Cause-related marketing in international business: what works and what does not?

Abstract

Purpose

The purpose of this paper is to investigate the irrevocable role of cause-related marketing (CRM) and its research imperative, exploring its contemporary insights in and across international markets, toward scholarly and executive application.

Design/methodology/approach

This research is theoretical and it compiles and interrelates, in a multiperspective fashion, significant extant works in the field; focusing on how established and emergent variables and constructs can be leveraged, in order to develop insights into what does and does not work in international CRM.

Findings

Extant works on international CRM still present significant gaps pertaining to key questions. Furthermore, true understanding of CRM stems from comprehending consumers, both individually and collectively; and both their underlying and contextual motivators, factors and forces. This calls for a multiperspective and cross-disciplinary approach to CRM to that weaves in contextual (sociocultural, etc.) elements to the equation.

Research limitations/implications

Limitations naturally pertain to the research's theoretical nature that requires empirical testing.

Practical implications

CRM offers consumers both the means and the ends of acquiring their target core value benefits, additionally or peripherally to their core purchase purpose; potentially making the difference between business/brand success and failure.

Social implications

Through CRM, the contemporary consumer seeks product value benefits that transcend quality and functionality (etc.), to engulf abstract and intangible values pertaining to social, ethical, self-image and self-actualization factors.

Originality/value

The comprehensive review, contextual elucidations and cross-disciplinary perspectives of this paper originally present the scope, depth, complexity and gaps of the subject, and pave the way for the research that still needs to ensue.

Citation

Vrontis, D., Thrassou, A., Christofi, M., Shams, R. and Czinkota, M.R. (2020), "Cause-related marketing in international business: what works and what does not?", International Marketing Review, Vol. 37 No. 4, pp. 593-601. https://doi.org/10.1108/IMR-05-2019-0144

The irrevocable role of international cause-related marketing and its research imperative

Amid a fast changing business world, shaped by the technology-led socioeconomic (r)evolutions, organizations across the typological and geographic spectrums seek marketing strategies that can help them adapt to and compete within this new global market. One of the forces driving change is the rising new form of consumer who displays behaviors that are increasingly more socially conscious and ethical (Bonetto, 2015; Laroche, 2017). Consequently, and increasingly so, consumers are shifting toward (“soft”) product values of an increasingly abstract and intangible nature, without diminishing their diachronic demand for (“hard”) functional product quality (Thrassou, 2007). The former (“soft” values), thus, are becoming a key international competitive advantage, with organizations often capitalizing on this phenomenon through relevant strategies, such as corporate social responsibility (CSR) and their resulting “feel good factor”, whereby “ethical consumers” feel better about their purchase decisions and about themselves because of the ethical significance of their decision that contributes to any socioeconomic cause (Bonetto, 2015; Choi et al., 2016; Laroche, 2017). This phenomenon is not going unnoticed by corporations and their global brands, and leads to a purified notion of CSR, and heavy investment in, cause-related marketing (CRM) and relevant international campaigns (Krishna, 2011; Robinson et al., 2012; Andrews et al., 2014; Grolleau et al., 2016).

In effect and practice, CSR is receiving considerable attention (Chen and Huang, 2016), particularly in the context of CRM strategy, which stimulates businesses to donate parts of their profits to charities that encourage health and human services support, environmental protection and other causes (Singh et al., 2011; Grolleau et al., 2016). Despite its decades-long scientific attention (e.g. Varadarajan and Menon, 1988), however, scholars are not keeping up with CRM changes. And the volume of extant works on the subject (e.g. Torres et al., 2012; Hadjikhani et al., 2016) does not reflect its evident importance among businesses, particularly in the international context (Eteokleous et al., 2016). The latter still bears significant questions pertaining to implications, effectiveness, cross-cultural and cross-border idiosyncrasies, varied consumer demographics and diverse international markets, heterogeneous markets and competitive conditions, local rivals' factors and digital/online factors, among many others (Choi et al., 2016; Kull and Heath, 2016; Kumar et al., 2017; Laroche, 2017; Nelson and Vilela, 2017; Vrontis et al., 2017). Exploring contemporary insights in and across international markets, in the cause-related context, therefore, is an imperative for both scholars and executives alike.

