A Taxonomy of Cause-Related Marketing Research: Current Findings and Future Research Directions

Transcription

1 A Taxonomy of Cause-Related Marketing Research: Current Findings and Future Research Directions Shruti Gupta Julie Pirsch ABSTRACT. Cause-related marketing is an increasingly popular method of improving marketing relationships with customers, both for the sponsoring company and for the participating cause. This paper outlines the rewards and risks for the company and the cause as they consider this type of partnership, as well as the benefits and drawbacks for the customers asked to participate in these programs through the purchase of the sponsored product or service. Future directions for research are recommended in order to (1) expand the findings within this domain, and (2) to maximize sales results from cause-related marketing initiatives for businesses and causes. [Article copies available for a fee from The Haworth Document Delivery Service: HAWORTH. address: <docdelivery@haworthpress.com> Website: < by The Haworth Press, Inc. All rights reserved.] KEYWORDS. Cause-related marketing, taxonomy Shruti Gupta, PhD, is Assistant Professor of Marketing, The Pennsylvania State University Abington, 1600 Woodland Road, Abington, PA ( sxg37@ psu.edu). Julie Pirsch, PhD, is Assistant Professor of Marketing, Villanova University. Address correspondence to: Julie Pirsch, Marketing Department, Villanova University, 3006 Bartley Hall, Villanova, PA ( Julie.Pirsch@villanova.edu). The authors are listed in alphabetical order and contributed equally to the paper. Journal of Nonprofit & Public Sector Marketing, Vol. 15(1/2) 2006 Available online at by The Haworth Press, Inc. All rights reserved. doi: /j054v15n01_02 25

2 26 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING INTRODUCTION In 1999, Sears partnered with Gilda s Club, a non-profit network of local meeting places for people living with cancer (Discount Store News, 1999). By donating a portion of the sales from selected merchandise, and by creating strategic alliances with Die Hard Racing Team and Levi s, Sears helped Gilda s Club families find resources to deal with the devastating effects of cancer by raising over three million dollars. In addition to the financial support generated for this cause, Sears increased the sales revenue of those products tied to the cause, and brought national recognition to this otherwise unknown charity. Sears continued this charitable partnership during the 1999 holiday season by supporting the Give Gilda s Club a Charge holiday campaign, donating sales proceeds from every purchase made with a Sears Card (Ebenkamp 1999). This partnership between Gilda s Club and these national brands is and excellent example of cause-related marketing: a program designed to create a partnership between a sponsoring firm and a non-profit cause that raises money through product sales. Consider these other examples of cause-related marketing: Visa instigated a charitable partnership with Reading is Fundamental (RIF), a non-profit organization (NPO) focused on promoting children s literacy. Every time the card was used with partner merchants, Visa donated a percentage of an item s purchase price to RIF. This cause association generated in excess of $1million for RIF, increased national awareness of the importance of youth literacy, enhanced Visa s brand image, and increased Visa s transaction volume by 18.9% in the first year of the campaign ( Darden Restaurant s Olive Garden chain raised $15 million over the last 13 years for leukemia and lymphoma research, education and treatment with their annual Pasta for Pennies program (www. olivegarden.com/ourcommunity/pennies.asp). Through this program, more than one million students in schools around the country bring spare change to their classrooms each year to benefit the local chapters of The Leukemia & Lymphoma Society. The class in each school that raises the most money receives a pasta party from Olive Garden. In 1999, J.C. Penney offered A Very Rudolph Christmas CD, donating two dollars of each cash purchase to its Can Do After- School program designed to support high quality, affordable after

