even though CRM has often been compared to, and even referred to as a form of
sponsorship or sales promotion (e.g. Duncan, 2002; Shimp, 2003; Smith and Alcorn, 1991).
CRM provides a contribution to a cause as a result of a specified customer-firm revenue
producing exchange (Varadarajan and Menon, 1988). With sponsorship, the contribution
precedes the generation of sales revenue and is undertaken in anticipation of such an outcome.
Sales promotion is also distinct from CRM. Incentives used in sales promotions generally
relate to a tangible utilitarian benefit for the consumer. CRM, conversely, does not necessarily
offer a personal benefit to the consumer, but instead provides a benefit to a third party.
As with many marketing strategies, one of the key objectives for CRM programs is to
generate a positive attitude to the brand (Bennett, 1998; Cunningham, 1997; File and Prince,
1998; Wagner and Thompson, 1994). Brand attitude can form the basis for consumer
behaviour and is determined by the importance and relevance of the brand’s attributes and
benefits (Keller, 1993). As such, marketers need to engage in activities that will create
favourable attitudes to the brand. In addition, the success of a particular communication in
favourably influencing brand attitude can be affected by the consumer’s attitude to the
communication itself (Lafferty and Goldsmith, 1999; Miniard, Bhatla and Rose, 1990;
Mitchell and Olson, 1981). Given the consumer interest and support for societal marketing
activities, it is likely that they will have more favourable attitudes toward those strategies
(Hoeffler and Keller, 2002). Further, as CRM actively engages the consumer in terms of
giving them an active involvement in the societal marketing strategy, it is likely that CRM
will be more highly regarded than other societal marketing strategies. The following
hypotheses are proposed:
H1
Consumers will have a more positive attitude toward a CRM strategy
than they will to a sponsorship or sales promotion.
H2
The change in brand attitude experienced by consumers will be more
positive as a result of exposure to a CRM strategy than exposure to
sponsorship or sales promotion.
One of the critical success factors proposed by practitioners for the success of a CRM strategy
is the strategic fit between the cause and the brand (e.g. Adkins, 1999; DeNitto, 1989;
Higgins, 2002; Lewis, 2003). That is, the consumer should perceive an affinity between the
selected cause and the product. The importance of perceived fit, however, has been subject to
some debate. Research has also found that the most effective cause used in a CRM campaign
was one not normally associated with the organisation (Mizerski, Mizerski and Sadler, 2001).
Conversely, studies are beginning to emerge which suggest that consumers’ perceived affinity
between the cause and brand is a significant contributor to the success of a CRM strategy
(Hamlin and Wilson, 2004; Lafferty, Goldsmith and Hult, 2004; Pracejus and Olsen, 2004).
Given the inconclusive nature of the research in the area, the construct of perceived fit will be
controlled for in the analyses.
Finally, consumer perceptions of the motivations of the company or brand have been found to
impact on the response to CRM (Barone et al., 2000; Webb and Mohr, 1998). Research into
pro-social consumer influence strategies, such as environmental and cause-related campaigns,
also emphasise the pivotal role of consumer trust in the effectiveness of these strategies
(Osterhus, 1997). Therefore the consumer’s existing attitude to the brand is likely to affect
their attitude toward a brand’s marketing strategy. A similar issue has been explored in
relation to sponsorship and the findings suggest that the effect of sponsorship may be
mitigated by the company’s image prior to the sponsorship (Javalgi et al., 1994). Again,
given the potential for a consumer’s existing attitude to the brand to affect their attitude to the
strategy, this construct will also be controlled for in the analyses.