This special issue of the International Marketing Review brings together empirical and theoretical advancements connecting to this research gap, focusing on how extant and emergent variables and constructs can be leveraged in order to develop insights into what does and does not work in international business in the context of CRM. Thus, the articles presented here act to identify and solve current deficiencies in the international CRM literature, and as a prelude to the work that still needs to ensue.

CRM historical perspective and extant scientific foundation

Companies tend to act in socially responsible ways through CRM initiatives. Varadarajan and Menon (1988, p. 60) identify CRM as a significant dimension of CSR, and define it as “the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue providing exchanges and satisfy organizational and individual objectives.” Simply stated, CRM is the business partnership of a for-profit company with a nonprofit organization to promote the former's products and services and, at the same time, raise funds for a worthy cause.

American Express gave birth to CRM in 1983 with a campaign created to inspire the American people to contribute to the restoration of the Statue of Liberty by simply using the American Express credit card. The campaign generated $1.7m in support of the cause, the use of the card increased 28% and new card applications grew by 45% (Lafferty et al., 2016; La Ferle et al., 2013). Since then numerous companies, including Starbucks, Pepsi, Uber, Coca-Cola, Dove and JetBlue, have adopted this marketing strategy in order to create social and shareholder value. Some examples of CRM include Procter and Gamble, which established a long-lasting partnership with UNICEF and helps to eliminate maternal and new-born tetanus by providing one tetanus vaccination for each purchase of Pampers (Vanhamme et al., 2012); Tommy Hilfiger, which donated 50% of the price of a specific bag to Breast Health International (Müller et al., 2014) and eBay for Charity, which raised more than $100m for charities in 2018 by enabling people to support their favorite cause when they buy or sell on eBay. Over time, CRM has evolved, with companies establishing longer-term alliances with nonprofit organizations and often partnering with more than one cause (Lafferty and Goldsmith, 2005). A case in point is with Subaru that, during its annual Share the Love campaign, donates $250 for every Subaru car purchased or leased to the purchaser's choice of charitable partners: Make-A-Wish, National Park Foundation, American Society for the Prevention of Cruelty to Animals ASPCA® and Meals on Wheels Association of America® (Lafferty et al., 2016).

The popularity of implementing CRM strategies makes sense. If companies can establish an emotional connection with their customers through their CRM programs, they can build a favorable corporate image, enhance the business reputation, grow the customer bases, reach new market segments, enjoy increased sales and gain competitive advantage (Christofi et al., 2015; Hoeffler and Keller, 2002; Koschate-Fischer et al., 2012, 2016; Lafferty et al., 2004; La Ferle et al., 2013; Larson et al., 2008; Liu, 2013; Nan and Heo, 2007; Vanhamme et al., 2012; Varadarajan and Menon, 1988). Evidently, as CRM spreads, the scope and value of such activities for marketers also escalate.

Conversely, for consumers, CRM provides an opportunity to do good, and CRM incentives make people feel good about making a contribution and about themselves. According to Andreoni (1989), consumers, indeed, seek a “warm glow” from having “done their bit” toward making the world a better place. Moreover, as social causes are increasingly promoted on social media platforms, the “warm glow” consumers receive is enhanced, due to the very public nature of social media and the viral effect that is created (Wallace et al., 2017). Therefore, people may enjoy contributing to a good cause for the “warm glow” they experience from their charity-related purchase, and this feeling represents an additional incentive to choose a specific company. In this sense, CRM campaigns not only bring benefits to the for-profit company and the charitable cause it links up with but also provide value to consumers themselves.