3 Shruti Gupta and Julie Pirsch 27 school programs for children nationwide, reaching their one million dollar goal. As is evident from the above industry examples, cause-related marketing has become a popular strategic marketing tool for companies. This surge in corporate enthusiasm can be traced back to American Express support of the Statue of Liberty restoration in Cause-related marketing is a critical part of the strategic marketing plan for companies interested in satisfying the needs and wants of their publics. While marketing in general is widely perceived as the process of selling, influencing and persuading the end user to purchase a product, it also must serve and satisfy the human needs of its customers (Kolter and Levy 1969) and all of its other internal and external publics (Kolter 1972). In order to reach these publics and differentiate one firm from other firms, marketers can use cause-related marketing to support the altruistic needs of its internal and external customers by tying its economic activity to a higher social purpose (Kolter and Levy 1969, p. 15). Today, many large organizations have cause-related marketing programs that support a multitude of causes. Companies use these cause-related marketing as a strategic and tactical tool to help realize a plethora of corporate objectives such as increasing sales and market share and improving company and product performance (Ross, Stutts, and Patterson ). In the literature, cause-related marketing emerges as a distinct domain with a seminal paper by Varadarajan and Menon (1988). With almost 20 years since the inception of formal cause-related marketing initiatives in practice, this paper seeks to review the literature in this domain, and offers a taxonomy that structures research efforts and helps identify future research directions. Past research on cause-related marketing has followed three major directions, each of which will be discussed below. One direction has contributed to the conceptual development of the construct, the second seeks to understand the nature of customer responses to cause-related marketing initiatives, while the third highlights the rewards and risks for the alliance partners. CONCEPTUAL DEVELOPMENT In their seminal paper on cause-related marketing, Varadarajan and Menon (1988, p. 60) offer the most comprehensive conceptualization of cause-related marketing. These authors define cause-related marketing as:

4 28 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING... the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives. Cause-related marketing has also been referred to as joint venture marketing (File and Prince 1998) that links organizational identity to nonprofits with a social cause (Varadarajan and Menon 1988), and as a... complex utilitarian economic exchange between the customer, the firm and the cause (Ross, Patterson, and Stutts 1992). Still others describe cause-related marketing as marketing alliance using transaction-based promotions, joint issue promotions and licensing to reach its goals (Andreasan 1986). While most researchers define cause-related marketing in terms of corporate commitment to a social cause in lieu of customers purchases (Varadarajan and Menon 1988), others argue that it is simply another form of corporate philanthropy, with the underlying objective of increased sales (DiNitto 1989). In marketing terms, cause-related marketing is best described as a strategy designed to promote the achievement of marketing objectives (such as brand sales) via company support of social causes (Barone, Miyazaki, and Taylor 2000). Companies can choose to operationalize their cause-related marketing programs through one of two ways. First, companies may choose to establish a direct relationship between sales of company products and its support of a social cause. For example, Target retail stores may choose to donate 1% of each consumer transaction to selected neighborhood community groups. Alternatively, companies may choose a less visible and indirect path when making an overall effort to behave in socially responsible ways (Mohr, Webb and Harris 2001). Examples of this option can be seen in donations of money, materials, and supplies to causes, sponsoring public service announcements in the media (see Ebenkamp 1999) or through employee volunteering (Meyer 1999). Wal-Mart recently opted for this strategy in lieu of a purchase-sponsored program by donating $100 million in 1997 to support children and families (Meyer 1999). In the end, however, the company s goal in participating in a cause-related marketing campaign is not only to provide financial support to a worthy cause, but also to establish or reinforce an altruistic public persona with respect to the firm, its brand, or both, in the eyes of its most important audience: the customer.

