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Cause Related Marketing Essays

Master thesis Fall 2009 Kristianstad University MBA International Marketing ? ? ? Cause Related Marketing ????????????????????????????????????????????? ?????????????????????????????????????????????????? ? ? ? ? ? ? ? Writer Valentina Alcheva Yonggang Cai Lingyan Zhao Supervisor Christer Ekelund Examiner Hakan Pihl I Abstract American Express initiated a new marketing strategy twenty-five years ago. For every new card user the company donated one cent for the recovery of the Statue of Liberty. The success of the campaign exceeds the expectations.
This strategy where a company declares to spend a defined amount of money for a special cause in order to push up its sales is called Cause-Related Marketing. Now more and more companies use the cause-related marketing strategy as a way out of saturated markets and growing consumer awareness. Billions of dollars are spent every year in cause campaigns. Because it is a relatively new approach many researches has shown interest in this marketing communication strategy. However, there is still lack in the field of cause-related marketing and especially in the consumer part.
This is also the field of interest for this dissertation and in particular how does cause-relates marketing strategy shape consumer attitude, perception and buying behaviour? In order to find out the answer of this question we relied on different theories and in addition we conducted a questionnaire among international students. The results, even though restricted trough the sample, showed that there is a connection between the cause-related marketing and buying behaviour and attitude. Consumers are more likely to support companies which are engaged in cause campaigns and tend to develop positive attitude toward this company and its products.
The research was limited to sample of students who took part in the questionnaire. A further investigation in this field could deliver deeper information and be useful for companies and researchers in the field of marketing communication and marketing strategies. Keywords: Cause-related Marketing, consumer attitude, perception, buying behaviour, marketing communication, II Acknowledgment Kristianstad, December 2009 This master dissertation is our final assignment before we graduate from Kristianstad University. We are very grateful to have the opportunity to meet each other and enjoy the work as a team.
For this work we express our great thanks to our supervisor, Christer Ekelund, whose effort, support, time and patience enabled us to complete this project. His humour also made this long learning process easier. Further, we would like to thank Annika Fjekner for her ever so important feedback on the written language and layout in our dissertation. Pierre Carbonnier and Timus Umans also deserve our gratefulness. Without their feedback and support in SPSS it would have been very difficult for us to complete our analysis. We would also like to thank Zana Malisevskaja for her help with our questionnaire.
Without her it would have been very difficult to obtain so many respondents as we did in this research. Valentina Alcheva Yonggang Cai Lingyan Zhao III Table of Contents 1.? Introduction ……………………………………………………………………………………… 1? 1. 1.? Background ……………………………………………………………………………………. 1? 1. 2.? Purpose ………………………………………………………………………………………….. 5? 1. 3.? Research question……………………………………………………………………………. ? 1. 4.? Practical Problems …………………………………………………………………………… 6? 1. 5.? Outline of the thesis ………………………………………………………………………… 6? 2.? Method …………………………………………………………………………………………….. 7? 2. 1.? Choice of methodology ………………………………………………………………….. .. 7? 2. 2.? Research philosophy ……………………………………………………………………….. 7? 2. .? Research approach ………………………………………………………………………….. 9? 2. 4.? Choice of theory ……………………………………………………………………………. 10? 2. 5.? Summary ……………………………………………………………………………………… 11? 3.? Theoretical Framework …………………………………………………………………… 13? 3. 1.? Marketing …………………………………………………………………………………….. 13? 3. 1. 1.?
Definition of marketing …………………………………………………………….. 13? 3. 1. 2.? Marketing mix- Ps and Cs …………………………………………………………. 14? 3. 2.? Marketing communication ……………………………………………………………… 15? 3. 2. 1.? Marketing communication definition ………………………………………….. 15? 3. 2. 2.? The objective of marketing communication …………………………………. 15? 3. 2. 3.? CRM is one form of marketing communication ……………………………. 16? 3. 3.?
Cause-related marketing…………………………………………………………………. 16? 3. 3. 1.? Definition of Cause Related Marketing……………………………………….. 16? 3. 3. 2.? Stages of Development ……………………………………………………………… 17? 3. 3. 3.? Main requirement and cause ties ……………………………………………….. 18? 3. 3. 4.? Types of CRM ………………………………………………………………………….. 19? 3. 3. 5.? Benefits and risks of CRM …………………………………………………………. 0? 3. 3. 6.? Objective of CRM-brand purchase intention ……………………………….. 21? IV 3. 4.? Consumer analysis ………………………………………………………………………… 22? 3. 4. 1.? Perception ………………………………………………………………………………. 22? 3. 4. 2.? Attitude …………………………………………………………………………………… 23? 3. 4. 3.? Consumer behaviour ………………………………………………………………… 24? 3. 5.?
Summary ……………………………………………………………………………………… 29? 4.? Empirical method ……………………………………………………………………………. 31? 4. 1.? Research strategy ………………………………………………………………………….. 31? 4. 2.? Time horizon ………………………………………………………………………………… 32? 4. 3.? Data collection ……………………………………………………………………………… 32? 4. 4.?
Population ……………………………………………………………………………………. 33? 4. 5.? Sample selection……………………………………………………………………………. 34? 4. 6.? Operationalisation …………………………………………………………………………. 35? 4. 7.? Reliability …………………………………………………………………………………….. 37? 4. 8.? Validity………………………………………………………………………………………… 7? 4. 9.? Generalisability …………………………………………………………………………….. 38? 4. 10.? The Questionnaire …………………………………………………………………………. 39? 5.? Analysis ………………………………………………………………………………………….. 42? 5. 1.? Introduction and descriptive statistics ………………………………………………. 42? 5. 2.? Background questions ……………………………………………………………………. 4? 5. 2. 1.? Gender ……………………………………………………………………………………. 44? 5. 2. 2.? Nationality ………………………………………………………………………………. 46? 5. 2. 3.? Education program ………………………………………………………………….. 47? 5. 2. 4.? Consumer type…………………………………………………………………………. 48? 5. 2. 5.? Summary of background …………………………………………………………… 0? 5. 3.? Two-way ANOVA test for perception, attitude and behaviour ……………. 51? 5. 3. 1.? Test description ……………………………………………………………………….. 51? 5. 3. 2.? Normality ……………………………………………………………………………….. 52? 5. 4.? CRM perception ……………………………………………………………………………. 53? 5. 4. 1.? Question 5 ………………………………………………………………………………. 54? 5. 4. 2.?
Question 6 ………………………………………………………………………………. 57? 5. 5.? Attitude………………………………………………………………………………………… 61? 5. 5. 1.? Question 7 ………………………………………………………………………………. 62? V 5. 5. 2.? Question 8 ………………………………………………………………………………. 65? 5. 5. 3.? Question 9 ………………………………………………………………………………. 68? 5. 5. .? Question 10 …………………………………………………………………………….. 73? 5. 6.? Behaviour (Question 11-14)……………………………………………………………. 77? 5. 7.? Correlation between perception, attitude and behaviour……………………… 80? 5. 7. 1.? Relationship between perception and attitude ……………………………… 81? 5. 7. 2.? Relationship between attitude and behaviour ………………………………. 83? 5. 7. 3.? Summary of correlation between perception, attitude and behaviour 85? 5. .? Conclusion of analysis …………………………………………………………………… 86? 6.? Conclusion ………………………………………………………………………………………. 88? 6. 1.? Summary of dissertation ………………………………………………………………… 88? 6. 2.? Conclusions ………………………………………………………………………………….. 89? 6. 3.? Self criticism ………………………………………………………………………………… 92? 6. 4.?
