Sustainability for fulfilling their obligations towards society being

Sustainability and Socially
responsible business: Consumer’s response to Cause-related Marketing campaigns for
a sustainable future

 

*Vivek Aggarwal, Research Scholar, Faculty of
Management Studies, Gurukula Kangri Vishwavidyalaya, Haridwar. Email id: [email protected]

**Prof. (Dr.) Vinod Kumar Singh, Professor and former
Head and Dean, Faculty of Management Studies, Gurukula Kangri Vishwavidyalaya, Haridwar.

                                                                                                                           

Abstract

 

Many researchers have studied the concept of sustainable
development and socially responsible businesses. But the main reason for
companies engaged in social responsibility practices is as a driver of value
added in monetary terms. In this context, Cause-related Marketing (CrM) has
become one of the most important strategic tools for fulfilling their
obligations towards society being a part of corporate social responsibility and
also to get consumer attention in return by differentiating themselves and
their products in the competitive markets. But it is very difficult for consumers
to judge the fairness of a CrM campaign supporting a social cause. The purpose
of this research was to investigate the understanding about CrM campaigns
carried out for promotion to reveal the emotional sides of Indian consumers and
its effect on consumer’s support to a social cause and in turn on consumer’s
purchase intention. On the basis of review of literature the researchers have drawn
the following hypothesis that there is a significant association between CrM and
consumer’s purchase intention. A survey was carried out through a self
administered questionnaire in the urban areas of Ghaziabad and Noida among 200 males
and females students technically known as millennials (generation Y). Further
data analysis was carried out using suitable statistical technique like hierarchical
regression analysis and it has been found that effect of cause-related
marketing campaigns on purchase intention of consumers is significantly
moderated by consumer cause involvement. These results can be helpful for companies to formulate strategic
approaches to promote their products for a sustainable future through consumer
participation.

 

Keywords: Cause-related marketing, Corporate social responsibility, Purchase intention, Sustainability.  

 

Introduction

Cause-related marketing (CrM) is integration of social responsibility
dimension of business and for-profit corporate strategy. Its main feature is
that there is link between donation, product sale and consumer action (Galan–Ladero et al.
2013).  CrM can influence
various business functions and can be helpful in creating a sustainable and
socially responsible business. Although, relationship between social
responsibility and profit cannot be well established, but with growing interest of companies towards social responsibility
practices like CrM the monetary benefit can be a stimulus for it. However,
social responsibility has become a necessity for businesses, because of
importance attached to social responsibility efforts by key stakeholders.

There are many examples of cause-related marketing activities and
programs in India.  Like through its education and
environment sustainability program “Shiksha” P&G commits a donation for every purchase since year 2005. Many of the social
responsibility programs conducted by companies like Marico (Ek Kadam Pragiti ki
Aur), HUL (Swachh Aadat, Swachh
Bharat), Colgate Palmolive (Education Scholarship) changed the fate of many by
their active involvement in socially beneficial activities and understanding
their corporate social responsibilities well (Kureshi & Thomas 2014).

Cause involvement identifies the personal
importance of a social cause for an individual. It is degree to which consumers
feels a cause to be personally significant. In fact it can be act as a measure
to evaluate whether the CrM campaign
is a profit oriented or altruistic act and which can significantly affects its
influence on consumer attitudes and behaviours towards the brand and can affect
consumer’s purchase intention (Hajjat 2003; Patel
et al. 2016; Grau & Folse 2008).

There is strong link between educated youth and sustainable economic
development (Foundation 2017), that’s why this study focuses on CrM campaigns
supporting the social cause education. In this regard, the main objective of
this paper was to investigate the understanding about CrM campaigns by Indian
consumers and its effect on consumer’s involvement with a social cause and in
turn on consumer’s purchase intention. Present study focuses on young consumers
of age group 20 years -35 years belonging to Y generation also referred as
millennials (Cone Communications 2015).

Conceptual
Foundation

Corporate social responsibility (CSR) as a form of corporate
philanthropy has been in practice since as early as the late 1800s (Adkins 1999) . In today’s competitive era
companies must adopt new strategies to gain sustainable competitive advantage both
at local and international level, and become more accountable for business
expenditures, CrM can be one of such strategy which can be helpful in achieving
this.

