Is there Need for more Transparency and Efficiency in Cause‐related Marketing

Abstract

“Growing awareness among consumers about sustainability issues (

ranging from recycling to fair wages for workers) are starting to shape consumer buying patterns” (Partos 2009). Especially for conscious consumers ethical and sustainable consumption are becoming mainstream.
With regard to ethical consumption the popularity is shown for instance by a growing relevance of Causerelated Marketing (CrM) campaigns in Germany. CrM is an increasingly applied marketing tool, where product purchase leads to target oriented donations regarding a designated cause, promoted on the product by label. However, research reveals that German consumers are sceptic with regard to the amount of money spent and have doubts towards unselfish motives of firms. At present little information is provided in CrM campaigns on how much of the sales price is spent on the ‘cause’ by the respective organization. If the gap between the sum consumers assume to be contributed and the amount really spent by the companies is too large this could lead to mistrust among consumers once they become aware of this. In the long run, this might decrease willingness to pay for those products in general. Also, firms’ reputation could be harmed (see e.g. Webb and Mohr 1998). Against this background, we aim to answer the question of (1) how much consumers assume to be contributing to the ‘cause’ by purchasing the respective product and (2) whether this information is of relevance for the consumer. We investigate (i) whether consumers want products to carry a label indicating the percentage or absolute amount of money being spent on the ‘cause’, (ii) how much money should be contributed to the ‘cause’ in the case of CrM, and (iii) how much consumers think companies do actually spend on the ‘cause’.
In this regard, we conducted a consumer survey (n=217) in Germany in 2009. Results show that (i) consumers want to be able to evaluate the efficiency of the CrM donation. 71% want this information given in percent and 63% would like to know the exact amount of money reaching the addressee. (ii) Regarding CrM results show that 46% of respondents would pay 5.00€ for a pound of CrM coffee if they can be sure that 20% reaches the ‘cause’. At the same time (iii) 54% of respondents believe that a  maximum of 6% of the CrM price premium reaches the ‘cause’.
Overall, consumers desire transparency with regard to CrM. Hence, our study enables marketers to develop efficient and effective consumer oriented communication strategies.