The rising popularity of CRM is inevitably generating considerable research. Extant works investigate factors accounting for the success and effectiveness of CRM campaigns, and many success factors are identified, including the three key stakeholders (the for-profit company, the nonprofit organization and the consumer) and the fit, among these factors (Müller et al., 2014; Christofi et al., 2018). Research often reports on dealing with issues such as product choice (Barone et al., 2007; Basil and Herr, 2006; Chang, 2008), wording (Chang, 2008; Pracejus et al., 2003) and the choice of nonprofit partner (Lafferty and Goldsmith, 2005). Although there is a broad range of issues that are discussed in the extant body of CRM literature, the most widely studied issues are those focusing on company-cause fit (e.g. Basil and Herr, 2006; Chang et al., 2018), attitudes toward CRM (e.g. La Ferle et al., 2013; Samu and Wymer, 2009; Youn and Kim, 2008) and purchase intentions (e.g. Barone et al., 2007; Duarte and Silva, 2018; Chen and Huang, 2016). Adding to this, the majority of studies in this domain show that CRM programs can evoke positive feelings from customers and positively influence their purchasing behavior (e.g. Chang, 2008; Nan and Heo, 2007; Pracejus et al., 2003). Research also identifies variables that affect consumers' reactions and attitudes toward CRM campaigns, including corporate credibility (Lafferty, 2007), cause familiarity (Lafferty and Goldsmith, 2005), consumers' level of brand consciousness (Nan and Heo, 2007), psychographic characteristics of consumers (Youn and Kim, 2008) and consumer skepticism (Singh et al., 2009; Youn and Kim, 2008) to name but a few.

A number of streams of research converge to provide a thorough examination of the impact of key factors on consumer attitudes in the CRM context. Ross et al. (1992) found that women have more favorable attitudes toward CRM than men. Müller et al. (2014) reported that the size of the donation has a positive effect on brand choice if consumers do not face a financial trade-off, whereas using a monetary frame, donation size may hurt the brand image. Bigné et al. (2012) explored the cause-brand fit and found that both types of fit, functional and image, have a positive influence on brand credibility and that the brand is likely to be considered credible and altruistic when a perceived fit exists in a cause–brand alliance context. Moreover, as early as two decades ago, Strahilevitz (1999) provided evidence that consumers' willingness to pay more for a brand which is linked with a charitable cause is affected by product type and donation magnitude. Specifically, CRM incentives, at the time, were found to be more effective when they are linked with frivolous products (e.g. a luxury cruise) that may cost more and when they are linked to significant purchases rather than practical products (e.g. paper towels); though more contemporary works (see preceding literature reviewed) indicate that consumer evolution over the past 20 years has diminished this gap. According to Singh et al. (2009), more exposures to a CRM advertisement results in increased awareness about the CRM campaign, thus increased familiarity, and makes the campaign more credible, reducing consumers' skepticism toward advertising. In the same vein, Nan and Heo (2007) supported that exposure to an advertising message with a CRM component will lead to a more favorable attitude toward the company (not toward the ad or the brand) than exposure to a similar advert without a CRM message. Relatedly, as Nan and Heo (2007) argue, when consumers are exposed to an advertisement with a CRM message, consumers also hold more favorable attitudes toward the sponsoring company, and as a result, such ads may enhance the company's overall image. Thus, the research body appears to show that consumers are in favor of socially responsible companies, and are increasingly willing to support CRM campaigns. As more and more consumers are becoming socially responsible (Plewa et al., 2016), it is hardly surprising that companies compete with each other through implementing CRM strategies.

Consumer attitudes, and the factors that affect their behavior toward CRM, are topics of considerable interest among scholars. And substantial research is devoted to understanding consumers' perceptions and the determinants that affect their responses, which are of great importance to the effectiveness of a CRM campaign. Despite this, the relationship between CRM and international business, the influence of culture within the CRM context, and competition between multinational corporations (MNCs) and local rivals are presently vastly under-researched topics.

