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Journal of Nonprofit & Public Sector Marketing

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A Taxonomy of Cause-Related Marketing Research:Current Findings and Future Research Directions

Shruti Gupta PhD & Julie Pirsch PhD

To cite this article: Shruti Gupta PhD & Julie Pirsch PhD (2006) A Taxonomy of Cause-Related

Marketing Research: Current Findings and Future Research Directions, Journal of Nonprofit &Public Sector Marketing, 15:1-2, 25-43, DOI: 10.1300/J054v15n01_02

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A Taxonomyof Cause-Related Marketing Research:

Current Findingsand Future Research Directions

Shruti Gupta

Julie Pirsch

ABSTRACT. Cause-related marketing is an increasingly popularmethodof improving marketing relationships with customers, both for the spon-soring company and for the participating cause. This paper outlines therewards and risks for the company and the cause as they consider thistype of partnership, as well as the benefits and drawbacks for the cus-tomers asked to participate in these programs through the purchase of the sponsored product or service. Future directions for research arerecommended in order to (1) expand the findings within this domain,and (2) to maximize sales results from cause-related marketing initia-tives for businesses and causes. [Article copies available for a fee from The

Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address:

<[email protected]> Website: <http://www.HaworthPress.com>© 2006 by The Haworth Press, Inc. All rights reserved.]

KEYWORDS. Cause-related marketing, taxonomy

Shruti Gupta, PhD, is Assistant Professor of Marketing, The Pennsylvania StateUniversity–Abington, 1600 Woodland Road, Abington, PA 19001 (E-mail: [email protected]).

Julie Pirsch, PhD, is Assistant Professor of Marketing, Villanova University.Address correspondence to: Julie Pirsch, MarketingDepartment, VillanovaUniver-

sity, 3006 Bartley Hall, Villanova, PA 19085 (E-mail: [email protected]).The authors are listed in alphabetical order and contributed equally to the paper.

Journal of Nonprofit & Public Sector Marketing, Vol. 15(1/2) 2006Available online at http://www.haworthpress.com/web/JNPSM© 2006 by The Haworth Press, Inc. All rights reserved.

doi:10.1300/J054v15n01_02 25



INTRODUCTION

In 1999, Sears partnered with Gilda’s Club, a non-profit network of local meeting places for people living with cancer (Discount StoreNews, 1999). By donating a portion of the sales from selected merchan-dise, andby creating strategicallianceswith DieHard RacingTeam andLevi’s, Sears helped Gilda’s Club families find resources to deal withthedevastating effects of cancerby raising over three million dollars. Inaddition to the financial support generated for this cause, Sears in-creased the sales revenue of those products tied to the cause, andbrought national recognition to this otherwise unknown charity. Searscontinued this charitable partnership during the 1999 holiday season

by supporting the “Give Gilda’s Club a Charge” holiday campaign,donating sales proceeds from every purchase made with a Sears Card(Ebenkamp1999). This partnership between Gilda’s Club and these na-tional brands is and excellent example of cause-related marketing: aprogram designed to createa partnership between a sponsoring firm anda non-profit cause that raises money through product sales. Considerthese other examples of cause-related marketing:

• Visa instigated a charitable partnership with Reading is Funda-mental (RIF), a non-profit organization (NPO) focused on pro-moting children’s literacy. Every time the card was used withpartner merchants, Visa donated a percentage of an item’s pur-chase price to RIF. This cause association generated in excess of

$1million for RIF, increasednational awareness of the importanceof youth literacy, enhanced Visa’s brand image, and increasedVisa’s transaction volume by 18.9% in the first year of the cam-paign (www.causepartners.com/cause.html).

• Darden Restaurant’s Olive Garden chain raised $15 million overthe last 13 years for leukemia and lymphoma research, educationand treatment with their annual Pasta for Pennies program (www.olivegarden.com/ourcommunity/pennies.asp). Through this pro-gram, more than one million students in schools around the coun-try bring spare change to their classrooms each year to benefit thelocal chapters of The Leukemia & Lymphoma Society. The classin each school that raises the most money receives a pasta partyfrom Olive Garden.