Theoretical and practical contribution ……………………………………………… 92? 6. 5.? Further study ………………………………………………………………………………… 93? REFERENCES ………………………………………………………………………………………. 95? APPENDIX ………………………………………………………………………………………….. 104? Appendix A Questionnaire ………………………………………………………………… 104? Appendix B: Statistical data – two-way ANOVA for Q5 ………………………… 109? Appendix C: Statistical data – two-way ANOVA for Q6 …………………………. 111? Appendix D: Statistical data – two-way ANOVA for Q7…………………………. 113? Appendix E: Statistical data – two-way ANOVA for Q8 …………………………. 115? Appendix F: Statistical data – two-way ANOVA for attitude to Q9 ………….. 117? Appendix G: Statistical data – two-way ANOVA for Q10……………………….. 123? Appendix H: Statistical data – two-way ANOVA for Q11-14 ………………….. 125? VI Table list:
Table 3. 1: Development stages of CRM ……………………………………………………. 18? Table 5. 1 Gender awareness ……………………………………………………………………… 45? Table 5. 2 Nationality………………………………………………………………………………… 46? Table 5. 3 education program……………………………………………………………………… 48? Table 5. 4 Consumer types …………………………………………………………………………. 49? Table 5. Mean score of different consumer type…………………………………………. 50? Table 5. 6 One-Sample Kolmogorov-Smirnov Test ………………………………………. 52? Table 5. 7 Cronbach’s alpha……………………………………………………………………….. 53? Table 5. 8 Tests of Between-Subjects Effects for awareness ………………………….. 56? Table 5. 9 Tests of Between-Subjects Effects for interpretation ……………………… 59? Table 5. 10 Cronbach’s alpha……………………………………………………………………… 1? Table 5. 11 Tests of Between-Subjects Effects for Preference of cause ……………. 63? Table 5. 12 Mean of the attitude to cause …………………………………………………….. 66? Table 5. 13 Tests of Between-Subjects Effects for attitude to cause ………………… 67? Table 5. 14 Tests of Between-Subjects Effects for “attitude to themselves”……… 71? Table 5. 15 One way ANOVA test for Asian ……………………………………………….. 71? Table 5. 16 One way ANOVA test for European …………………………………………… 2? Table 5. 17 Tests of Between-Subjects Effects for attitude to company …………… 75? Table 5. 18 Cronbach’s alpha……………………………………………………………………… 78? Table 5. 19 Tests of Between-Subjects Effects for behaviour …………………………. 79? Table 5. 20 Chi-Square Tests ……………………………………………………………………… 82? Table 5. 21 Chi-Square Test……………………………………………………………………….. 83? Table 5. 2 Chi-Square Tests ……………………………………………………………………… 84? Table 5. 23 Chi-Square Tests ……………………………………………………………………… 85? VII Figure list: Figure 2. 1 The deductive and the inductive approach …………………………………….. 9? Figure 2. 2: Illustration of the relationship between theory and research ………….. 11? Figure 3. 1 Marketing mix …………………………………………………………………………. 14? Figure 3. Main requirements and cause ties ……………………………………………….. 19? Figure 3. 3: Decision- making process …………………………………………………………. 26? Figure 3. 4: Maslow’s hierarchy of needs …………………………………………………….. 27? Figure 3. 5 Conceptual model CRM Strategy ……………………………………………….. 29? Figure 4. 1: The control variable and dependent variable……………………………….. 36? Figure 5. 1: Respondents enrolled in different programs ………………………………… 43?
Figure 5. 2: Awareness of CRM …………………………………………………………………. 54? Figure 5. 3: The mean awareness of Nationality-education program correlation .. 55? Figure 5. 4: Interpretation of CRM ……………………………………………………………… 58? Figure 5. 5: Mean interpretation of CRM for Nationality-education program correlation ………………………………………………………………………………………………. 59? Figure 5. 6: Preference of cause ………………………………………………………………….. 2? Figure 5. 7: Preference of cause for Nationality-education program correlation .. 63? Figure 5. 8: Attitude to cause ……………………………………………………………………… 65? Figure 5. 9: Attitude to cause for Nationality-education program correlation ……. 66? Figure 5. 10: Willingness to buy the product when price increases by 10%. …….. 69? Figure 5. 11: Attitude to yourself for Nationality-education program correlation 70? Figure 5. 12: Attitude to company ………………………………………………………………. 74? Figure 5. 3: Attitude to the company for Nationality-education program correlation ………………………………………………………………………………………………. 75? Figure 5. 14: Behaviour to the company and product with cause …………………….. 78? Figure 5. 15: Behaviour for Nationality-education program correlation …………… 79? Figure 6. 1: Conceptual model CRM strategy ………………………………………………. 90? VIII 1. Introduction The first chapter of this dissertation begins with a description of background information, which leads into the topic of cause-related marketing.
We then present the purpose, and the research question as well as practical problem. The chapter ends with an outline of the dissertation. 1. 1. Background According to Marin and Ruiz ((2007) cited in Bigne-Alcaniz, Curras-Perez & Sanchez-Garcia, 2009), it is difficult for companies to differentiate their brands from competitors by traditional attributes, such as price and quality, because of the increased competition in markets nowadays. To become meaningful entities for consumers to identify with, brands need to be associated with some symbolic values, such as altruism and civic mindedness.
Bhattacharya and Sen, (2003, p. 32) also suggest that “building stable committed relationships is beneficial for both parties. ” In this context, many corporations have discovered the importance of strategic social alliances, and developed corporate social responsibility (CSR) programs (Maignan & Ralston, 2002). As a type of CSR, cause-related marketing (CRM) has received the interest of specific corporations. Tsai (2009, p. 650) states that “CRM has gain ever-growing popularity among brand marketers, who believe this approach helps to enhance both-brand attitude and purchase intention”.
CRM has became one of the fastest growing forms of marketing communication, which is reflected in increased expenditures on this form of communication with customers. It has reached $1. 52 billion in US in 2008, a 5. 5 per cent increase over the $1. 44 million spent in 2007 (IEG Sponsorship Reports, 2009). CRM is one form of the fastest growing marketing communications due to the fact that it is a win-win-win situation for 1 businesses, Non-profit organizations, and consumers (Endacott, 2004).
With the help of CRM, businesses can increase sales, enhance the businesses reputation and build the brands. The Non-profit organizations gain funding as well as publicity. Consumers have the possibility by contributing to a cause to satisfy their altruistic needs (Polonsky & Wood, 2001). Besides the interest of corporations, CRM has increasingly become a subject of scientific interest, and several researchers have defined CRM. The definition of CRM that was developed and adopted for the purpose in this study is from Varadarajan and Menon (1988 cited in Berglind & Nakata, 2005, p. 44). Varadarajan and Menon state that: Cause related marketing is the process of formulating and implementing marketing activities that are characterized by an offer from the corporation to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives. According to Hou, et al. (2008) when establishing partnership with a cause, there are a number of causes to choose from, it could be everything from health, animal protection, human services, and environmental causes, and so on. Hou, et al. 2008, p. 365) also suggest that “how a corporation chooses a cause depends on different variables that are deemed or perceived important by the consumers of this corporation. ” They also state that corporation should choose causes which fit with their own corporations and consumers. Gupta and Pirsch (2006) have examined the relationship between the corporation, cause and customer and how the fit level between these three groups influences consumer response by generating a positive attitude toward the corporation-cause alliance and purchase intention for the sponsored product.
They found that the higher fit level, the better the result the corporations obtain. 2 There are many different motives for companies to participate in CRM activities. Besides performing social responsibility, some companies are likely to have commercial motives for doing so, which include increasing sales, recruiting new employees, improving brand, and so on. A study conducted by File and Prince (1998 cited in Westberg, 2004, p. 32) state that “more than half of the companies participating in CRM were seeking to improve brand purchase intention. To capitalize all possible advantages, it is critical for a company to communicate with its customer about the CRM work. On the other side, consumers also wish to be informed about the company’s CRM activity (Westberg, 2004). Hence, it is important to put more effort on studying the CRM issue from a consumer perspective. Several researchers have examined the consumers’ response to CRM strategy. For example, Cone et al. (2004 cited in Gupta & Pirsch, 2006, p. 316) find that consumers seem to have positive attitudes toward companies who are establishing CRM. More than 80 percent of the consumers surveyed trust firms which support a cause more than firms that do not support a specific cause. 86 percent of consumers surveyed said they would switch brands to a cause-supporting product when faced with a choice of equal product, price and quality. ” However, we believe that consumers with different backgrounds respond to CRM differently. The background includes a wide spectrum of facets, such as education, nationality, gender and age. The factor of gender has been examined by Westberg (2004).
He found that women have a more positive attitude to CRM strategies than men do. According to Endacott (2004), consumers from different countries have different perceptions of CRM. Many Spanish consumers regard CRM as egoistic, and clearly demonstrated that they will not tolerate the mercantilist abuse of the CRM strategy. Despite of previous research, there is lack of findings in the area of the process of consumer response to CRM strategy. Since CRM is one form of marketing 3 communication, we decided to look at the process of consumer response to marketing communication. As Ace (2001, p. ) says, “the process of a marketing communication takes consumers through three stages of response: perception, attitude and behaviour stages. ” The perception stage refers to the knowledge stage including awareness, comprehension and attention to the message. The successful promotion work needs to be noticed. “Noticing is different with seeing, which means that we actually give the message to our selective attention, selecting it from all the other stimuli around us at the time (Ace, 2001, p. 4). ” Fill (2002, p. 63) suggests that each day individuals are exposed to a tremendous number of stimuli.
