CRM_Avipsha_SIMSR Asia

Cause Related MaRketing
Are consumers favorable towards
brands associated with some cause?
Avipsha Banerjee
PGDM-Marketing, 2007-09
SIMSR

3
4
Objective of study
What is CRM
Why do companies go for CRM
Consumer perceptions on CRM
CRM in India
Management implications
Presentation outline
1
2
3
4
5
6

CAUSE
 Lifestyle changes are
taking place and
consumers today are
more socially conscious
like never before
PROBLEM STATEMENT
 Companies are using CRM
is as a tool to differentiate
themselves and increase
sales
Are consumers favorable towards brands associated
with some cause?
EFFECT
Objective of study

Corporate Social Responsibility is about how companies manage the
business processes to produce an overall positive impact on society
“Putting principles into practice”

Cause-Related Marketing refers to a commercial activity in which
companies and nonprofit organizations form alliances to market an
image, product or service for mutual benefit

Cause-Related Marketing (CRM)
 CRM- The process of formulating and implementing marketing
activities that are characterized by contributing a specific amount to a
designated nonprofit effort that, in turn, causes customers to engage
in revenue providing exchanges.
 Not all CRM campaigns channel money to nonprofits; some engage in
educational or awareness-building activities.
 Companies look at immediate gains from such campaigns by
impacting the consumer preferences towards their product.
Peggy Bronn Simcic and Albana Vrioni Bellui (2000), “Corporate social responsibility and cause-related marketing: an overview”,
International Journal of Advertising, Vol.20, pp. 207-222

Types of CRM
Jointly sponsored media activity
where corporation jointly purchases
media time and advertises the cause
Media promotion + consumers receive
coupons. Pre-specified donation is tied
to the coupon- redemption rate
Media promotion + donations tied to
consumer activity such as use of credit
card or purchase
Stewart W. and Whitehouse F.(Aug, 2001),“Cause-Related Marketing via the World Wide Web: A Relationship Marketing Strategy”,
Journal of Nonprofit & Public Sector Marketing, pp 3-22

Why companies engage in CRM
 To build relationships
 Solidify customer loyalty
 Image enhancement
 Creating a brand platform
 Product differentiation
 Increasing sales
Source: Cone/Rooper Study, 2005

Advantages of CRM
 Improving the image of the company in the eyes of customers,
employees and investors
 Differentiating the brand from its competitors
 Increasing short-term sales
 Broaden customer base
 Reach new market segments

Cause Branding
“Short-term, sales driven promotional cause-related marketing has
evolved into Cause Branding, a strategic stakeholder-based
approach to integrating social issues into the persona of a brand.”
1999 Cone/Roper Cause Trends Report: The Evolution of Cause Branding (Business Wire 2000)
Two approaches to CRM
Persuasion Approach Salience Approach
To build brand share and win customers To defend brand share by increasing brand
meaning among existing customers and
encouraging brand trial among non-users
THINK-FEEL-DO
THINK-DO-FEEL
Taylor Lyvia (2007), “Cause-related marketing: a new perspective on achieving campaign objectives amongst fast moving consumer
goods”, Strategic Change , Vol.16, pp. 79-86

What kind of consumers prefer CRM
Demographics
 Women
 Younger people
 Educated people
 People in high income group
Psychographics
 Internal locus of control
 High self-confidence
 High in public self-consciousness
Consumers with a high level of advertising skepticism will show less
support for corporate CRM activities
SUPPORT CRM ACTIVITIES MORE THAN OTHERS
Youn Seounmi and Kim Hyuksoo (March, 2008), “Antecedents of Consumer Attitudes toward Cause-Related Marketing”, Journal of
Advertising Research, pp 123-137

Effect of culture on CRM
Korea
Australi
a
Canad
a
 Canada & Australia prefer
companies which are
 Good corporate citizens
 Associated with a cause
 More involved in the
community
 CRM is less positive in countries where it is less developed
 Values and attitude play important roles in determining preference towards CRM
C
R
M
Lavack A. and Kropp Fredric (2003), “Consumer Values and Attitude Toward Cause-Related Marketing: A Cross-Cultural Comparison”,
Advances in Consumer Research, Vol.9, No.2, pp. 317-330

Consumer values and attitude toward CRM
Positive
response
towards
CRM
 Affect-based complementarity: Since hedonic products tend to evoke more pleasure
and guilt than utilitarian products, charity incentives are most effective with pleasure-
oriented products. The emotions generated by hedonic products appear to complement the
feelings generated from contributing to charity.