Method
This study used an experimental design as this design lends itself to establishing causal
relationships (Hoyle, Harris and Judd, 2002; Tabachnick and Fidell, 2001). A convenience
sample of 200 Australian students was used resulting in 170 completed self-administered
surveys. Analysis of cases with missing values revealed no obvious pattern so they were
deleted, leaving 135 useable cases (or 80 percent of the original 170 surveys). Subjects were
randomly assigned to either one of three treatment groups (CRM, sponsorship or sales
promotion) or a control group. A pre-test was incorporated for all groups. The pre-test
established basic demographic information and pre-existing attitude to the brand. A pre-test
allows for a more precise measure of the effect of the treatment (Christensen, 1994; Hoyle et
al., 2002). Adequate time was allowed to elapse between the pre-test and post-test exposures
to minimize the potential for bias (Christensen, 1994). Question ordering was manipulated to
ensure maximum distance between scales that were repeated in the post-test. In the post-test,
treatment groups were then exposed to the stimulus and all groups completed a second selfadministered survey. The stimulus was presented in the form of a brief description of the
CRM strategy, the sponsorship or the sales promotion at the beginning of the post-test survey.
The control group did not receive the stimulus.
The independent variable was group membership. A familiar and heavily used product
category was chosen to maximise the data. A review revealed CRM campaigns for fastmoving consumer goods are the most prevalent. This category was also one of the first to
explore and benefit from CRM strategies (DeNitto, 1989). Prior research suggests that this
strategy can be effective in a parity market (Barone et al., 2000). Therefore, the selected
product was a soft drink in common use in Australia: Schweppes Lemonade. The selected
cause was homeless youth shelters. Given the target market for Schweppes Lemonade,
varying perceptions of fit between the brand and the cause were anticipated. In addition, it
had to be reasonable to consumers that the product category would be likely to use the
strategies of CRM, sponsorship and sales promotion. A sport sponsorship (Brisbane Lions
AFL team) was selected given the sizable investment in Australia in sport sponsorship as
opposed to the Arts. A discount sales promotion was also used.
Existing scales were used to measure the dependent variables and covariate. The attitude
toward the strategy scale was constructed based on a modification of an existing scale used to
measure attitude toward a marketing offer (Burton and Lichtenstein, 1988; Lichtenstein and
Bearden, 1989). The attitude toward the brand scale developed by Batra and Ahtola, 1988
was also used. This scale measures the pleasure-related aspects of a consumer’s attitude
toward a product. Change in brand attitude was measured by taking the difference between
the pre-treatment and post-treatment measure. Perceived fit was measured by adapting the
Keller and Aaker (1992) scale developed to measure the fit of a proposed brand extension.
All scales were operationalised using a semantic differential. The data were then analysed
using analysis of variance (ANOVA) and analysis of covariance (ANCOVA) in SPSS 12.
Major findings and implications
Preliminary analyses were undertaken to confirm construct reliability and validity. The
composite reliabilities (Werts, Linn, and Jöreskog, 1974; Werts, Rock, Linn and Jöreskog,
1978) ranged between .945 for perception of fit and .966 for existing brand attitude. All
reliabilities were above the usual guidelines of 0.60 (Bagozzi and Yi, 1988) and 0.707
(Barclay, Higgins and Thompson, 1995; Chin, 1998). The Average Variance Extracted (AVE)
was also calculated and ranged between .751 for post treatment brand attitude and .852 for
perception of fit. AVE should be greater than 0.50 (Fornell and Larcker, 1981). Discriminant
validity is satisfied if the AVEs (Fornell and Larcker, 1981) for the constructs are greater than
the square of the correlations among the constructs (Chin, 1998). Convergent and
discriminant validity was demonstrated.
In terms of attitude to the strategy, the group means on a 7 point scale were as follows: CRM
5.28, sponsorship 4.61 and sales promotion 5.01. The results of an ANOVA indicate that
there is not a significant difference between the groups (F=2.93, df=2, p=.06). However,
further investigation was undertaken, using an ANCOVA, to control for pre-existing attitude
to the brand as well as the perception of fit between the brand and the cause, the brand and the
sport and the brand and the type of sales promotion. The results indicate a significant
difference between groups (F= 7.78, df=2, p<.05) and the adjusted r2 suggests that, when
controlling for the aforementioned covariates, group membership accounts for 50% of the
difference in attitude to the offer. Pairwise comparisons revealed a significant difference
between the CRM group and the sponsorship group (p=.00), as well as the CRM and sales
promotion groups (p=.00), but no significant difference between the sales promotion and
sponsorship groups (p=.39). When controlling for the covariates, hypothesis 1 is supported.