5 Shruti Gupta and Julie Pirsch 29 CUSTOMER RESPONSES TO CAUSE-RELATED MARKETING PROGRAMS Existing research efforts have described how a cause-related marketing campaign influences customer attitudes and purchase intent. In a nationwide survey completed by Cone Communications and Roper Starch Worldwide, consumers reported that when given a buy choice between two products of equivalent price and quality, 78% would more likely buy a product and 54% would pay more for a product associated with a cause they care about. Sixty-six percent of those surveyed said they would switch brands to support a cause and 84% said that cause-related marketing helps create a positive company image (Carringer 1994). Since the 2001 tragedy of September 11, consumer willingness to participate in cause-related marketing initiatives has significantly increased ( The 2002 Cone Corporate Citizenship Study found that 89% of Americans believe that it is more important than ever for companies to be socially responsible ( Additionally, the recent increase in corporate scandal related to financial fraud (e.g., Arthur Anderson and Worldcom) has increased the public s willingness to punish those corporations that consumers perceive to be working against the best interests of their customers. Specifically, surveyed consumers offered the following responses to situations of corporate irresponsibility: 91% would consider switching to another company s products or services; 85% would speak out against the company to family and friends; 83% would refuse to invest in the company s stock; 80% would refuse to work for that company. Finally, when asked whether a company s commitment to social issues was important when deciding which companies consumers want to see doing business in their community, responses increased from 58% in March, 2001 to 84% in July, Clearly, consumers now more than ever value a company s willingness to support relevant causes, rewarding those companies that follow this path, and punishing those that do not. As a strategic marketing tool, cause-related marketing has been found to be more effective among customers purchasing luxury items than practical ones (Ross, Patterson, and Stutts 1992; Strahilevitz and Myers 1998). In this case, cause-related marketing may offset the feeling of guilt associated with the purchase and consumption of luxury products

6 30 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING (Strahilevitz and Myers 1998). Other evidence shows that customers prefer local causes to national causes, and that women are more favorable towards cause-related marketing than men (Ross, Patterson, and Stutts 1992). In a situation when price and quality attributes are similar across two competing brands, customers are likely to lean positively towards the manufacturer supporting a social cause (Carringer 1994; Staff 1997). Although research generally shows an overwhelming level of customer support for cause-related marketing programs, some variations in customer perceptions of cause-related marketing remain. This variation is often explained by probing customer perceptions of a company s motivation behind its cause-related marketing initiative (Drumwright 1996; Barone, Miyazaki, and Taylor 2000). The focal question for customers evaluating cause-related marketing initiatives is whether or not they perceive cause-related marketing programs as cause-beneficial or cause exploitative (Andreasan 1986; Varadarajan and Menon 1988; Ross, Stutts, and Patterson ). Specifically, is the goal of the cause-related marketing initiative to increase sales revenue and market share? Or does the company s motivation arise from a genuine support of the social cause at hand? These two questions can have a critical impact on the success of the cause-related marketing initiative by calling into question not only the initiative itself, but also the credibility of the sponsoring brand. Understanding the answers to these questions is critical to both the sponsoring firm and the associated cause before launch of the cause-related marketing initiative. Other variations in customer responses to cause-related marketing initiatives may come from the extent to which customers must make tradeoffs between competing products based on differences in price and/or performance when faced with a cause-related marketing product choice (Barone, Miyazaki, and Taylor 2000, p. 258). The degree to which competing products differ can affect the consumer s willingness to take a cause-related marketing initiative into consideration. When no inter-brand differences exist, any cause-related marketing activity positively influences customer choice. However, when inter-brand differences exist and require tradeoffs by the customer, the tendency of the customer to select a particular brand will depend on the size of the cause-related marketing advantage provided by that firm (Barone, Miyazaki, and Taylor 2000). In the end, it is important to recognize that the overwhelming research focus in the domain of cause-related marketing has been on consumer responses to these programs when measuring the program s