Since first commercial
CrM campaign by American express in 1983 there is growing interest about CrM
both by companies and among the researchers in various countries (Adkins et al. 2010; Patel et al. 2016; Sung & Lee
2016; Wymer & Sargeant 2006; Hou et al. 2008; Lafferty & Goldsmith
2005) and can refer as “a method of
formulating, implementing and promoting activities that involves a promise from
a organization to support financially a chosen cause once consumers have
interaction in revenue-providing exchanges that satisfy structure and
individual objectives.” (Varadarajan & Menon 1988)

Cause involvement has
both direct and indirect effect on purchase intention (Grau & Folse 2008; Patel et al. 2016; Hajjat
2003; Webb & Mohr 1998). If the
consumers cause involvement is high, it increases effect of CrM on attitude-purchase
intention link as it helps them to easily recognize even the unfamiliar sponsor
brand. Consumers having high cause involvement give more importance to social
cause supporting campaigns and tend to make large donations to social cause (Hajjat 2003). According to
Grau & Folse (2007) consumer choose to donate frequently to the social
causes related with their personal lives and they consider this association as
an important reason to donate. But support of consumers for the CrM campaign
having low cause involvement may be due to familiar partnering brand (Grau & Folse 2008; Bigne-Alcaniz et al. 2010).

Response of consumer
towards a product in form of recommendation to others, enquiry about the
product or to purchase may be termed as purchase intention. Purchase intention indicates
the possibility that a purchaser will purchase a specific item; the higher the
purchase intention, the more prominent the buy likelihood (Patel et al. 2016; Aggarwal & Singh 2016).

The consumers that were highly associated with social
causes are likely to have higher positive attitudes towards the brand and there
is a stronger purchase intention among generation Y towards the product
associated with a social cause (Cone Communications 2015).

It’s been observed that the successful CrM campaigns
led to drastic increase in sales. Consumers show raised purchase intentions for
the product identified with the cause–brand partnership after they feel that
the cause has importance to their lives.

On the basis of review of literature the researchers
have drawn the following hypotheses –

Hypotheses 1:                    There is a significant association between online
CrM campaign and purchase intention.

Hypotheses 2:                    CrM
has a stronger positive influence on purchase intention when consumers have
higher cause involvement.

Measures

Based on the literature review a research framework is developed which
studies CrM as an independent variable and its effect on cause
involvement was
investigated. Also effect of cause involvement on purchase intentions of consumer was studied.

 

H1

Consumer’s Purchase Intention
 

Cause-related
Marketing Campaigns
 

Cause Involvement
 

H2

Figure
1: Research Framework

For this study the
respondents were make familiar with CrM at the beginning of the survey by
providing them with the definition of CrM.  The campaign selected for the present study
was by Procter and Gamble Co. (P) as it is one of the oldest and
continuous campaigns (running since 2005) by an FMCG company and supports the
education of children a way for economic sustainability.

In this company promises to
donate a certain amount towards the education project “Shiksha” as when
consumer purchase any one of the company product (like Arial, Pampers, Whisper,
and Pantene) associated with the campaign (La Ferle et al. 2013) .

Cluster sampling was used to
take sample from the population comprises of young consumers of Ghaziabad and
Noida which are the part of conglomerate national capital region (NCR) of India,
from this population using cluster sampling a sample of 250 was taken. Total 250
questionnaires were distributed to male and female students of universities and
colleges of age group 20 -35 (generation Y or millennial generation).  Out of 250, 197 questionnaires were found to be useful for study
giving response rate of 79%.  A
structured questionnaire is used for data collection. Items related to CrM campaigns are adopted from various studies (Sin?i? ?ori? & Dropulji? 2015; Ross
et al. 1992)
also for measuring consumers’ purchase intention scale was adopted from
previous researches (Hou et al. 2008; Duffett 2015). The responses were recorded on a 5 point Likert scale with answers
ranging from “1=strongly disagree” to “5=strongly agree”.  The validity and reliability of scale was measured
through Cronbach’s Alpha and KMO and Bartlett’s test of sphericity which was
0.890 and 0.865 respectively, all these values can be considered highly
reliable (Field, 2009).