• In 1999, J.C. Penney offered “A Very Rudolph Christmas” CD,donating two dollars of each cash purchase to its Can Do After-School program designed to support high quality, affordable after

26 JOURNAL OF NONPROFIT & PUBLIC SECTOR MARKETING



school programs for children nationwide, reaching their one mil-lion dollar goal.

As is evident from the above industry examples, cause-related mar-keting has become a popular strategic marketing tool for companies.This surge in corporate enthusiasm can be traced back to American Ex-press’ support of the Statue of Liberty restoration in 1983. Cause-re-lated marketing is a critical part of the strategic marketing plan forcompanies interested in satisfying the needs and wants of their publics.While marketing in general is widely perceived as the process of sell-ing, influencing and persuading the end user to purchase a product, italso must serve and satisfy the human needs of its customers (Kolter

and Levy 1969) and all of its other internal and external publics (Kolter1972). In order to reach these publics and differentiate one firm fromother firms, marketers can use cause-related marketing to support thealtruistic needs of its internal and external customers by “tying its eco-nomic activity to a higher social purpose” (Kolter and Levy 1969, p. 15).Today, many large organizations have cause-related marketing pro-grams that support a multitude of causes. Companies use thesecause-related marketing as a strategic and tactical tool to help realize aplethora of corporate objectives such as increasing sales and marketshare and improving company and product performance (Ross, Stutts,and Patterson 1990-1991).

In the literature, cause-related marketing emerges as a distinct do-main with a seminal paper by Varadarajan and Menon (1988). With al-

most 20 years since the inception of formal cause-related marketinginitiatives in practice, this paper seeks to review the literature in this do-main, and offers a taxonomy that structures research efforts and helpsidentify future research directions. Past research on cause-relatedmarketing has followed three major directions, each of which will bediscussed below. One direction has contributed to the conceptual de-velopment of the construct, the second seeks to understand the nature of customer responses to cause-related marketing initiatives, while thethird highlights the rewards and risks for the alliance partners.

CONCEPTUAL DEVELOPMENT

In their seminal paper on cause-related marketing, Varadarajan andMenon (1988, p. 60) offer the most comprehensive conceptualization of cause-related marketing.Theseauthors define cause-related marketingas:

Shruti Gupta and Julie Pirsch 27



. . . the process of formulating and implementingmarketing activi-ties that are characterized by an offer from the firm to contribute aspecified amount to a designated cause when customers engage inrevenue-providing exchanges that satisfy organizational and indi-vidual objectives.

Cause-related marketing has also been referred to as joint venturemarketing (File and Prince 1998) that links organizational identity tononprofits with a social cause (Varadarajan and Menon 1988), and as a“. . . complex utilitarian economic exchange between the customer, thefirm and the cause” (Ross, Patterson, and Stutts 1992). Still others de-scribe cause-related marketing as marketing alliance using transac-

tion-based promotions, joint issue promotions and licensing to reach itsgoals (Andreasan 1986).

While most researchers define cause-related marketing in terms of corporate commitment to a social cause in lieu of customers’ purchases(Varadarajan and Menon 1988), others argue that it is simply anotherform of corporate philanthropy, with the underlying objective of in-creased sales (DiNitto 1989). In marketing terms, cause-related market-ing is best described as a strategy designed to promote the achievementof marketing objectives (such as brand sales) via company support of social causes (Barone, Miyazaki, and Taylor 2000).

Companies can choose to operationalize their cause-related market-ing programs through one of two ways. First, companies may choose to

establish a direct relationship between sales of company products andits support of a social cause. For example, Target retail stores maychoose to donate 1% of each consumer transaction to selected neighbor-hood community groups. Alternatively, companies may choose a lessvisible and indirect path when making an overall effort to behave in so-cially responsible ways (Mohr, Webb and Harris 2001). Examples of this option can be seen in donations of money, materials, and supplies tocauses, sponsoring public service announcements in the media (seeEbenkamp 1999) or through employee volunteering (Meyer 1999).Wal-Mart recently opted for this strategy in lieu of a purchase-spon-sored program by donating$100 million in 1997 to support children andfamilies (Meyer 1999). In the end, however, the company’s goal in par-ticipating in a cause-related marketing campaign is not only to provide

financial support to a worthy cause, but also to establish or reinforce analtruistic public persona with respect to the firm, its brand, or both, inthe eyes of its most important audience: the customer.




