Customers Prefer to Contribute Towards a Social Cause over Sales Promotion Tools

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1 Customers Prefer to Contribute Towards a Social Cause over Sales Promotion Tools Muhammad Saleem Rana Preston University, Islamabad. Dr. Zekeriya Nas HOD Turkish NUML, Islamabad, Pakistan Abstract Cause related marketing is going popular now a days and people are becoming familiar with the new phenomena. Many firms have been successfully implemented the Cause Related Marketing worldwide. This newly introduced approach is also being used by many firms in Pakistan too. This study has focused on exploring whether the purchase of convenience goods in Gujranwala is influenced by cause related marketing and that whether consumers prefer to contribute to social causes over sales promotion tools such as cut prices, free samples and stock out sales etc. or not. Data for the study was collected from a sample of 280 respondents through a questionnaire. And it reveals from the results of the study that majority of the respondents preferto contribute toa social causes over any type of sales promotion activity. However, the dependency of preferring causes on Personal characteristics like sex and age etc. were not seen. Key Words: Cause related marketing, sales promotional tools; Purchase decision of the customer. 1). Introduction Background The term "cause related marketing" was first time introduced by The American Express in 1983, by launching its campaign to raise money for the restoration of the Statue of Liberty. American Express announced to contribute one-cent as donation to the Statue of Liberty every time as and where its card charged by the customer anywhere; in this way they successfully attracted new customers by 45%, andtheir overall sales wereincreased by 28% (Wall, 1984).Participating for charitable causes with brands has become a common practice for many marketing campaign strategically referred as cause-related marketing (Lafferty & Goldsmith, 2005). Varadarajan and Menon (1988) have also defined Cause Related Marketing as the process of formulating and implementing marketing activities that are characterized by anoffer from the firm to contribute a specified amount to a designated cause when customers engage in COPY RIGHT 2013 Institute of Interdisciplinary Business Research 657

2 revenue-producing exchanges that satisfy organizational and individual objectives. Organizations are keen to enter into Cause Related Marketing as competition has been expanded globally and as development of brand loyalty is also demanded. And it may also provide better results than any other sales promotion activities like discounts at prices, free samples etc... (Mason, 2002).The benefitsfor Cause Related Marketing has been defined as a win, win and win, scenario for business, customer and as for as the good cause also (Adkins, 1999). When the price and the quality factors of competitive products are equal then it is the social responsibility of the firm to decide purchasing factor for the consumer (Holmes, 2001). When the cost associated with the cause is minimal then it will positively influence willingness of consumer to buy a product related to the cause(vaidyanathan&aggarwal, 2005). According to Business in the Community (1998), a corporate survey report, it has been reported that about 81% of consumers are more likely to prefer the products or services that are associated with a good cause. Now a day, Americans aremore receptive to Cause Related Marketing than ever before. And it is 76% of the Americans who believethat it is more acceptable for the companies to engage in Cause Related Marketing. Cynicism towards Cause Related Marketing is quite low. And Only 21% questionedabout the motives of companies related to the good cause.cause Related Marketing has been successfully implemented by many firms and it is significantly increasing day by day. In 1997, 15 cents have been donated by the Coca Cola to mothers against drunk driving for every case of Coca-Cola sold at more than 400 Wall Mart Stores during the six week promotion.and in this way sales for Coke at these stores were increased by 490% during the promotion (Friel, 2004).In 1999,$630 million was spent on marketing deals and that benefited charities (Meyer, 1999). Cause related marketing is beneficial for the cause and as well as for the firms also. There are lots of benefits available for the firms. And Following are the benefits of cause related marketing for a firm related to the good cuase (Dean, 2003):- (1) Creating Goodwill in the community. (2) Distinguish the corporate image and its brands from the competitors (3) Better acceptance for increase in the price. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 658

3 (4) High morale. (5) Recruitment of new employees (6) Less criticism on the policies during crises. (7) Winning over skeptical public officials (8) Increase revenues and profits Problem Statement For the success of the cause related marketing, there should be a perfect fit between the product or brand of the company and the cause associated with the marketing (Welsh, 1999). The unfamiliar cause will be familiar with the alliance of a popular brand and the effect of the alliance on the brand attitudes is positive regardless of the degree of familiarity of the cause associated with the marketing (Lafferty & Goldsmith, 2005). Cause Related Marketinghas also been criticized as having selfish motives to improve the image and sales of the product by relating it with a good cause. But it can be overcome with the long term commitment to the cause (Arnott, 1994).And an organization can develop a better image of the brand with the long-term commitment to cause (Meyer, 1999). During the holy month oframzanin 1998,a campaign, "Help the Needy" was launched by Procter and Gambles in several Islamic countries includingpakistan. The related cause was to assist the less fortunate children in the society by providing them their most exigent needs. Although the term Cause Related Marketing is newly introduced in Pakistan but it is being implemented by the firms with positive approach. We are going to conduct a study to know the preference ofcrmover sales promotion. The selective area of study is Gujranwala and the specific products category was shampoos, soaps, toothpaste, detergents, chewing gums, cigarettes, tea, ghee, oil, candies, and milk. Research Objectives 1. What is the most important factor for the consumer while going to purchase routine items? 2. Either the products related to the cause are preferred or not? 3. Either the contribution towards a cause is preferred by the consumer or not? COPY RIGHT 2013 Institute of Interdisciplinary Business Research 659