7 effectiveness. This research drive has been partly motivated by the underlying assumption that cause-related marketing is targeted only towards one of the organization s stakeholders the consumers. This assumption has somewhat erroneously led to the perception of cause-related marketing programs as primarily transaction-based. However, other researchers argue that companies should instead measure performance of cause-related marketing programs not only by measuring customer purchase levels, but also by tracking changes in company image and customer and employee satisfaction and loyalty (Andreasan 1986). This debate between these two viewpoints is ongoing, and represents a rich opportunity for future research within this domain. Specifically, what motivation really underlies cause-related marketing initiatives? Are they simply designed to increase sales, or does generating a more positive brand image through politically correct sponsorship of a needy population or organization equal (or even outweigh) potential profits? Investigating these questions would provide valuable insight for marketing practitioners generating these programs, and supply critical guidelines for understanding what rewards and risks companies should expect from entering into these types marketing programs. REWARDS FOR PARTICIPATING IN CAUSE-RELATED MARKETING INITIATIVES The three key stakeholders in a cause-related marketing program are the sponsoring company, the cause receiving the support and the customers who must decide whether or not to purchase a cause-related marketing associated product. Following is a summary of the rewards accrued by each participant. Company Rewards Shruti Gupta and Julie Pirsch 31 The sponsoring firm can realize the rewards of participating in a cause-related marketing initiative at both the product level and at the organizational level. Product related rewards to the company include increasing the product s ability to break through the advertising clutter in the marketplace (Shell 1989; Oldenberg 1992), generating low cost exposure for the product (Pasley 1990; Zbar 1993), and increasing the product s ability to win customer support (Henricks 1991; Brown and Dacin 1997). Additionally, the positive perception associated with a particular sponsored product can spill over to other, related products offered in the

8 32 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING same line or under the same brand name, resulting in a halo effect for the company s products. This halo effect can produce an increase in the customer s willingness to purchase company s other products (Barone, Miyazaki, and Taylor 2000), to pay premium prices (Meyer 1999), and to switch brands (Larson 1994; Meyer 1999). Organizational rewards from participating in cause-related marketing initiatives include generating favorable customer attitudes towards the sponsoring firm (Ross, Stutts, and Patterson ; Ross, Patterson, and Stutts 1992; Brown and Dacin 1997), increasing favorable purchase intentions towards company brands (Andreasan 1986; Ross, Patterson, and Stutts 1992; Webb and Mohr 1998; Meyer 1999; Barone, Miyazaki, and Taylor 2000), creating a higher level of visibility for the organization (Andreasan 1986), generating a differentiated image due to the association with social causes (Andreasan 1986; Shell 1989; Barich and Kotler 1991; Meyer 1999; Bronn and Vrioni 2001), enhancing corporate image (Schiller 1988; Fombrun and Shanley 1990; Larson 1994; Meyer 1999; Bronn and Vrioni 2001), allowing the company to communicate its core values to the society (Shell 1989; Mohr, Webb, and Harris 2001), giving the company a competitive edge (Bronn and Vrioni 2001) and reducing employee turnover (Meyer 1999). Finally, a cause-related alliance gives the corporation access to the non-profit s clientele, staff, trustees and donors, all of whom could be potential customers (Andreasan 1986). Of all the rewards for a company that engages in a cause-related marketing program, however, the key benefit of a cause-related marketing initiative to the organization continues to be the generation of favorable purchase intent or product choice among the organization s customers (Shell 1989; Lawrence 1993; Mohr, Webb, and Harris 2001) (see Table 1). This can result in increased sales and profits for the company, and the increased recognition of its brand name(s) and product offering within its consumer base. Cause Rewards Causes accrue rewards such as new sources of much needed funds and heightened public awareness (Caesar 1986; Varadarajan and Menon 1988) (see Table 2). These benefits are available with little or no out-ofpocket costs to the cause (Gayle 1999). Revenue earned from such sources proves to be valuable to the cause because it can be used for operating expenses and routine capital expenditures that individual donors