The group means for change in brand attitude indicate that only the group exposed to a CRM
strategy experienced a positive change in brand attitude as follows: control -.55, CRM .17,
sponsorship -.05, sales promotion -.13. The results of an ANOVA indicate that group
membership had a significant main effect on attitude change (F=11.36, df=3, p<.05). Further
examination using pairwise comparisons showed that there was a significant difference
between the control group and each of the three treatment groups, in terms of attitude change.
However, the comparisons did not indicate a significant difference between any of the three
treatment groups. Further investigation was undertaken using an ANCOVA to control for
perceived fit. The results indicate a significant difference between groups (F= 4.14, df=2,
p<.05) but the adjusted r2 suggests that, when controlling for the perceived fit, group
membership accounts for only 7% of the difference in change in brand attitude. Pairwise
comparisons revealed a significant difference between the CRM group and the sponsorship
group (p=.04), as well as the CRM and sales promotion groups (p=.01), but no significant
difference between the sales promotion and sponsorship groups (p=.40). When controlling
for perceived fit, hypothesis 2 is supported.
These findings contribute to a developing body of research regarding the role of perceived fit
on the effectiveness of CRM and comparing CRM to other strategies. When controlling for
perceived fit and existing brand attitude, CRM can generate a more positive attitude to the
strategy. Again, when controlling for perceived fit, CRM can generate a more favourable
change in brand attitude than the other two strategies examined. The importance of perceived
fit as well as existing brand attitude may be partially explained by attribution theory (Kelley,
1973; Kelley and Michela, 1980). That is, consumers will question why the firm is
participating in a CRM campaign. A logical association between the business and nonprofit
brands can reduce the chance of the alliance being regarded with scepticism (Webb and Mohr,
1998). If consumers perceive the firm’s motivations positively, that attribution may then
favourably affect their attitude to the brand.
The sponsorship literature also suggests that an appropriate match between sponsor and event
is a critical aspect (e.g., Crimmins and Horn, 1996; Speed and Thompson, 2000). It is
interesting to note that the current study indicates that this perception of fit is even more
important for CRM than for sponsorship. A plausible explanation may be that a logical
association between firm and social cause is more important due to the perceived
vulnerability of the nonprofit and thus the potential for it to be exploited. Furthermore, this
study indicated that a CRM strategy was more effective than sponsorship (and sales
promotion) at generating a positive attitude to the strategy as well as a more positive change
in brand attitude. Hoeffler and Keller (2002) suggest that corporate societal marketing, which
includes both CRM and sponsorship, can be effective in developing positive associations for
the brand and building brand equity, but CRM activities are particularly useful for actively
involving the customer with the brand. This study highlights the importance of choosing the
appropriate cause to partner with, as this association can ultimately impact on the ability of
this strategy to positively influence brand attitude. It is suggested that marketers undertake
research to determine consumer perceptions of an appropriate match between the organisation
or brand and potential nonprofit partner. Furthermore, marketers should consider
communicating the commonalities between the two parties instead of relying on the consumer
to make the connection. The brand extension literature also advocates the importance of an
effective communications strategy in creating links between two entities in the mind of the
consumer (Bridges et al., 2000; Keller, 1993).
In conclusion, this research is one of the first studies to measure brand attitude change, as
opposed to simply attitude. Further, these findings provide support for perceptions held by
many academics and practitioners that a strategic fit between the firm and the cause is critical
to the success of CRM and contributes to the emerging research in this area. Finally, this
study has also compared CRM with another corporate societal marketing activity,
sponsorship, as well as a conventional marketing activity, sales promotion.
There are a number of limitations associated with this study. This research focused on one
brand within one fast-moving consumer goods product category. Future research should
include other categories. Additional research should further examine the impact of fit by
choosing products and causes with differing perceptions of fit.
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