Results and discussion

Demographics of the Respondents: In the sample of 196 respondents comprises of students, there were

Table
1: Demographic Profile of Respondents

Demographic Variables

n

%

Gender

Male

110

55.8

Female

87

44.2

Age Group ( in years)

20 to 25

  104

52.9

25 to 30

  70

   
35.3

30 to 35

  23

   
11.8

Educational Qualification

Graduate

  75

38

Post
Graduate

   65

33

Doctorate

   33

   
16.8

Under
Graduate

   12

  6.1

B. Ed.

   12    

  6.1

 

Correlation Analysis: Correlation analysis of results (Table 2) shows that CrM and purchase
intention are positively correlated to each other. Level of significance of
this relation is .000 which showed that the relation was highly significant
p< .01 and value of Pearson correlation between CrM and purchase intention is r = .691. This value is not very close to +1 but is very positive. Its showing that with the increase in CrM, level of purchase intention will also increase. The relationship between CrM and cause involvement was significant as p <.01, value of Pearson correlation r=.708 which was positive and close to +1. Similarly, relationship between cause involvement and purchase intention was r=.751 which was also positive and significant as p=.000 which is <.01. Thus, with increase in CrM the cause involvement increases and with increase in cause involvement purchase intention will increase.   Table 2: Correlation of CrM, Purchase Intention and  Cause Involvement   CI CrM PI CI Pearson Correlation 1 .708** .751** Sig. (2-tailed)   .000 .000 N 197 197 197 CrM Pearson Correlation .708** 1 .691** Sig. (2-tailed) .000   .000 N 197 197 197 PI Pearson Correlation .751** .691** 1 Sig. (2-tailed) .000 .000   N 197 197 197 **. Correlation is significant at the 0.01 level (2-tailed). Moderation Effect To test the hypothesis that the purchase intention are a function of multiple factors, and more specifically whether cause involvement moderates the relationship between CrM campaign and purchase intention, a hierarchical multiple regression analysis was conducted. In the first step, two variables were included: CrM campaign and cause involvement. These variables accounted for a significant amount of variance in consumer's purchase intention, R2 = .615, F (2, 194) = 154., p < .001.  Results showed the variables had positive impact on the purchase intention towards cause-related products.  Therefore H1 is accepted. To avoid potentially problematic high multicollinearity with the interaction term, the variables were centered and an interaction term between CrM campaign and cause involvement was created (Aiken & West, 1991). Next, the interaction term between CrM campaign and cause involvement was added to the regression model, which accounted for a significant proportion of the variance in consumer's purchase intention, ?R2 = .01, ?F(1, 193) =5.209, b = .0175, 95% CI -.0337 -.0014, t(193) =2.14, p =  .0335. Figure 2: Interaction plot Examination of the interaction plot showed an enhancing effect that as CrM campaign and cause involvement increased, consumer's purchase intention increased. At low CrM effect, consumer's purchase intentions were similar for consumers with low, average, or high involvement. Consumers with high cause involvement had the highest purchase intention. Thus moderating influence of cause involvement on the relationship of the CrM campaign and purchase towards cause-related products was confirmed. Therefore, H2 is accepted. Limitations and managerial Implications Despite the interesting findings present study has certain limitations. First, this research has study responses of students belonging to generation Y only and due to the limited sample size research findings may not be generalized. Future studies needed to examine the role of demographic factors such as income level and education and other independent variables like cause brand fit, skepticism , brand loyalty on purchase intention of consumer. The findings of this study can be directly or indirectly used by companies to CrM campaigns can be helpful in enhancing the cause involvement of a consumer and increase purchase intention of consumer.   Conclusion Society today needs businesses to support good causes. As the popularity of CrM increases, it is important for marketers to understand why the response of consumers about CrM campaigns differs. Involvement of consumers with type of cause supported by the campaign can be a reason. The current study shows that cause involvement have a positive relation with purchase decision of consumers and CrM campaigns can be helpful in enhancing cause involvement. Thus companies must extend support to causes having high consumer involvement education may be such a cause. There are many opportunities with companies to enhance their financial support to education in India. Further research may be done to found the effects CrM has on the long-term sustainability of the nonprofit organizations. References