9 Shruti Gupta and Julie Pirsch 33 TABLE 1. Sponsoring Company Rewards Product Rewards Increased ability to break through advertising clutter (Shell 1989; Oldenberg 1992) Generating low cost product exposure (Pasley 1990; Zbar 1993) Increasing overall customer support (Henricks 1991; Brown and Dacin 1997) Increasing customers purchase of company s other products (Barone, Miyazaki, and Taylor 2000) Increasing customers willingness to pay premium prices (Meyer 1999) Increasing customers willingness to switch brands (Larson 1994; Meyer 1999) Organizational Rewards Generation of favorable purchase intent or product choice among the organization s customers (Shell 1989) Generating favorable customer attitudes towards sponsoring firm (Ross, Stutts, and Patterson ; Ross, Patterson, and Stutts 1992; Brown and Dacin 1997) Increasing favorable purchase intentions towards company brands (Andreasan 1986; Ross, Patterson, and Stutts 1992; Webb and Mohr 1998; Meyer 1999; Barone, Miyazaki, and Taylor 2000) Creating higher level of visibility for the organization (Andreasan 1986) Generating a differentiated image due to the association with social causes (Andreasan 1986; Shell 1989; Barich and Kotler 1991; Meyer 1999; Bronn and Vrioni 2001) Enhancing corporate image (Schiller 1988; Fombrun and Shanley 1990; Larson 1994; Meyer 1999; Bronn and Vrioni 2001) Communicating core company values to the society (Shell 1989) Giving the company a competitive edge (Bronn and Vrioni 2001) Reducing employee turnover (Meyer 1999) Gaining access to the non-profit s clientele, staff, trustees and donors, all of whom could be potential customers (Andreasan 1986) are less likely to fund (Lowell, Silverman, and Taliento 2001). Additionally, other research suggests that people perceive cause-related marketing to be an effective way to financially assist social non-profit organizations (Ross, Stutts, and Patterson ; Ross, Patterson, and Stutts 1992).

10 34 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING TABLE 2. Sponsoring Cause Rewards Gain new sources of much needed funds and heightened public awareness (Caesar 1986; Varadarajan and Menon 1988) Little or no out-of-pocket costs to the cause (Gayle 1999) Revenue earned can be used for operating expenses and routine capital expenditures that individual donors are less likely to fund (Lowell, Silverman, and Taliento 2001) Positive perception that cause-related marketing is an effective way to financially assist social non-profit organizations (Ross, Stutts, and Patterson ; Ross, Patterson, and Stutts 1992) Customer Rewards Although the company and the cause realize the bulk of the rewards of a cause-related marketing program, customers are rewarded by a sense of additional perceived value to their purchase (Webb and Mohr 1998). Additionally, customers gain the ability to differentiate between competing manufacturers (Barone, Miyazaki, and Taylor 2000), and can satisfy their altruistic needs of the self by helping society (Polonsky and Wood 2001) (see Table 3). According to Strahilevitz and Myers (1998), customers most often seek to realize this added value in the purchase of frivolous goods, where they can rationalize their purchases and reduce any cognitive dissonance associated with the exchange. RISKS OF PARTICIPATING IN CAUSE-RELATED MARKETING PROGRAMS Several risks are also associated with a cause-related marketing strategy. These shortcomings can also be classified by stakeholder: those experienced by the company, the cause and the customer. Company Risks Despite altruistic intentions, investment in cause-related marketing programs poses a financial risk for the company (Shell 1989) (see Table 4). This is primarily because cause-related marketing is not philanthropy, and the funding for the program is usually apportioned from the marketing budget (Ross, Stutts, and Patterson ). Other pitfalls for firms associating with social causes include wasted monetary