It is said that “each consumer is exposed to over 550 advertisements every day. ” To cope with this bombardment, our sensory organs select those stimuli to which attention is given. Then we organize and interpret the selected stimuli. The attitude stage refers to the linking stage. We are convinced that a product will do what the message says. Fill (2002, p. 80) sees the “attitude as a link between thoughts and behaviour. ” “The attitude toward a brand can be established and maintained in a consistent way, so that it appears that managing attitudes (toward a brand) is important for every company (Ace, 2001, p. 4). ”
The behaviour stage is that stage where the knowledge and positive feeling are likely to affect behaviour, so action will be taken. A purchase will be made and adoption of the product or service will be the result. Thomas and James (1996, p. 243) state that “the buying behaviour contains the consumer’s intention to buy and the actual purchase behaviour. ” The purchase 4 intention refers to the consumer’s predisposition to action prior to the actual purchase decision. While actual purchase buying behaviour is a complicated issue due to the fact that many internal and external factors have an effect on it. Blackwell, et al. 2006, cited in Blythe, 2008, p. 261) has divided the purchase behaviour into seven stages (see fig. 3. 2). As one form of marketing communications, we imagine that CRM also affects consumers’ brand purchase intention through the following stages: perception, attitude and behaviour. That is why we decided to study how CRM affects consumer purchase intention based on these three stages. Further, we will study how consumers’ background affect their response to CRM strategy, including education, gender, and nationality. It is of an interest for us to explore the topic and bring a new additional perspective in this field of research.
We believe that our findings will add a practical view to the companies which strive to establish successful CRM. 1. 2. Purpose The purpose of the current study is to contribute to a developing body of research in the emerging area of cause-related marketing. As discussed in the preceding section, there is a need to understand how consumers respond to CRM. In our paper, we intend to explore consumers’ perception of CRM strategy, attitude toward the CRM strategy and behaviour. Further, we will try to explore how the consumers’ background affects their response to CRM, including gender nationality, education program and consumer types. . 3. Research question How does CRM strategy shape consumers’ perception, attitude and behaviour? 5 1. 4. Practical Problems To make a CRM strategy achieve the expected outcome a deep research should be made before. Since the processes of response to CRM strategy are hidden, it is difficult for researchers to define how many process stages exist. There may be more than the three response processes perception, attitude and behaviour. Further, there is lack of findings in the area of how cause-related marketing impacts consumers’ behaviour, perception and attitude, so some parts may be deficient in theoretical support.
Also, the questionnaire will be conducted within a small sample due to the limited resource and time. Additionally, the participants are students, they cannot represent all types of consumer, and this will affect the generalisation of the findings. 1. 5. Outline of the thesis Chapter 1: The introduction gives the reader a background and discussion of the problem that the thesis is dealing with. The purpose and research questions are presented. Chapter 2: The second section presents the method used for this research. During our research process a deductive approach will be used.
Chapter 3: Section three contains the theory related to our topic, which will be a basis for the analysis of the empirical data. It ends with a short summary. Chapter 4: The fourth section includes the empirical data presentation. Chapter 5: Chapter five tackles the analysis of the questionnaire. Chapter 6: In the sixth section, the dissertation is summarized and the conclusion is presented together with contributions, self criticism and future research perspectives. 6 2. Method The second chapter of this dissertation begins with a decision about the methodology of the dissertation.
We then discuss the research philosophy and the research approach and end up with the choice of theory. The chapter ends with a short summary. 2. 1. Choice of methodology The aim of this work is to explore how a cause-related marketing campaign shapes consumers’ perception, attitude and behaviour. The literature supports that a cause related marketing strategy increases the sales volume of the company doing this kind of promotion. However, there is still a lack in the field of buyer’s behaviour and his/her attitude toward this communication strategy.
Our goal is to find the variables which play a role during the process of buying intention and after that. This kind of investigation we plan to do by creating a questionnaire and carrying it out among (potential) buyers, in this case students, with different backgrounds and social beliefs. 2. 2. Research philosophy It is important to have a clear idea of research philosophy, to obtain the objectives of our dissertation. Since research philosophy contains important assumptions about the way in which researchers view the world we will use these assumptions to underpin our research strategy (Saunders et al. 2009, p. 110). Saunders et al. state that there are four types of research philosophies, namely positivism, realism, interpretivism and pragmatism. Saunders et al. (2009, p. 114) suggest that “positivism relates to the philosophical stance of the nature scientist. This entails working with an observable social 7 reality and the end of product can be law-like generalisations similar to those in the physical and nature science. ” By adopting this philosophy, the researcher is expected to be independent of the data and to maintain an objective stance.
The second type is realism. Saunders et al. (2009, p. 116) suggest that “it is based on the belief that a reality exists that is independent of human thought and belief or knowledge of their existence, but is interpreted through social conditioning. ” When adopting this philosophy, the research is influenced by the researcher’s personal value, such as world views, cultural experiences and upbringing. Saunders suggests this philosophy is often used in studying human subjects as it shows understanding for people’s perception of socially constructed interpretation and meaning.
Saunders et al. (2009, p. 118) see interpretivism as “an epistemology, which advocates that it is necessary for the research to understand the difference between the human mind and reality”. This approach is appropriate in research in business and management field such as organisational behaviour, marketing and human resource management. The last one of the four research types is pragmatism, which according to Saunders et al. (2009, p. 112) “holds the idea that the most important determinant of the epistemology, ontology and axiology adopted is the research question”.
It focuses on practical applied research, integrating different perspectives to help interpret the data. After considering all types of research philosophy, we draw a conclusion that the mixture of positivism, interpretivism and realism philosophies will be used in our dissertation. The reasons are as follows. First of all, the researchers are expected to be objective. Second, although we strive for our research to be generable, it is 8 impossible as it is carried out within a particular circumstance, where only students participate in the study.
The last reason is that our topic is about human subjects, which is often used by realism philosophy. 2. 3. Research approach According to Saunders et al. (2009), there are two general ways of approaching a research problem, namely the deductive and inductive approach. The deductive approach is based on the logical way of thinking and the conclusion drawn from the theory. Thus, the deductive approach means that the research starts from already existing theories and model, from which propositions are developed and subsequently tested through empirical studies.
The inductive approach means the research starts from empirical studies and these studies are subsequently related to existing theories. Deductive approach Selected empirical Selected theory practice Theory Inductive approach Selected empirical Selected theory Figure 2. 1 The deductive and the inductive approach (adopted from Ekelund, 2002, p. 19) Figure 2. 1 shows that the inductive approach begins with a practical approach and, thereafter, changes to a theoretical approach. It is also shown that the deductive approach begins with a theoretical approach, and changes to a practical approach. In our dissertation, a deductive approach is utilized, since there are different theories of CRM, consumer behaviour, perception, and attitude, which provide the base for this paper. 2. 4. Choice of theory To gain a better understanding of how CRM strategies shape consumer perception, attitude, and behaviour, we started our theoretical research by searching different articles in order to gain a general notion about marketing, as well as about marketing communication theory. As one form of marketing communication, CRM theory was described in detail.
The objectives of CRM vary from a simple sales promotion to integrating the CRM strategy as a part of a CSR. Meffert and Holzberg (2009, p. 48) give an overview of how in every stage in the cause-related marketing campaign different aims define every phase. Further, we research the theories about the cause-fit and main requirement. Meffert et al. (2009) has shown that a fit between the community and the cause (cause-fit), between company, NPO and consumer (brand-fit) and profit organization and non-profit side (partner-fit) plays a huge role.