4 4. Why a consumer preferred to buy a particular brand of daily items? 5. Either there is a relationship between income, qualification, age, gender and the preference for cause related products? Hypothesis H1: CRM is being preferred over discounts. H2: CRM is being preferred over free samples. H3: CRM is being preferred over Coupons. H4: CRM is being preferred over POP. H5: CRM is being preferred over sales promotion activities. 2). Literature Review Cause Related Marketing According to cause-marketing consultant Daw (2006), cause-related marketing (CRM) is a mutually beneficial collaboration between a corporation and a nonprofit in which their respective assets are combined to. Create shareholder and social value Connect with a range of constituents (be they consumers, employees, or suppliers) Communicate the shared values of both organizations Examples of CRM are given as under:- Requests for small donations for children s charities at the supermarket checkout. Public awareness campaigns for HIV/AIDS, breast cancer, and other causes. Licensing of well-known charity trademarks and logos, like World Wildlife Fund s panda. Hand wash day by Lifebuoy. Help the needy by Ariel. Sales Promotional Activities A sales promotion is an incentive that is offered to a consumer or potential business customer to spur the purchase of a product or service. Many companies use sales promotion strategies to produce a short-term increase in sales. A company can offer many types of sales promotion COPY RIGHT 2013 Institute of Interdisciplinary Business Research 660

5 activities including free samples, coupon, discounts, premiums, product demonstrations, pointof-purchase (POP) materials and even refunds or rebates (Suttle, 2009). Purchase Decision It has been proved by the researchers that there are five stages involved in making a purchase decision of the customers. And these five stages are as below (Raybould, 2008). Problem recognition. Information search. Evaluation of alternatives. Purchase decision. Post purchase behavior. Variables CRM and sales promotion activities are independent variables whereas the purchase decision of the customer is a dependent variable. Conceptual Framework COPY RIGHT 2013 Institute of Interdisciplinary Business Research 661

6 3). Research Methodology Research Strategy Quantitative research technique was used for this research study. And information was collected throughout the city through a questionnaire. Total 280 samples were taken from the city for the study. Sample A sample of 280 respondents was selected from Gujranwala for the study. Males accounted for 70% and female 30% of the sample. All the respondents were related to the different professions but students havingthe major of the representatives as 35%. About 62% of the respondents were belonged to the age group between years.the sample has also been divided On the basis of qualification as, 12% respondents having masters, 30% havingbachelors, 35% having intermediate and the rest of the respondents having qualification matriculation or below. Research Instrument A Questionnaire was adopted as an instrument for the collection of data for the study. And the questionnaire was well structured and it was also pre-tested before the actual survey was started. Research Procedure The survey for the study was conducted though out the Gujranwala. And all 280 respondents were selected from all main areas of the City. The data was collected through the questionnaire and it was analyzed through the SPSS. Following tests were conducted at SPSS:- Frequency distribution Chi-square goodness-of-fit Chi-square test of independence COPY RIGHT 2013 Institute of Interdisciplinary Business Research 662

7 4). Data, Presentation, Analysis and Interpretation All the data was tested through SPSS and the results of the study are as blow:- Table 1:- Factors Frequency Percentage Discounts Quality Packaging Prestige Advertisement Co./Brand names Price Others Total The table shows that the majority of the consumers give importance to the quality before purchasing of the routine items. It is further added that 92 out of 280 respondents consider quality as the most important factor.then it is followed by the price and Discounts respectively. The Others factors illustrated above included those who consider more than one factors. Table 2:- Response Frequency Percentage Yes No Total The respondents were asked a question whether they entrusted to buy a product related to a good cause and the majority of them say yes. It shows that most of the people prefer to buy goods related to the cause. Although a small group of respondent gives their negative opinion related to cause related marketing. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 663