11 Shruti Gupta and Julie Pirsch 35 TABLE 3. Customer Rewards Gain new sources of much needed funds and heightened public awareness (Caesar 1986; Varadarajan and Menon 1988) Little or no out-of-pocket costs to the cause (Gayle 1999) Revenue earned can be used for operating expenses and routine capital expenditures that individual donors are less likely to fund (Lowell, Silverman, and Taliento 2001) Positive perception that cause-related marketing is an effective way to financially assist social non-profit organizations (Ross, Stutts, and Patterson ; Ross, Patterson, and Stutts 1992) funds caused by linking up with a charity that offers little or no synergism, a difficulty in measuring the social contributions of the cause-related marketing initiative, and the risk of customer cynicism (Meyer 1999). Finally, as pointed out by Drumwright (1996, p. 71) one of the more critical risks of these types of non-economic marketing activities is the risk that customers perceive it as marketing s most unabashed exploitation (see also Smith and Stodghill 1994). Cause Risks The biggest cause-related marketing participation risk for the cause is that involvement with a corporate sponsor can bring the taint of commercialism to the cause s image (Garrison 1990) (see Table 5). Another risk for cause is that cause-related marketing funds may be viewed by customers and companies as a substitute for regular individual and corporate philanthropic contributions, rather than as a supplement to their contributions (Andreasan 1986; Caesar 1986). Other risks for cause include the risk of wasted resources (if the alliance fails to meet its objective), the loss of organizational flexibility to enter into other similar alliances with the sponsoring firms competitors, the use of antithetical marketing practices by the corporate partner, increased dependency on corporate funds, and the risk of overwhelming the cause s ability to administrate incoming contributions (Andreasan 1986). Customer Risks In a summary article, Polonsky and Wood (2001) identify several sources of concern that cause-related marketing programs pose to cus-

12 36 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING TABLE 4. Sponsoring Company Risks Increased financial risk for the company (Shell 1989) Decreased marketing budget for other marketing activities (Ross, Stutts, and Patterson ) Wasted monetary funds caused by linking up with a charity that offers little or no synergism (Meyer 1999) Difficulty in measuring the social contributions of the cause-related marketing initiative (Meyer 1999) Risk of customer cynicism (Meyer 1999) Risk that customers perceive program as exploitation of the cause (Smith and Stodghill 1994) TABLE 5. Sponsoring Cause Risks Taint of commercialism to the cause's image (Garrison 1990) Funds may be viewed by customers and companies as a substitute for regular individual and corporate philanthropic contributions, rather than as a supplement to their contributions (Andreasan 1986; Caesar 1986) Risk of wasted resources if the alliance fails to meet its objective (Andreasan 1986) The loss of organizational flexibility to enter into other similar alliances with the sponsoring firms' competitors (Andreasan 1986) The use of antithetical marketing practices by the corporate partner (Andreasan 1986) Increased dependency on corporate funds (Andreasan 1986) Risk of overwhelming the cause's ability to administrate incoming contributions (Andreasan 1986) Individual donors perceive the cause no longer needs assistance, creating to a shortfall in cause funding and hindering the ability of the cause to assist its constituencies (Polonsky and Wood 2001) tomers and to society. Customers run the risk of being misled by sponsoring firms that exaggerate cause-related marketing related generosity (see Table 6). This might lead the individual donor to perceive that the cause no longer needs assistance, creating a shortfall in NPO funding, which in turn becomes a detriment to the customer by forcing the NPO to reduce client services. The company-cause alliance may also lead

13 Shruti Gupta and Julie Pirsch 37 customers to mistakenly perceive that the cause has participated in the development of the sponsoring firm s products and/or practices. For example, in 1994 Johnson & Johnson s McNeil Consumer Products Company introduced a line of value priced painkillers branded under the Arthritis Foundation name in exchange for a donation of over $1 million a year for arthritis research (Sebastian 1994; Weisz 1994). McNeil discontinued marketing the product in 1996 and agreed to pay 19 states $2 million to settle allegations that it and the Arthritis Foundation led consumers to believe that the cause was involved in developing the drugs and that the drugs had been specially formulated with Arthritis Foundation research (Staff 1996a; Staff 1996b). Finally, in an attempt to forge more lucrative relationships with sponsoring firms or to expand their customer base, causes may choose to shift their focus to include a new topic or group, in extreme situations at the expense of the original program. For example, a cause focused on breast cancer may choose to expand its potential constituency by also focusing on lung cancer, or by abandoning breast cancer altogether to focus exclusively on lung cancer. While in the short term this might benefit the cause by generating a larger potential audience, in the long term the consumer may be misled as the cause s activities may be inconsistent with the consumer s perceptions at the time of their initial support (Polonsky and Wood 2001). FUTURE RESEARCH DIRECTIONS The above literature review presents the key research findings in peer-reviewed journals in the domain of cause-related marketing. The material included in the review was classified into one of the following areas: 1. Conceptual definition of cause-related marketing. 2. Customer responses to cause-related marketing programs. 3. Outcomes of cause-related marketing-rewards and risks for the participants. A number of general observations regarding the literature reviewed in this paper are useful for defining the frontiers of knowledge in the area of cause-related marketing, as well as any gaps in the literature that may be targeted for future study. The first important future consideration in the domain of cause-related marketing lies in the treatment and execution of the cause-related marketing programs themselves. While