Moreover, we present the type of CRM developed by Stole (2006), as well as the benefits and risks of CRM. We also want to present the existing theories about the psychological and psychical factors of consumer behaviour. To narrow down the research area, we choose to analyse three elements: perception, attitude, and behaviour. These three elements are connected together, and we think this is a complex and invisible black box where all decision making processes are hidden away within the human mind. By presenting these theories of perception, attitude and behaviour, we show how consumers make their buying decision. 0 Eventually, the theory of brand purchase intention is also an important part for this paper, since this is the aim of the corporation which do CRM. With the help of the theory about how advertising might work (Ace, 2001, p. 8), we developed our research model. This model has a central role in our dissertation. 2. 5. Summary The implementation of scientific method(s) is absolutely essential to gather a set of reliable facts. Accumulating only facts is by far not enough for a good research. There must be a theory with the capacity to guide the research as well as to summarize the results of previous bservations (Christensen, 2004). Further on there should be an interaction between the theory and the empirical method (see figure 2. 2). Observations from use of the scientific method Initial formulation of the theory Indicates theory Is useful in accounting for a phenomenon Generates predictions Indicates theory is inaccurate Test of predictions using the scientific method Prediction refuted Prediction confirmed Figure 2. 2 Illustration of the relationship between theory and research (Adopted from Christensen, Experimental methodology, 2004, p. 23) According to Christensen (2004) and following figure 2. , theory is originally based on empirical observations gathered by using scientific methods. Once the theory has been generated it must lead to the future research. The result of the research feeds back and defines the usefulness of the theory. Prediction of the theory means that it is useful in accounting for a phenomenon. In case that the 11 prediction is refuted it leads to an inaccurate theory which must be revised or even thrown out for the experimental data. The discussion above shows us that theory generation is an important part of the scientific work.
It integrates and summarizes scientific facts, which allow us to find a more appropriate explanation of a given phenomenon. Last but not least the theory suggests studies that otherwise might not be considered or even be overlooked (Christensen, 2004). 12 3. Theoretical Framework This chapter presents relevant theories, which are used as a framework for the thesis. The theories are later used to analyze the empirical data. The chapter will end with a short summary. 3. 1. Marketing Marketing is everywhere. It is embedded in everything we do from the clothes we wear, to the web sites we click on, to the ads we see.
It profoundly affects our day-to-day lives. Marketing is also important for every company, because financial success often depends on marketing ability (Kotier & Kelier, 2009). 3. 1. 1. Definition of marketing Marketing is about identifying and meeting human and social needs. Kotier & Kelier (2009, p. 44) state that “one of the shortest good definitions of marketing is meeting need profitably” and that “[t]he purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit (Kotier & Kelier, 2009, p. 139). ”
While Pierre and Barakat (2000, p. 3) state that marketing guides the entire organization, they further define it as “the business function that identifies customer needs and wants, determines which target markets the organization can serve best, and designs appropriate products, services, and programs to serve these markets. ” 13 3. 1. 2. Marketing mix- Ps and Cs We usually look at the marketing mix using the four Ps strategy (product, price, place, promotion), or the full seven Ps strategy with a three further factors (people, processes, physical evidence).
However, Ace (2001) states that we should view the marketing mix both from the four Ps and four Cs perspectives (see fig. 3. 1). Product, price, place and promotion look at the marketing from the point of view of the goods’ producer. While choice, cost, convenience and communication (four Cs) deal with the same issue as its corresponding four Ps, but from the customer’s point of view. Producer focus Product Seen by producer as planned product mix Customer focus Choice Customer see range of goods to make choice Price Producer consider all Elements of price mix
Cost Customer see aspects of cost that they have to bear Place Distribution channel and distributive outlets Convenience Customer prefer goods that are easily available Promotion Producer seek to promote their products to audience Communication Customer seek communication rather than persuasion Figure 3. 1 Marketing mix (source: adopted from Ace, 2001, p. 5) From fig. 3. 1, we can see that marketing deals with more than developing a good product, pricing it attractively, and make it accessible to customers. Marketer must also communicate with customers.
We will explore the marketing communication in the next part. 14 3. 2. Marketing communication As a part of the marketing mix-communication plays an important role. Just as Shimp (2003, p. 3) says: “Marketing communication is a critical aspect of company’s overall marketing mission and a major determinant of its success. ” 3. 2. 1. Marketing communication definition Marketing communication refers to “the communications between a company and its customers which highlight the benefits and unique differences of a particular brand with purchase intention” (Westberg, 2004, p. 17). Schultz, et al. 1994) suggested that in the current environment, communication is so critical to the marketing effort that it is inseparable from marketing itself. Marketing communication is different from promotion. Because marketing promotion points of just highlighting the good bits. While marketing communication implies two-way process, where customers have the chance to listen to what the marker has to say and also to talk back (Ace, 2001). 3. 2. 2. The objective of marketing communication Marketing communications objectives are derived from an organization’s overall marketing objective.
So the objectives are viewed in different ways, but tend to have similar characteristic (Westberg, 2004). Several researches have revealed that the objectives are related to creating a certain brand image and stimulate purchase intention (Shimp, 2003; Rossiter & Pecy, 1998). Kotier and Kelier (2009) have studied how marketing communication achieves these objectives. With the marketing communication, marketers can tell or show how and why a product is used, by what kind of person, and where and when. They can also link their brand to other people, place, event, brand, experience, feeling, and thing.
Meanwhile, the consumer can learn about who makes the 15 product and what the company and brand stands for. After that the consumer establishes the brand in his memory and creates a brand image, followed by intention to buy the product. Therefore, the role of marketing communication is to move the customer along a hierarchy of effects including awareness, knowledge, preference, conviction and ultimately the purchase of product (Belch, 1998). 3. 2. 3. CRM is one form of marketing communication Kotier and Kelier (2009, p. 512) state that“the marketing communication mix consists of eight major modes of communication.
These are advertising, events and experiences, pubic relation, direct marketing, interactive marketing, and sale promotion. ” Westberg (2004) states that cause-related marketing is a unique marketing communication strategy, which is differing from sale promotion. Bronn and Vrioni (2001, p. 214) suggested that this is a “practice of advocating corporate social responsibility in marketing communication activities. ” So in the next parts of this chapter, cause related marketing and its relationship with consumer behaviour will be discussed. 3. 3. Cause-related marketing 3. . 1. Definition of Cause Related Marketing. According to the definition of Varadarajan and Menon (1988, p. 60 cited in Gupta & Pirsch, 2006) 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 that satisfy organizational and individual objectives. Since its development cause-related marketing strategy has had a significant impact on businesses, organizations and consumers.
Multinational enterprises 16 agree that CRM campaigns influence their profitability (Peters, et al. , 2006). In the face of disappearing diversity in the product price and promotion possibilities, saturated markets and shorter product lifecycle, companies strive to revitalize their brands by attaching it to ethical causes. It helps them to differentiate among the competitors and to strengthen their brand positioning (Meffert & Holzberg, 2009). Berglind and Nakata (2005) see the CRM project not as a general “feel-good” r consciousness raising exercises, but rather as resource generating attempts for specific concerns. Further, the authors point out that one should distinguish between cause-related marketing and social marketing. The first one is enhancing a market position of a business, while the second pulls the attention to the social ill, without any promotion or advertisement. 3. 3. 2. Stages of Development CRM is one of the fastest growing marketing forms (Berglind et al. , 2005). CRM expenditures reach a year grow rate of 5. 5% in 2008 amounting $1. 2 billion (Cause Marketing Forum, 2009). In the recent situation with volatile markets and hyper-competition cause marketing meets the requirements of the management and produces tangible benefits for the firm in a tandem with social improvement (Berglind et al. , 2005). Following the development process in the USA, Meffert and Holzberg (2009) give an overview of how in every stage in the cause-related marketing campaign different aims define every phase (see table 3. 1). During each phase there is a time horizon planned with the appropriate sphere of competence and fixed objects.
The objectives vary from a simple sales promotion up to integrating the CRM strategy as a part of a CSR. ? ? ? 17 Table 3. 1: Development stages of CRM (Meffert et al. , 2009, p. 48) Sale Phase Customer Loyalty Phase Branding Phase Social Responsibility Phase – CRM as an integral part of CSR – Relationship with stakeholder groups (society, customers, employees) Long term – Management in relationship with CSR Scope -Sales promotion – Fundraising – Customer tie – Cause as a part of a brand identity – Image set up toward customer and employee Long term – Strategic marketing branding
Time Sphere of competence Short term – Sales – Marketing Middle till long term – Marketing – CRM 3. 3. 3. Main requirement and cause ties Unlike simple promotion cause related marketing tries to ensure that the brand and the cause play in the same “territory” in a living, altruistic partnership for mutual benefit (King, 2001). That is why there should be conditions of success identified between the cooperating partners like the company and the non profit organization (see figure 3. 2). In this way it is guaranteed that consumers perceive the message in the way it is wished.