What consumers look for in brands involved in CRM
 A cause that is important to them
 A cause – brand fit should be present
 Company’s ethics
 Donation size
Brodeick A., Jogi A. and Garry T. (2003), “Tickled Pink: The Personal Meaning of Cause-Related Marketing”, Journal of Marketing
Management , Vol.19, pp. 583-610
Pracejus John W. and Olsen Douglas G. (2003), “The Role of Brand/Cause Fit in the Effectiveness of Cause-Related Marketing
Campaigns”, Advances in Consumer Research, Vol.30, pp.381
The emotional level of individual involvement is a key differentiating
factor in customer’s awareness, perception and response to CRM
campaigns

Motivating less-involved consumers towards CRM
 Donation proximity
 (Survey by Cone Rooper, 2000) – local causes 55%, national
causes 30% and global causes 10%
 Framing of messages
 Positively framed messages are more effective
Grau Landreth Stacy and Folse J. (2007), “The Influence of Donation Proximity and Message-Framing Cues on the Less-Involved
Consumer”, Journal of Advertising, Vol.36, No.4, pp. 19-33

Causes that consumers want to support
Farake F. And Perks K. (Sept, 2008), “Cause Related Marketing: Consumers’ Perceptions and Benefits for Profit and Non-Profits
Organizations”, Brazilian Administration Review, Vol,5, pp 210-225

Causes that consumers want to support
Source: Consumer Behavior Study Confirms Cause-Related Marketing Can Exponentially Increase Sales, Cone/Duke University Study,
October, 2008

CRM initiatives by foreign brands

Indian consumers on CRM
 Different perspective on CRM compared to American consumers
 Give importance to the origin of the company engaging in CRM
 National companies have an edge over multinational corporations
 Geographic scope of the cause has no effect on evaluation of the
campaign
Ferle C. , Kuber Gayatri and Edwards S. (2007), “Responses to Cause-related Marketing Campaigns in India and the U.S.A”, Journal
of Advertising

Findings
 Face-to-face interview of 12 respondents in Mumbai and Kolkata
 Questionnaire was administered to 107 respondents
 68 males, 39 females
 Locations: Mumbai, Delhi, Kolkata, Bangalore
 Objective: To understand whether CRM impacts customer buying
behavior
 Results:
 Awareness of CRM low
 If a brand already being used ventures into a cause, it would be
greatly supported

Findings
 Product features, price and
brand are primary reasons for
purchase
 78% people are not willing to
switch brands because of
CRM
 In case of low-involvement
products when features and
price of both products are
similar, people might switch
brands

P&G’s Shiksha Campaign
 P&G's global philanthropy program P&G Live,
Learn and Thrive
 P&G India closed Shiksha’08 with the largest-
ever contribution of Rs. 3.2 Crores to CRY
 Sale of Tide, Ariel, Pantene, Olay, H&S, Rejoice,
Vicks VapoRub, Gillette Mach 3 Turbo, Gillette
Series, Oral B, Duracell or Pampers during the
months of April, May & June

Other CRM campaigns in India
Novartis India Limited: donated 2% of the
value of sales of Ovaltine Plus towards
CRY's Gujarat rehabilitation operations,
amount raised was Rs. 40,000
Oberoi Hotels: had specially designed and printed
envelopes placed in all Oberoi properties, wherein the
guests could contribute to CRY collected more than
Rs. 6.50 lakhs in 18 months
HUL: inserting coupons in Brook Bond and Taj Mahal
tea powder packs, a Rs. 5/- per pack contribution to
SOS children’s village, a social service organization
working for educating every child

Other CRM campaigns in India
HUL: announced a contribution of fifty paisa to a
diarrhea project on sale of each LIFEBUOY soap
ITC: for every Classmate Notebooks sold, ITC contributes
Re. 1 to its rural development initiative that mainly
supports primary education in villages
Tata Tea: “Jaago Re! One Billion Votes” campaign motivates
the Indian youth to participate in the electoral process. This is
in collaboration with Janaagraha, a Bangalore based not-for-
profit organization for this campaign

Management implications
 Not all customers react to CRM the same way, the CRM program
should match the target audience’s interests
 The immediate impact of CRM may be on attitudes rather than buying
behavior
 Not all causes are a good fit for all companies
 Causes experience more benefits than sponsoring companies
 ROI need to be assessed
 Advertisers benefit most by being first to use CRM campaigns in
developing countries

The 3Cs approach to CRM
Commitment
Connection
Communication
CRM brands must be aligned to each
other’s brand image, mission and
values
Top management of both companies
should be committed to the cause
Clear measurements and expectations

Future scope
 The sample size of the study can be increased and different
geographies can be covered
 Research can be done separately for various product categories –
FMCG/Luxury/Sevices
 Research findings would also vary across different SEC

References
 Choose wisely: Partnering for cause-related marketing, Maria Kalligeros
 “Social demand and corporate strategy: a corporate social responsibility
model”, Review of Business, Angelidis, J.P. and Ibrahim, N.A.
 http://www.psaresearch.com/bib4301.html
 www.benjerry.com
 http://www.thebodyshop.com/_en/_ww/values-campaigns/index.aspx
 http://www.itcportal.com/sets/greetings_frameset.htm
 http://www.usatoday.com/money/industries/food/2005-08-02-starbucks-
usat_x.htm
 http://ideasmarkit.blogspot.com/2008/12/tata-tea-jaago-re-campaign.html

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