CUSTOMER RESPONSESTO CAUSE-RELATED MARKETING PROGRAMS

Existing research efforts have described how a cause-related market-ingcampaign influences customer attitudesandpurchase intent. In a na-tionwide surveycompletedby Cone CommunicationsandRoper StarchWorldwide, consumers reported that when given a buy choice betweentwo products of equivalent price and quality, 78% would more likelybuy a product and 54% would pay more for a product associated with acause they care about. Sixty-six percent of those surveyed said theywould switch brands to support a cause and 84% said that cause-relatedmarketing helps create a positive company image (Carringer 1994).

Since the 2001 tragedy of September 11, consumer willingness toparticipate in cause-related marketing initiatives has significantly in-creased (http://www.coneinc.com/Pages/pr_13.html). The 2002 ConeCorporate Citizenship Study found that 89% of Americans believe thatit is more important than ever for companies to be socially responsible(http://www.coneinc.com/Pages/pr_13.html). Additionally, the recentincrease in corporate scandal related to financial fraud (e.g., Arthur An-derson and Worldcom) has increased the public’s willingness to punishthose corporations that consumers perceive to be working against thebest interests of their customers. Specifically, surveyed consumers of-fered the followingresponses to situations of corporate irresponsibility:

• 91% would consider switching to another company’s products or

services;• 85% would speak out against the company to family and friends;• 83% would refuse to invest in the company’s stock;• 80% would refuse to work for that company.

Finally, when asked whether a company’s commitment to social is-sues was important when deciding which companies consumers want tosee doing business in their community, responses increased from 58%in March, 2001 to 84% in July, 2002. Clearly, consumers now more thanever value a company’swillingness to support relevant causes, rewardingthose companies that follow this path, and punishing those that do not.

As a strategic marketing tool, cause-related marketing has been foundto be more effective among customers purchasing luxury items than

practical ones (Ross, Patterson, and Stutts 1992; Strahilevitz and Myers1998). In this case, cause-related marketing may offset the feeling of guilt associated with the purchase and consumption of luxury products




(Strahilevitz and Myers 1998). Other evidence shows that customersprefer local causes to national causes, and that women are more favor-able towards cause-related marketing than men (Ross, Patterson, andStutts 1992). In a situation when price and quality attributes are similaracross two competing brands, customers are likely to lean positively to-wards themanufacturer supporting a socialcause (Carringer 1994;Staff 1997).

Although research generally shows an overwhelming level of cus-tomer support for cause-related marketingprograms, some variations incustomer perceptions of cause-related marketing remain. This variationis often explained by probing customer perceptions of a company’smotivation behind its cause-related marketing initiative (Drumwright

1996; Barone, Miyazaki, and Taylor 2000). The focal question for cus-tomers evaluating cause-related marketing initiatives is whether or notthey perceive cause-related marketing programs as cause-beneficial orcause exploitative (Andreasan 1986; Varadarajan and Menon 1988;Ross, Stutts, and Patterson 1990-1991). Specifically, is the goal of thecause-related marketing initiative to increase sales revenue and marketshare? Or does the company’s motivation arise from a genuine supportof the social cause at hand? These two questions can have a critical im-pact on the success of the cause-related marketing initiative by callinginto question not only the initiative itself, but also the credibility of thesponsoring brand.Understanding the answers to these questions is criti-cal to both the sponsoring firmand the associatedcause before launch of the cause-related marketing initiative.