The win-win-win situation is a premise for reliable charity engagement from a company side as well as to stand out from the competitors. At this point a fit between the community and the cause (cause-fit), between company, NPO and consumer (brand- fit) and profit organization and non-profit side (partner-fit) plays a huge role (Meffert, et al. , 2009). 18 company Partner-fit -Partner selection -Communication -Confidence Cause-fit and brand-fit -Cause selection -Definition of the donation amount -Credible communication -Transparency Non-profit organization consumer
Figure 3. 2 Main requirements and cause ties (Meffert et al, 2009, p. 51) Jerry Welsh (cited in King 2001) expresses the concern that some cause related marketing strategies do not give consumers a good reason to remember the company or the brand at the end of the day. In the end, it is supposed to be marketing not philanthropy. So it is not enough to justify only the cause-fit; it should be accompanied by well managed brand-fit. Consumers have to be convinced in the credibility of the campaign on the base of well developed ties between the different fits. 3. 3. 4.
Types of CRM According to Stole (2006) cause related marketing strategies appear in six broad headings. These are advertising (where a business aligns itself with a particular cause and uses its advertising to communicate the cause’s message), public relations (attracting press and public attention to a strategic partnership between a business and a non-for profit group), sponsorship (corporate sponsorship of a particular program or event), licensing (the corporation pays for the license to use a charity logo on its products or service), and direct marketing (both business and 19 on-profit raise funds and promote brand awareness) which count to the standard corporate practices. The last two forms are facilitated giving and purchased triggered donations. In a facilitated giving company supports customer donations to the charity. The most widely used practice is purchase-triggered donations; in this practice the company spends a percentage of sales to a charitable cause or organization (Stole, 2006). 3. 3. 5. Benefits and risks of CRM Causes with a non-controversial nature are proven to have a greater success than ones with a controversial nature.
A controversial nature cause may even harm the company’s image. However, proponents and practitioners agree that cause-related marketing campaigns are very useful. The amount of money directed in such strategy proves this as well. Berglind and Nakata (2005) describe reasons for engaging in CRM. They start with that it helps the bottom line, as its primary scope is the financial benefit. Further on it builds the brand and enhances the corporate reputation. Selecting the right cause and associating the company with it, help to improve the company’s image and translate it into brand memorability by the customers.
Other benefits from the CRM strategy are generating goodwill and improving of the employees’ morale and retention. In times of crisis, goodwill may be crucial by preventing long term damages to the company, whereas employees’ morale improvements are important in the human-resource building facet. Other parties which benefit from CRM are the NPOs. CRM increases their fundraising, as their primary reason for getting into such kind of relationship with a profit organization is that it heightens their exposures and message efficacy. 20 All these features supporting a good CRM strategy can turn around and lead to the opposite effect.
Weak links between company and a cause can be harmful. It could happen that consumer perceives the whole as a “cashing in” on other people’s misfortune. Short term promotions are not good for supporting the fit between the brand and the cause for consumers and this fails to build the brand in the desired way (King, 2001). 3. 3. 6. Objective of CRM-brand purchase intention Westberg (2004) states that a company established CRM strategy with the aim of fulfilling several objectives related to corporate strategy, marketing strategy or individual product strategy.
These objectives vary but tend to have the similar final objective brand purchase intention. File and Prince (1998) found that more than half of the companies participating in CRM were seeking to improve brand purchase intention. Yoo et al. (2000, p. 195) define the brand purchase intention as “the tendency to purchase the brand routinely in the future and resist switching to other brand. ” This tendency is the consumer’s self-instruction to purchase the brand (or take other relevant purchase-related action). It is an anticipated, conscious planning of the action step, which is the final uyer response step (Rossiter & Percy, 1998). There are two factors contributing to the brand purchase intention to be a critical objective of CRM. The first factor is that purchase intention is the best predictor of a consumer’s purchase behaviour (Westberg, 2004). Robert, et al. , (2003) said that the customers are more willing to buy and very often make a subsequent purchase when they have strong purchase intention. In other word, there are some relationship between the purchase intention and actual purchase behaviour.
This relationship is empirically tested in hospitality and tourism businesses (Buttle & Bok, 1996; Ajzen & Driver, 1992). The second factor is that now more and more 21 consumers are brands conscious all over the world (Morton, 2002; Bryck, 2003). With the diversity of the product, consumers cannot compare the entire products with other products carefully. To reduce the perceived risk of purchase, they attempt to buy well known brand. What’s more, they seek additional information and repeat the purchase of the brand which has provided satisfaction (Roselius, 1971). . 4. Consumer analysis Ace (2001, p. 4) says that “the process of a marketing communication (promotion) takes consumers through three stages of response: perception, attitude and behaviour stages. ” So we choose three elements, perception, attitude and behaviour for consumer analysis. According to Blythe (2008), perception and attitude refer to psychological responses, and behaviour refers to the physical response. These three elements can be represented by three steps: Knowledge? Attitude? Action. We will describe the three elements more detailed below. 3. 4. 1.
Perception Kotler (2005) states that the process of perception formation passes through four steps: in the first step, consumer receives information from outside; in the second step, he/she selects the information; in the third step information is organized and in the last step the information is interpret. Perception is regarded as the keystone of building knowledge, not just about products but about everything else in the world. People have their own perception of products and everything else. The way people select and interpret products will be very different from the way someone else selects and interprets them.
The overall perception is complex to analyze; it involves combining many different sensory inputs. Apart from the basic five (touch, taste, smell, sight, hearing) there are senses of direction, sense of balance and a clear knowledge of 22 which way is down, and so forth. Each sense provides information to the brain constantly where it is collected and after that selected and cut out form the extraneous noise by the brain (Blythe, 2008). When the individual constructs a perception, he or she assembles information to map what is happening in the outside world. This mapping will be affected by the following factors (Blythe, 2008, p. 93): ?
Subjectivity: This is the existing world view within the individual, and it is unique to that individual. For example, the information is subjective in that the consumer will base decisions on the selected information. Each of us selects differently from environment and each of us has differing views. ? Categorization: This is the “pigeonholing” of information, and the prejudging of events and products. ? Selectivity: This is the degree to which the brain is selecting from the environment. It is a function of how much is going on around the individual, and also of how selective (concentrated) the individual is on the current task.
It will depend on the individual’s interest and motivation regarding the subject area. ? Expectations: It leads individuals to interpret information in a specific way later. ? Past experience: Sometimes sights, smells or sounds from our past will trigger appropriate response. If the consumer has had bad experiences of purchasing products, this might lead to a general perception that these products are of poor quality. 3. 4. 2. Attitude Bohner and Wanke (2002) define an attitude as a summary evaluation of an object of thought. An attitude object can be anything a person discriminates or holds in 3 mind. They claim that attitudes are probably the most distinctive and indispensable concept in contemporary social psychology. Further on the authors describe the importance of the attitude from three levels. At the individual level, attitudes influence perception, thinking, other attitudes and behaviours. At the interpersonal level, information about attitudes is routinely requested and communicated. At the societal level, attitudes toward one’s own groups and other groups are at the core of intergroup cooperation and conflict.
In sum, attitudes are most relevant for everybody’s daily life, as they shape the social world for individuals, groups and societies at large (Bohner & Wanke, 2002). Generally, attitude is formed by three elements: affect, cognition, and conation. The three elements are interrelated in a complex way (Blythe, 2008). In the cognition stage, consumers are learning about the product which they think might interest. In this stage consumers are trying out the product. In the affect stage, consumers are falling in love with the product. In fact, forming an attitude about a product might start with any f the three components, with the others coming into play afterwards (Blythe, 2008). Bohner and Wanke (2002) state the consequences of attitudes affect an individual in various ways. Attitudes may influence the individual’s attention to attitude objects, the use of categories for encoding information and the interpretation, judgment and recall of attitude relevant information. Attitude may guide attention and encoding automatically, even if the individual is pursuing unrelated goals. Attitude may affect the individual’s perception, judgment and behaviour. 3. 4. 3. Consumer behaviour Peter and Olson (2005, p. ) define consumer behavior as something that “… involves the thoughts and feelings people experience and the actions they perform 24 in consumption processes. It includes comments from other consumers, advertisements, price information, packaging, product appearance”. Since the definition of consumer is too broad, we narrowed down the extent of consumer in this article. In this article, we are interested in exploring the end consumer. The term “the end consumer” can be described as the end user, an individual who purchases products or services at marketplace for his/her own use. 3. 4. 3. 1.