Currently, there is relatively little research focusing on culture, with collectivism and individualism being the only dimensions under investigation within the CRM context. As an illustration, Robinson et al. (2012) show that allowing collectivistic consumers, who tend to act in the interests of their society, to choose the charity, enhances their perceptions of having a personal role in helping a charitable cause; consequently, collectivist consumers respond more positively to the products associated with the cause. According to La Ferle et al. (2013), Indian (collectivistic) consumers have more positive attitudes toward CRM campaigns, and propose that this is due to their perceptions of the novelty being higher than that of Americans (individualists). With their study, Vaidyanathan et al. (2013) document that individuals in collectivistic cultures with interdependent self-construal showed a marked intention to pay the higher product price in order to support a cause of a prosocial nature. Kim and Johnson (2013) provided evidence that Americans (members of an individualistic culture) are more likely to purchase a social-cause product when they associate feelings of pride with the CRM campaign, whereas Koreans (members of a collectivistic culture) are more likely to purchase such products when they associate feelings of guilt with the CRM campaign. And though their findings are not necessarily representative of collectivistic versus individualistic cultures' consumer behavior, they do present an interesting comparison of two quite representative cases of such cultures. Chang and Cheng (2015) examined whether and how the consumers' mindset (individualistic vs collectivistic) influence consumer skepticism toward advertising and purchase intention, and find that a more individualistic mindset leads to increased skepticism toward advertising, but a more collectivistic mindset leads to decreased skepticism. Choi et al. (2016) illustrated that consumers in collectivistic societies, such as in South Korea and India, attribute more altruistic motives to domestic than to foreign firms, but do not attribute more egoistic motives to foreign firms, whereas consumers in individualistic cultures, like the United States and Canada, make similar altruistic and egoistic attributions for both types of firms.

The effectiveness of CRM strategies is widely acknowledged among researchers and practitioners, yet, a limited body of scientific evidence exists about international markets in the context of MNCs and local firms. Becker-Olsen et al. (2011) examined an actual CSR program run by the global Nokia brand and claimed that their study shows that consumers from both cultures (individualistic and collectivistic) are more positive about global (vs proximal) CSR efforts from multinational firms. In contrast to these findings, studies examining foreign MNCs in emerging markets (Gruber and Schlegelmilch, 2015; Khan et al., 2015) show that when firms adapt their global CSR programs to fit the local setting, brand equity and consumer responses are more positive. The above indicate the contradiction of empirical findings, in extant research, on the subject of distant versus proximal tactics that MNCs and local firms should adopt (Strizhakova and Coulter, 2019), thus highlighting the need for further research in the field.

While academic research on the international marketing dimensions of CRM is lacking (Eteokleous et al., 2016), a review of the existing works on the topic further presents a diversity of even contradicting findings. This is hardly surprising, as CRM, as a marketing philosophy, as a strategic tactic, and as an individually behavioral and collectively social phenomenon, is bound to the wider cultural changes and shifts toward soft product features (see “The irrevocable role of international cause-related marketing and its research imperative” section above). Naturally and consequently, the element of culture and its variations across markets, nations and regions is expectedly affecting CRM locally, complicating international CRM practices that need to retain their wider spirit across markets, while adapting to local cultures. What arises, here, in essence, is the old “adaptation versus standardization” question (Vrontis et al., 2009) within this more contemporary context. It is further apparent that not only does the wider subject of CRM in the international business context remain speculative but also, specifically, and even more so, CRM in emerging markets lacks empirical validation, since even fewer studies attempted so far to examine this topic. Most of the studies focus on developed markets (e.g. Grau and Folse, 2007; Vanhamme et al., 2012). Emerging markets are only now beginning to be researched, with the most recent example being the study of Strizhakova and Coulter (2019), who provided empirical evidence as guidance to foreign MNCs and domestic firms in regard to their CRM strategies in Russia. More specifically, the authors showed that in Russia – a country they claim to be strongly nationalistic, and potentially reflecting other such countries – consumers have more positive attitudes toward domestic firms that support proximal causes and respond less favorably to foreign MNCs supporting proximal causes. Further, foreign MNCs can mitigate the effects of nationalism by supporting global causes. Interestingly, Choi et al. (2016) examined both developed and emerging markets and reported that domestic firms benefit from engaging with proximal local causes in emerging markets (i.e. collectivistic cultures). The discussion demonstrates that there is still no consensus over CRM's international marketing dimensions.