8 Table 3:- Options Frequency Percentages Sales Promotions Cause Both Total The respondents were asked a question whether they prefer to get the benefits from sales promotions activities or entrusted to contribute towards a good cause. And the respondents give their preference with a majority of 67.86% in favor of a good cause. And only 89 out of 280 respondents prefer sales promotions like discounts, free samples etc Table 4:- Alternatives Frequency Percentages Education Help for handicapped Both Total We are able to know the responses of 280 respondents towards the various alternate causes related to the different kind of products. As the term Cause related marketing is newly introduced in Pakistan therefore,the choice is available in the limited fields only. Efforts are being done in the field of education and health on priority basis. However, steps are required to taken in other areas also. Table 5:- Response Frequency Percentage Yes No Total COPY RIGHT 2013 Institute of Interdisciplinary Business Research 664

9 Ariel is a brand name of a leading detergentof M/s Procter and Gamble. Arial introduced a cause related marketing campaign, Help the Needy in the holy month of Ramzan in several Islamic Countries of the world including Pakistan. Data given in the above said table is related to the response of the respondents against the marketing campaign launched by the Ariel. Majority of the respondents added that they have purchased Ariel in the month of Ramzan due to its relation with a good cause. Preference of the cause over sales promotion activities is dependent to the different factors like age, profession, gender, qualification and as well as income level of the respondent. And the dependency level was tested through Pearson Chi-square test of dependency. And it was revealed from the results of the tests that there was no dependency of these factors and respondents having similar preferences irrespective of their age, profession, qualification etc 5). Discussion and Conclusion Now we are able to conclude from the above given data that quality is the most important factor to purchase a routine item by the consumer. And majority of the consumer prefer to buy the products related to a good cause like free education to the poor children, help to the handicapped, health facilities etc.., over the sales promotion activities like discount, free samples and any kind of scheme. Here we are able to conclude that all the hypotheses have been proved and these findings support the previous works of Meyer, 1999; Dean, 2004; Vaidyanathan and Aggarwal, Therefore, it has been proved from the above data that consumers preferred to contribute towards the cause over any kind of incentives. Majority of the respondents are entrusted to help the poor children for education and health specially. Although a small proportion of the respondents are entrusted in different kind of incentives like discount, extra quantity etc It has also been proved with the help of different kind of tables that People are similarly motivated towards the good cause having different ages, profession, and gender and income levels.it has also become cleared from the results that people at Gujranwala prefer to buy products related to the good cause. In this way they are able to help out the needy persons in different fields of life. Therefore, if an organization is entrusted to get the maximum share from the market at Gujranwala then they have to introduce a well designed marketing campaign COPY RIGHT 2013 Institute of Interdisciplinary Business Research 665

10 related to a good cause especially in the field of education or health. In this way an organization may attract a large number of customers towards their products or services.any how some customer having different point of view that organizations are using these tricks for the sake of new customer. Recommendations As retention as well as attraction of the customer is important for the organization, therefore, confidence of the customer is very important.and long term relationship of the organization with the cause is the only way to satisfy the customers. It is further added that Achievements and experiences are also required to be share with the public through publicity and advertisementfor seeking confidence of the customers. Organizations are also required to be hire services of the well known celebrities with a good reputation for seeking attention of the customers. In this way doubts can be reduced and organization can enjoy the benefits of public confidence over the campaign started by the organization associated with a good cause. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 666

11 References Adkins, S. (1999). Cause related marketing; that cares wins. Oxford: Butterworth Heinemann. Arnott, N. (1994). Marketing with a passion; Sales and Marketing Management, 146 (1), Dean, D.H. (2003). Consumer perception of corporate donations: Effects of company reputation for social responsibility and types of donation. The journal of advertising, 32(4), 92. Friel, J.S. (2004, November 5). Proving the win-win strategy of cause related marketing. Holmes, P. (2001). Just cause In Dean, D. H. (2003). Consumer perception of corporate donations: Effects of company reputation for social responsibility and types of donation. The journal of advertising, 32(4),92. Lafferty, B.A. (2005) Cause--brand alliances: does the cause help the brand or does the brand help the cause?the journal of business research, 58(4), Mason, T. (2002). Good causes deliver for brands: Do companies gain from being socially responsible? Marketing, 4, 11. Meyer, H. (1999). When the cause is just.the journal of business strategy, 20 (60), Varadarajan, P.R. (1988). Cause-related marketing: A co alignment of marketing strategy and corporate philanthropy.the journal of marketing, 52(4), ` Vaidyanathan, R. (2005). Using commitments to drive consistency: Enhancing the effectiveness of cause related marketing communications. The journal of marketing communications, 11(4), Wall, W. L. (1984). Companies change the ways they make charitable donations. The wall street journal, 1, 19. Welsh, J. (1999). Good cause, good business. Harvard Business Review, 77 (5), The journal of managerial sciences, II, 1, 139. COPY RIGHT 2013 Institute of Interdisciplinary Business Research 667