Type of consumer According to Ugala ((2001) cited in Ukpebor & Ipogah, 2008) there are two types of consumer behaviour. The first type is defined as cognitive behaviour. Here the consumers have a more logical and rational behaviour when purchasing a product. The second type is defined as experience-oriented consumer behaviour. This type of consumers has more emotional behaviour when it comes to purchase a product. Dalqvist and Linde ((2002) cited in Ukpebor & Ipogah, 2008) state that there are four types of consumer: • Rational consumer: this kind of consumer gathers information before acquiring a product.
After that he/she assesses this information and gets a perception toward the product. Further, an attitude toward the product will be established and finally a decision to buy or not the product will be made. • Unconscious consumer: the unconscious consumer had established an attitude towards the product or company at the beginning . The attitude of the consumers is affected by their emotions, feelings or past experience. This attitude will lead the consumers to seek for more information about the product or the company and learn more about it and finally make their purchase decision. 25 •
Learned consumer: this type of consumers usually makes purchase decision by their habits. The product is bought by habit and after that information about it is gathered. At the end an attitude toward the product is established. • Social consumer: the social consumers will consider the social environment issues when they choose to purchase products. Issues such as status, lifestyle and believes will influence the decision of what product they buy. 3. 4. 3. 2. Buying process Consumer buying behaviour is a complicated process, since there are many internal and external factors affecting it.
Soderlund ((2001) cited in Ukpebor & Ipogah, 2008) states that to examine consumer buying behaviour consumer’s attitude, intention and preference need to be explored. According to Blackwell, et al. (2006 cited in Blythe, 2008, p. 261), there are seven stages of consumers buying behaviour (see fig. 3. 3). Divestment Post-consumption evaluation Consumption of the product Final choice is made and product is purchased Pre-purchase: evaluation of alternatives Information is sought: search of memory and external source Need is recognized Figure 3. 3 Decision- making process. (Source: Blackwell, et al. 2006 cited in Blythe, 2008, p. 261) 26 From the figure above, it is clear that consumers pass through seven stages in their buying process. According to Blythe (2008), it’s impossible for consumers pass through each stage in their daily purchase. To some extent, it depends on what type of consumer you are and what type of product you want to buy. While an acquisition of expensive products such as buy car or house one might pass through all stages. The buying process starts with need recognition, where the buyer recognizes the need. Maslow (1954 cited in Blythe, 2008) has given the hierarchy needs for consumer behaviour.
He shows that people are motivated to fulfil different needs in a specific order (see figure 3. 3), beginning with survival needs “as the most pressing needs to satisfy” and ending with self-actualization needs (“the need to fulfil a long-held ambition, or to act independently of the pressures and opinions of other people, or to act for action’s sake”) (Blythe, 2008, p. 36). self actualization aesthetic needs cognitive needs esteem needs belonging needs security needs survival needs Figure 3. 4: Maslow’s hierarchy of needs (source: Blythe, 2008, p. 36)
Having recognized the need, the consumer will undertake a series of information search before to purchase a product. The information search comes from two sources: an internal search from memory and an external search from outside sources. Sources of information might be marketer-dominated (advertising, 27 brochures, TV shows, websites, retail displays and so forth) or non-marketer dominated (friends, family, government, consumer organizations and so forth) (Blythe, 2008, p. 263). In fact, the consumers will pay more attention to those alternatives connected with their needs.
They usually evaluate all the alternatives available to them to achieve their self-actualization and which of them might be best for fulfilling the need (Blythe, 2008, p. 260). Having gone through the procedures of collecting information, whether by a lengthy search or by simply remembering all the necessary facts; the consumer will make a purchase decision choice or not, based on the collected information. (Blythe, 2008, p. 270) In the consumption step, the consumers use the product for purpose of fulfilling the need and compare actual benefits from use with the expected benefits in the pre-purchase.
After consuming the product, the buyer will be satisfied or dissatisfied and will be engaged in post purchase behaviour. The satisfaction or dissatisfaction of the purchase of a particular product depends on the relationship between the purchaser expectation and his disappointment. If the product meets the expectations, the consumer can get satisfied. And if it exceeds he/she is delighted (Gilly & Gelb, 1982). In the last step of divestment, the consumers disposing of the product or its packaging or any residue left from consuming the product (Blythe, 2008, p. 260). 28 3. 5.
Summary The first theory covered in this chapter was the general notion of marketing as well as marketing communication. Cause-related marketing is regarded as one unique form of marketing communication. It can be used in marketing towards consumers. The intention with these parts is, first of all, to give the reader a basic understanding of the concept CRM. Further, with the aim to analyse consumers’ response to CRM, some theories related to consumer behaviour were added and explained. We focused on three elements: perception, attitude, and behaviour. Perception is the keystone that builds consumer knowledge.
It is the first step when consumer starts to learn related information toward the product or everything else in the world. The perception leads to the formation of consumer attitude toward the product and at the end, the attitude affects consumer’s behaviour. Based on the outcome of the literature review, we can draw a conceptual model for our research, which is presented in figure 3. 5 Perception Knowledge or awareness stage: “ know it exist or not” Cause related marketing Brand purchase Intention purchase the brand routinely and resist to switch to other brand Figure 3. Conceptual model CRM Strategy (based on Ace, 2001, p. 8) objective 29 Attitude Linking or believe stage: “believe it and like it or not” Behaviour Behavioural tendency stage: “decide to buy it or not” CRM strategy is one form of marketing communication. The process of a marketing communication takes consumers through three stages of response: perception, attitude and behaviour. We assume that CRM follows this pattern. The first stage is knowledge or awareness stage. Consumers meet with a lot of advertisements every day, but they cannot remember all of them, even though some they had met several times.
The important point that marketer should do is to attract consumers, in the way that consumers know that the product exists. This is also called formation of perception. The second stage is linking or beliefs stage. Due to the positive perception established in the mind of consumes, they will believe it and like it. It is called formation of attitude. The last stage is behavioural tendency stage. We think that the relationship between attitude and behaviour is a complex one. Sometimes, some consumers have a positive attitude, but they still do not buy the product, because they are rational consumers.
They acquire products which they need and not the best one. However, if consumers have a negative attitude toward the product, they will absolutely not buy it. So, we believe that the attitude will affect behaviour to some extent. After consumers have finished the buying process, they face a post purchase behaviour phase. In this phase brand purchase intention could be created and this is an objective of CRM. 30 4. Empirical method In this chapter we discuss the empirical method by introducing the research strategy as well as the time horizon, data collection and population, sample selection.
Operationalisation, reliability, validity, and generalisability are defined and discussed. At the end there is a short presentation of the questionnaire. 4. 1. Research strategy According to Saunders et al. (2009, p. 602) “a research strategy can be divided into seven different categories: experiment, survey, case study, action research, grounded theory, ethnography and archival research. ” Saunders et al. (2009) state that the survey is usually associated with the deductive approach, which is popular as it allows the collection of amount of data from sizable population in a highly economical way.
What’s more, survey is used to collect qualitative data and allows the researcher to explore relations and connections between the investigated variables, and then the researcher can set up new models and draw conclusions for a whole population. Considering the advantages of a survey and the limits of finance and time, the empirical material for this dissertation has been collected through a survey. The survey was designed as a questionnaire with fourteen close-ended questions. Before drawing the questions, the questionnaire started with the description Case of McDonalds Children Charity, and the definition of CRM.
In this way the respondents can better understand the CRM and we can obtain their real perception and attitude toward the CRM, as well as their buying behaviour. Having considered the restraints in the empirical research, especially the limited time, we used a mixed method mail and online survey. First the questionnaire was 31 designed on a webpage, so the data can automatically enter and be saved to a computer file at the time of collection, which saved us a lot of time. Further, we took additional actions to collect as many answers as possible. We send the link with our questionnaire to international students and Chinese students by email.
We were afraid that the Chinese students will feel bored to read the “Case of McDonalds Children Charity”, so we gave a brief introduction about “Case of McDonalds Children Charity” and the definition of CRM in Chinese language in the email. Few hours later, we received some emails to check if the web address contains Computer Viruses, so we decided to send the email again to every potential respondent and assure them that it is save. 4. 2. Time horizon Time horizon can appear in two dimensions, cross-sectional studies and longitudinal studies. “Cross-sectional study can be recognised s a snapshot, which is the study of particular phenomenon (or phenomena) at a particular time” (Saunders et al. , 2009, p. 155). On the other hand, “longitudinal study can be recognized as a diary, which is the study of a particular phenomenon (or phenomena) over an extended period of time (Saunders et al. , 2007, p. 594). ” The main strength of longitudinal research is the capability that is has to study change and development. The usage of the two depends on the research question. This research fits the cross-sectional time horizon criteria as we study particular phenomena at a particular time.