Concluding contextual elucidations and cross-disciplinary perspectives

CRM's success is ultimately a sign of changing times, both vertically and horizontally across the socioeconomic spectrum. In essence, and very much in practice, the driving force underlying change in today's businesses is the consumer. And the contemporary consumer seeks value benefits from products and services that transcend the traditional ones of quality and functionality (etc.) to embrace abstract and intangible values pertaining to social, ethical, self-image and self-actualization factors (Thrassou et al., 2018). Historically, branding largely rests on the development of images and notions in the minds of consumers that, over time, become associated with, if not merged into, the brand name. And while the core philosophy stands, its contemporary application requires it to be adapted to those associations that are mostly valued by the “new consumer”.

CRM touches upon that exact intersection of the individual with the world he/she exists in, his/her view of it and of himself/herself and his/her aspirations for it. In parallel, the individual “new consumer” is also driven by the primal instincts of self-promotion, image and status, and other higher or lower needs that lead diachronically to consumer wants. But the two are increasingly becoming interlinked, with actually caring and/or being seen to care (for social, ethical, environmental, humanitarian and/or philanthropic causes) satisfying both the evolved and the primal motivators of purchase. CRM, thus, offers consumers both the means and the ends to acquire their target core value benefits, at least additionally or peripherally to their core purchase purpose. In an ultra-competitive marketing environment, nonetheless, with numerous competitors frequently offering similar products of comparable tangible quality, this additional/peripheral value can make the individual purchase choice difference between brands and, collectively, between business success and failure.

And as markets become increasingly global, the more the knowledge of the international aspects of CRM becomes important. CRM is a focused subject, although not pure in discipline. It may be designed, executed and scientifically studied by marketers, but its true understanding stems from comprehending both the individual and the collective consumer (segments, markets, populations), and both their underlying and contextual motivators, factors and forces. In turn, this calls for a multiperspective and cross-disciplinary study of CRM to weave in social, cultural, economic, political and historical elements to the equation, and pose critical questions regarding its future. Regarding the latter, questions could include: Will a point be reached when CRM becomes simply a cost of doing business rather than a source of competitive advantage? Will CRM change from being an enhancing factor to becoming a prerequisite and a sanitary factor? How can CRM marketing strategies and tactics be adapted to fit international practice and campaigns? Will socioeconomic international integration reflect on CRM practice to allow for cross-market and cross-culture marketing uniformity'? and more. Beyond these business-specific questions, nonetheless, a number also arise that relate to social and ethical aspects of CRM and which implicitly or explicitly also affect its marketing aspects. For example, Do recipients of CRM (the people in need of help) also engage in CRM responses, helping those lower down the ladder? How are CRM campaigns perceived by the bottom of the market pyramid? Is there a counter movement to CRM and what are its arguments? Is it possible for consumers to knowingly or inadvertently support a wrong cause? and What are the social and business ramifications of this? How does CRM fit into the emerging debates on global consumer culture etc.? and Can it become a catalyst for positive social change?

This special issue of the International Marketing Review does not claim to offer definitive or absolute answers to the critical questions of international CRM. Nor does it hope to bring closure to some. On the contrary, it raises and expands the questions, presenting the scope and depth of the subject; and hopefully paves the way for further research. CRM is, after all, potentially the elusive answer to marketing critics and a true intersection of company with social profit.