14 38 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING TABLE 6. Consumer Risks Risk of being misled by sponsoring firms that exaggerate cause-related marketing related generosity (Polonsky and Wood 2001) Customers may mistakenly perceive cause has participated in the development of the sponsoring firm s products and/or practices (Polonsky and Wood 2001) Adoption of new or supplementary causes by the non-profit organization may be inconsistent with the consumer s perceptions of the cause from the time of their initial support (Polonsky and Wood 2001) the tactical issues listed above have been classified to enhance the readability of the sections, in practice many decisions relating to what are here regarded as separate issues are in fact interdependent. In other words, the conceptualizations of cause-related marketing programs are interrelated to the type and intensity of customer response that in turn influences its success or failure. Therefore, for cause-related marketing partners, the operationalization, customer action and outcome of causerelated marketing programs should be discussed as an integrated concept and not as three separate issues. Researchers, too, should embrace this approach when designing research programs and discussing theory in this domain. In order to effectively apply academic research into the business world, recognition of the interdependence of the elements of a cause-related marketing program is critical. Second, while some authors have defined cause-related marketing in their works, the majority of writers have been content with the definition offered by Varadarajan and Menon (1988). While this definition has proved a solid foundation for research, a more updated definition may be necessary at this point. Specifically, a revised definition should stretch the scope of the measure of cause-related marketing success to include responses from all stakeholder groups, including customers, employees, suppliers and investors. For example, recall Vardarajan and Menon s (1988, p. 60) definition of cause-related marketing as... the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives. A revised definition might read as follows:

15 Shruti Gupta and Julie Pirsch 39 Cause-related marketing is the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges to induce favorable responses from all company stakeholders (e.g., investors, suppliers, employees and customers) which in turn satisfy organizational and individual objectives. This modified definition relates closely to the debate about the goals of cause-related marketing for participating companies, and how success is measured for these programs. While literature in this domain has generally measured success as the customer s intent to purchase a sponsored product, other considerations should be made when assessing the results of a cause-related marketing initiatives. Andresean (1996) initiated this suggestion, arguing that cause-related marketing programs should measure performance by tracking changes in variables like company image and customer and employee satisfaction and loyalty. Equally important in assessing the success of cause-related marketing initiatives is the motivation behind the participation of the sponsoring company; perception of this motivation can not only affect the willingness of the customer to purchase the sponsored product, but also how other internal stakeholders (e.g., employees, investors) feel about their company s true motives behind the program. If stakeholders perceive that their (sponsoring) company is launching a cause-related initiative only to increase sales, improve brand image, or appear more politically correct, the net result to the company could far outweigh any positives gained from cause sponsorship. The question remains, however, as to how companies should balance the issues of profitability and altruism. Certainly the company s stakeholders recognize that there is likely some motivation for profitable firms to participate in cause-related marketing programs beyond simple altruism. Improved brand image, satisfied customers, product differentiation from competitors, and increased sales are all reasonable results to expect from participating in cause-related programs. But how do companies most effectively convey their sincerity of motivation to their publics, and balance their capitalistic motivations with their altruistic ones? This area remains ripe for study, and presents interesting ethical dilemmas for marketing managers on the company and cause side alike. Third, though empirical work on customer responses has identified gender and type of purchase (practical vs. frivolous) as moderating variables that controls the intensity of response towards the cause-related