We conduct a survey, and seek to explore consumers’ response toward CRM strategy deeper and check how the factors such as gender, nationality and education impact their response. This is, therefore, a cross-sectional time horizon. 4. 3. Data collection Generally, there are two methods for data collection consisting of qualitative and 32 quantitative methods. Hollensen and Svend (2007) describe that a qualitative research provides a holistic view of a research problem by integrating a larger number of variables, but asking only a few respondents.
Quantitative research data analysis is based on questionnaires from a large group of respondents. The difference between these two methods is apparent. First, the qualitative method deals with description analysis and the quantitative method deals with numbers analysis. Second, the qualitative data can be observed but not measured and the quantitative data can be measured. Third, the qualitative method needs to be analyzed in a combination with its context, so it is more complex (Richards, 2005). Since this thesis is using the method of questionnaire, the research of this thesis consists of quantitative data.
In order to generalise how a group of students think about companies engaged in CRM campaigns, it is important to get a relatively large sample of responses, making quantitative methods more suitable for our thesis. Moreover, in this thesis, with the aim to explore the research question, we will use both primary and secondary data collection. According to Hollensen and Svend (2007, p. 98), primary data can be defined as “information that is collected first-hand, generated by original research tailor-made to answer specific current research questions”.
And secondary data can be defined as “information that has already been collected for other purposes and thus is readily available”. Since the thesis uses the method of questionnaire, it belongs to primary data collection. And this research will be analysed based on previous research, so it also uses secondary data collection. 4. 4. Population For the purposes of this study we decided to distribute our questionnaire among students from different nations and with different background. The respondents were between 20-25 years old and were enrolled in different school programs.
The 33 individuals were not picked according to any special definitions or requirements. To obtain the requirements of this research it was important to have as many respondents as possible. 4. 5. Sample selection We did a quantitative study that intended to make generalisations about a population. However, to include every individual of the population in a study is close to impossible. Further, it should not be assumed that a census would necessarily provide more useful results than collecting data from a sample which represents the entire population.
Thus, the sample selection is a very important step in the research process, when time is a constraint and the results from the collected data are needed quickly (Saunders et al. , 2009). Normally, the sampling techniques available to the researchers can be divided into two types: probability or representative sampling, non-probability or judgmental sampling. Saunders et al. , (2009) state that probability sampling is also known as random sampling and is most commonly associated with survey-based research strategies.
There are inferences made from the sample about a population to answer the research questions or to meet the objectives. According to Saunders et al. , (2009, p. 213), “for non-probability sampling, it is impossible to answer research questions or to address objectives that require statistical inferences about the characteristics of the population. ” It is a type of stratified sample, sometimes referred to as “judgment or purposive sampling” or expert choice (Saunders et al. , 2009, p. 233). Thus, the sampling technique in this thesis should be non-probability sampling.
Due to time and resource restraints in this thesis, a convenience sample of a specific population of student in Hogskolan Kristianstad was used. In order to be able to generalize the result of this study, we decided that the sample size should 34 contain over 120 respondents and we collected answers from 150 respondents. 4. 6. Operationalisation Operationalisation is defined as “[t]he process of strictly defining variables into measurable factors1. ” In order to avoid fuzzy concept and be able to set down exact definitions of each variables in complex contexts operationalisation is indispensable.
In this matter we used a pilot test to investigate whether the questions are able to be administrated in a real environment by respondents. Six respondents have been asked to complete the questionnaire to identify problems with the questions and to assess respondent understanding of question meaning and the question clarity. With the expectation of high validity, respondents were interviewed regarding the ease of understanding the case, the ease of understanding the instructions to how to respond to each question, the ease of understanding of each question. In this way, some flaws in the questionnaire were discovered and corrected.
Following the pilot test, the questionnaire was sent out to examine how a cause-related marketing strategy shapes consumer perception, attitude and behaviour. A questionnaire was constructed including three dependent variables and two control variables. The control variables in the questionnaire are: • Background of respondent: In question one to four gender, age, nationality and buying habits are asked. • Cause-related marketing strategy The dependent variables in the questionnaire are: • Perception formation of the strategy: In question five and six respondents are asked about their previous knowledge about CRM and their Timurs Umans, Operationalisation, 26 October 2009 35 interpretation of it. The respondents were given five possible answers from very egoistic to very altruistic. • Attitude to the strategy: Questions seven to ten are designated to see to what extend respondents show involvement in this kind of marketing communication. Here we tried to find out if duration of the campaign, price increase and social involvement of the company are developing a positive attitude toward CRM. Behaviour or purchase intention: The last four questions (Q11, Q12, Q13, and Q14) try to figure out if the respondents show an involvement in buying cause-related products, while asking them for purchasing habits and brand preference in comparison to other similar companies. Here as well as in the attitude questions a Likert-style rating scale on a five –point rating scale is used. The control variables will be proved for influence and for connections between them and the dependent variables (fig 4. 1).
We hope to find out that the consumer establishes a perception of CRM caused by our present case (McDonalds Children Charity). Which then leads to a positive attitude toward the CRM and as a last step makes a buying decision and establishes brand purchase intention. As we developed our own theory in the theoretical part, we are preparing to look at our theory according to our statistic analysis. Control Variables Cause Related Marketing Background of Consumer Dependent Variables Perception formation of CRM Attitude toward CRM Behaviour and brand purchase intention ????????????????????????????????????????????????????????????????????????????? ???? 36 4. 7. Reliability Saunders et al. (2009, p. 156) refer to reliability as “[t]he extent to which your data collection techniques or analysis procedures will yield consistent findings. ” Reliability is mostly used in quantitative research since the investigator is interested in whether the measurement is stabile or not. When looking at the reliability of the research, the main problem is whether the participants would reveal the real behaviour in their answers to the questionnaire.
This problem appears with questions that can be misunderstood by the participants. The participants could also change their opinions after some time and having different one from the opinions expressed in the questionnaire. Here some given answers will not reflect reality. Moreover, possible bias exists. It is possible that while conducting the questionnaire, students as respondents may create a bias with their previous purchase habit, although we tried to ask the questions in neutral way. Due to limited time we were unable to repeat the survey on different participants.
The stability of this research is estimated as rather low. It implies that some of the respondents would have changed the answers if the research would have been performed once again. So, the reliability of our tests is rather low. 4. 8. Validity Saunders et al. (2009, p. 157) sates that “validity is concerned with whether the findings are really about what they appear to be about. ” Saunders et al. (2009, p. 603) describe the validity of a research project as followers: “(1) the extent to which data collection method or methods accurately measure what they were intended to measure. 2) The extent to which research findings are really about what they profess to be about. ” 37 When a quantitative research results in a measured value that corresponds with the real value, then the research is considered to be completely valid. The validity of the questionnaire could be threatened by the fact that we might have had an influence on the interpretation of respondents’ observations. However, we tried to keep the validity of the questionnaire at a very high standard. To avoid misinterpretation, the questionnaire was done in English, a familiar language for the participants.
Further, we presented a case and introduced CRM. Simple words and explanations were used to facilitate the respondents. Hence, the questions are better formulated and more easily understood by the respondents. To ensure that the validity is as high as possible, a lot of time has been spent on constructing and reviewing the questions used. We carefully designed each question, made the layout of the questionnaire clear and explained the purpose of the survey in good way to the respondents. Second, as mentioned before, a pilot test was done, where six respondents were asked to complete the questionnaire while being observed by us.
In that way some uncertainties in the questionnaire were discovered and corrected. 4. 9. Generalisability Saunders et al. (2009) refer to generalisability as external validity. It is a concern about the design of the research and the extent to which the research results are generalisable, meaning if the findings may be equally applicable to other research settings or not. Due to our decision to focus on students, and this group only represents a small part of the population, the results would only be generalisable, if at all, to students. 38 4. 10. The Questionnaire
Normally, a questionnaire contains factual questions and matter of opinion questions. According to Trost and Hultaker ((2007) cited in Johnsson and Lennbro, 2008), questions are related to actual situations for the participant and matter of opinion questions are related to the attitude of the participant. The factual questions can consist of demographical questions. In our questionnaire, we had four factual questions about gender, nationality, and education program as well as consumer type. A questionnaire can have open questions and closed questions.
Open questions give the respondent the possibility for an answer in his/ her own words. On the opposite, closed questions have already existing answer-alternatives within the questionnaire. The advantage of closed questions is convenience for respondents to answer (Saunders et al. , 2009). In our questionnaire we only used closed questions. Saunders et al. , (2003) state that regarding questionnaires, one of the important advantages is that the data obtained is standardised, which makes easy comparisons possible.
A limitation is that there is a limit of how many questions that can be demanded from the respondents to answer. According to Malhotra and Birks (2000), there are three major ways to administer a questionnaire: by telephone, in person and by mail. A mail surveys can be done through three ways: ordinary mail, electronic mail and the mail panel. We used a mail survey for our thesis, since our questionnaire has been designed on a webpage. A link to the questionnaire was obtained and we sent in electronic mails to the respondents.
The main reason for us choosing internet questionnaire was the limitation of time and resources. This method enables fast replies and the 39 collection of the data in the computer, which is easily transferable for statistical analysis. Besides, this survey also means that we choose self-administered questionnaires instead of interviewer-administered questionnaires. The advantage of self-administered questionnaires is the limited influence. Since we don’t meet face to face with the respondents, we will not affect their answers. Moreover, the use of self-administered uestionnaires can provide more truthful answers because respondents can answer the question in the way they feel it, since the questions are not to be answered in the way to please the researchers. Our questionnaire consisted of 14 questions. In Q1 to Q4 the respondents’ gender, nationally, program and purchase habit were asked. These questions are types of category questions, where the respondent can only choose one response from some given alternatives (Saunders et al. , 2009). For example, in the first question, the alternatives are female or male. The next questions in the questionnaire are then divided into three parts.
The first section deals with perception. Q5 was designed to investigate the respondents’ previous experience of CRM strategy. If the respondent’s answer is yes, I know it already; we will think that the respondent has established a perception. If the respondent answers with no, a further question is desired. Q6 was designed as a five-point rating scale question. Our intention was to interpret the perception of consumer about CRM. If the respondent answers with higher than three, it will mean that the respondent has positive perception about CRM and if it is less than three there is no positive perception.
The second section deals with the attitude toward CRM strategy. Q7 was designed to reveal the consumer’s attitude towards the campaign. We examined what type of consumer is sensitive to the campaign. Q8 to Q10 are also five-point rating scale questions, where Q8 measures the respondent’s attitude towards the cause, 40 Q9 respondents’ attitude to price change and Q10 respondent’s attitude towards the company The third section handles the consumer’s behaviour. These also are five-point rating scale questions (Q11 to Q14).
This section is divided into two parts: actual behaviour and brand purchase intention. Q11 and Q13 were designed to give direct implications on brand purchase intention, while Q12 and Q14 were designed to reveal the respondent actual behaviour. The frame of the questionnaire used in the data collection, can be seen in appendix A. However, the design is not accurate, since the original questionnaire was published on the webpage. 41 5. Analysis This chapter aims to present the analysis of our research and show the most relevant conclusions during the research process.
The biggest part of the analysis is supported by the statistical SPSS program and conclusions are drawn relying on the results generated by it. 5. 1. Introduction and descriptive statistics For the purpose of our study we used an online questionnaire with 14 questions. The questionnaire was sent to 315 persons with a response rate of 48 percent. 84 of the respondents were female and 64 male. The questionnaire included 14 questions where the first four were respondents’ background questions (gender, nationality, program enrolled in and buying decision process).
The other questions were designed for the deeper understanding of CRM perception, attitude and buying decision. This chapter consists of a brief overview of the answers we received. Looking at their nationality most of the respondents are of Chinese origin, followed by nationalities from Western Europe. Further the figures show that most of the respondents are enrolled in the business education programs. The second largest group of respondents study computer science. 42 ??????????????????????????????????????????????????????
Our respondents’ consumer types are mostly dominated by the collection of information before acquiring a product. 41 of the respondents buy a product out of habit. A small group of respondents is where the decision is influenced by others. Almost all of the respondents are familiar with CRM campaigns and have already heard about such marketing strategies. Regarding the interpretation of this marketing activity the respondents expressed the “not sure” opinion about the campaign, while considering that it is better if the company participating in such program should support the charity for longer time.
The relations of the money spent on the campaign and the price regarded for the product is considered as not so relevant to our respondents. On the other hand they think that the money spent for the charity is not enough. Almost 70 percent of the respondents agree that the companies engaged in CRM activities are socially responsible. Most of the respondents who answered the questionnaire do not search actively for products related to a cause and will not extra buy a product because of a charity campaign. However they will develop a high regard toward the company 43 upporting the charity. Below the result of survey will be analyzed in detail. To better understand the analysis, charts, plots and tables from the SPSS program will be used to visualize the respondent’s answer and our result. In this research, valid refers to the amount of respondents that have answered the question, missing refers to the quantity of respondents that have not answered the question. The mean (M) refers to the average of all the collected respondents. Std. Deviation (SD) refers to the positive square root of the variance. 5. 2.
Background questions The questionnaire starts with four questions where we want to find out how many male versus female respondents have taken part in our research, where they come from, in which education program they are enrolled and what type of consumer they are. 5. 2. 1. Gender There are plenty of researches who examine the CRM effect on consumers` attitude and intentions toward the brand and the company. Ross et al. (1992, cited in Hou, Du & Li 2008) found that the CRM campaigns have a stronger positive impact on perception of the campaign for the women than the men.
Further researchers (Kropp et al. , 1999, cited in Westberg, 2004) suggest that women will have a more favourable attitude toward CRM strategies than men, but this study was not approved because the findings were not statistically significant. Another study conducted by Chaney and Dolli (2001, cited in Westberg, 2004) figured out that there are no significant evidences for attitude differences based on gender, however, there have been some indications of women being less sceptical toward CRM than men. In 1999 Berger et al. cited in Westberg, 2004) discovered that in print advertisements of CRM claims that women have a more positive attitude. 44 Even though that the previous studies on gender impact on CRM are considered by some researches as not so compulsive, a survey provided by the American Marketing Association (2007) claims that women are more likely to buy products connected to cause-related marketing. Further more, 40 percent of the surveyed women versus 30 percent of the men will buy a product or service if they know that a certain amount of money will be donated to a cause or campaign.
Vilela and Nelson (2006) claim in their study that gender differences in message responses disappear when values are taken into account. They also state that “request for donations to charity and product purchase trough CRM both represent situations where values become relevant for determining behaviour” (Vilela & Nelson, 2006, p. 3). In our own study we also found that the female respondents are slightly more favourable toward a cause-related marketing campaign than men do.
Considering interpretation of the charity, company and awareness toward the campaign female respondents showed a higher awareness than the male do. The figures in table 5. 1 support our findings. Table 5. 1: Gender awareness Gender awareness Male Female interpretation Male Female attitude to company Male Female mean 1,67 1,77 2,81 2,99 3,89 4,05 st. deviation 0,473 0,425 0,990 0,964 1,236 1,157 45 5. 2. 2. Nationality In total, 147 respondents (77 Asian and 70 European) completed the survey; three respondents are missing in the survey since they forgot to answer where they come from.
Among these respondents, there were 63 males (34 Chinese Mainland, 1 Chinese Hong Kong and 28 European), 1 male missing with missing nationality and 84 females (41 Chinese Mainland, 1 Korea and 42 European) and 2 female with missing nationality statement (see table 5. 2). Table 5. 2 Nationality Cumulative Frequency Valid Asian European Total Missing Total System 77 70 147 3 150 Percent 51. 3 46. 7 98. 0 2. 0 100. 0 Valid Percent 52. 4 47. 6 100. 0 Percent 52. 4 100. 0
Obviously, the socio-cultural and economic environments are different between Asia and Europe, so that it is worth to consider the differences and their potential influence in the perception of company social responsibility and cause-related marketing. For instance in Germany, companies are regarded as being corporate citizenships when they always comply with the law. This means that the company may donate funds for philanthropic purposes, as long as this does not breach the law (Broberg, 1996).
Thus, we imagine that respondents from Germany will have a positive perception toward the companies using a CRM strategy. In Scandinavia, where the countries are well-known to have high welfare standards, social responsibility is on the list of State duties. Thus, make us assume that the people who live in these countries have a strong sense of social responsibility and are more concerned about the company participating in CRM strategy (Broberg, 1996). 46 5. 2. 3.
Education program We believe that students participating different education programs have different backgrounds, hobbies and characteristics. Business students will more easily understand the notion of CRM and may be more sensitive to the price, while health science students will consider the products as healthy or not. According to us computer science students tend to logical inference thinking about a product. Further, we presume that these students are special consumers, with high level of educational

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