16 40 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING marketing initiative, work on studying moderating effects of other variables is largely absent. Future research opportunities include investigating how variables like consumer awareness, consumer skepticism of and level of involvement with the cause-related marketing program moderate the nature and degree of customer response. Fourth, empirical studies have not been confined to any particular industry or product offering. Questions therefore remain as to whether cause-related marketing initiatives become more or less effective as the product offered or the industry targeted changes. Fifth, a large number of authors list the resulting rewards and risks for companies and nonprofit organizations participating in the cause-related marketing program. However, researchers have not adequately explained the reasons or processes that trigger these rewards and risks among consumers. For example, why does participation in a cause-related marketing initiative sometimes take the place of regular charitable contributions in the mind of the participating consumer, even when the cause-related marketing contribution is far less in value than the consumer generally gives? Developing a deeper understanding of the processes that result in some of these outcomes would greatly assist marketing practitioners as they design cause-related marketing programs for their target audiences, and would aid causes in understanding how to maximize their income through cause-related marketing programs. Sixth, this review indicates an absence of work addressing how cause-related marketing partnerships are determined to maximize returns and maximize market impact. For example, how does Sears decide that Gilda s Club is the right cause to partner with? Why did Sears choose Gilda s Club rather than another, better known cause? In light of the growing popularity of and large investments in cause related marketing programs by firms, these are important questions to answer and understand. Thus, it is evident that further research is needed in order to structure the most effective decision making structure for companies and for causes alike as they determine their cause-related marketing partners. Finally, all empirical work has studied the effectiveness of causerelated marketing by examining the consumer s intent to purchase the sponsored product. Do consumers tend to be loyal to companies that repeatedly engage in cause-related marketing programs, e.g., Avon, Campbell Soups, General Mills? Can the effectiveness of cause-related marketing be more sustainable and long-term than the current shortterm measure of purchase? Are customer loyalty and customer satisfac-

17 Shruti Gupta and Julie Pirsch 41 tion more appropriate indicators of the performance of cause-related marketing? SUMMARY In short, cause-related marketing initiatives represent an increasingly popular method of strategic marketing and competitive differentiation, particularly in mature or saturated markets. Companies frequently turn to this marketing option as a means of exhibiting their corporate citizenship and altruistic intentions, while at the same time contributing to their bottom lines. Causes capitalize on increased consumer attention by partnering with branded products, hoping for increased contributions and improved brand awareness. And, consumers have the opportunity to take advantage of value added to their purchases, assuage any guilt about extravagant spending, and can support their altruistic intentions toward society. This research domain has established a solid base in the literature as researchers have begun to understand the constructs and important variables in this domain. However, as outlined in this paper, important work remains to be done, presenting an exciting and developing opportunity for researchers worldwide. REFERENCES Andreasan, Alan R. (1986), Profits for Nonprofits: Find a Corporate Partner, Harvard Business Review, 74 (6), Barich, Howard and Philip Kotler (1991), A Framework for Marketing Image Management, Sloan Management Review, 32 (2), Barone, Michael J., Anthony D. Miyazaki, and Kimberly Taylor (2000), The Influence of Cause Related Marketing on Consumer Choice: Does One Good Turn Deserve Another? Journal of the Academy of Marketing Science, 28 (2), Bronn, Peggy S. and Albana B. Vrioni (2001), Corporate Social Responsibility and Cause Related Marketing: An Overview, International Journal of Advertising, 20, Brown, Tom J. and Peter A. Dacin (1997), The Company and the Product: Corporate Associations and Consumer Product Responses, Journal of Marketing, 61 (1), Caesar, Patricia (1986), Cause Related Marketing: The New Face of Corporate Philanthropy, Business and Society Review, 59, Carringer, Paul (1994), Not Just a Worthy Cause: Cause Related Marketing Delivers the Goods and the Good, American Advertising, 10 (1), Cone, Inc. (2002), Cone Corporate Citizenship Study, 13.html.

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