Other variations in customer responses to cause-related marketinginitiatives may come from the extent to which customers must maketradeoffs between competing products based on differences in priceand/or performance when faced with a cause-related marketing productchoice (Barone, Miyazaki, and Taylor 2000, p. 258). The degree towhich competing products differ can affect the consumer’s willingnessto take a cause-related marketing initiative into consideration. When nointer-brand differences exist, any cause-related marketing activity posi-tively influences customer choice. However, when inter-brand dif-ferences exist and require tradeoffs by the customer, the tendency of the customer to select a particular brand will depend on the size of the cause-related marketing advantage provided by that firm (Barone,Miyazaki, and Taylor 2000).

In the end, it is important to recognize that the overwhelming re-search focus in the domain of cause-related marketing has been on con-sumer responses to these programs when measuring the program’s




effectiveness. This research drive has been partly motivated by the un-derlying assumption that cause-related marketing is targeted only to-wards one of the organization’s stakeholders–the consumers. Thisassumption hassomewhat erroneously ledto theperception of cause-re-lated marketing programs as primarily transaction-based. However,other researchers argue that companies should instead measure perfor-mance of cause-related marketing programs not only by measuring cus-tomer purchase levels, but also by tracking changes in company imageandcustomer andemployee satisfactionandloyalty (Andreasan 1986).

This debate between these two viewpoints is ongoing, and representsa rich opportunity for future research within this domain. Specifically,what motivation really underlies cause-related marketing initiatives?

Are they simply designed to increase sales, or does generating a morepositive brand image through “politically correct” sponsorship of aneedy population or organization equal (or even outweigh) potentialprofits? Investigating these questions would provide valuable insightfor marketing practitioners generating these programs, and supply criti-cal guidelines for understanding what rewards and risks companiesshould expect from entering into these types marketing programs.

REWARDS FOR PARTICIPATING IN CAUSE-RELATED MARKETING INITIATIVES

The three key stakeholders in a cause-related marketing program arethe sponsoring company, the cause receiving the support and the cus-tomerswhomust decidewhether or not to purchase a cause-related mar-keting associated product. Following is a summary of the rewardsaccrued by each participant.

Company Rewards

The sponsoring firm can realize the rewards of participating in acause-related marketing initiative at both theproduct level andat theor-ganizational level.

Product related rewards to the company include increasing the prod-uct’s ability to break through the advertising clutter in the marketplace(Shell 1989; Oldenberg 1992), generating low cost exposure for theproduct (Pasley 1990; Zbar 1993), and increasing the product’s ability

to win customer support (Henricks 1991; Brown and Dacin 1997). Ad-ditionally, the positive perception associated with a particular spon-sored product can spill over to other, related products offered in the




same lineor under the same brand name, resulting in a halo effect for thecompany’s products. This halo effect can produce an increase in thecustomer’s willingness to purchase company’s other products (Barone,Miyazaki, and Taylor 2000), to pay premium prices (Meyer 1999), andto switch brands (Larson 1994; Meyer 1999).

Organizational rewards from participating in cause-related market-ing initiatives include generating favorable customer attitudes towardsthe sponsoring firm (Ross, Stutts, and Patterson 1990-1991; Ross,Patterson, and Stutts 1992; Brown and Dacin 1997), increasing favor-able purchase intentions towards company brands (Andreasan 1986;Ross, Patterson, and Stutts 1992; Webb and Mohr 1998; Meyer 1999;Barone, Miyazaki,andTaylor2000), creating a higher level of visibility

for the organization (Andreasan 1986), generating a differentiated im-age due to the association with social causes (Andreasan 1986; Shell1989; Barich and Kotler 1991; Meyer 1999; Bronn and Vrioni 2001),enhancingcorporate image (Schiller1988; Fombrun andShanley 1990;Larson 1994; Meyer 1999; Bronn and Vrioni 2001), allowing the com-pany to communicate its core values to the society (Shell 1989; Mohr,Webb, and Harris 2001), giving the company a competitive edge (Bronnand Vrioni 2001) and reducing employee turnover (Meyer 1999). Fi-nally, a cause-related alliance gives the corporation access to thenon-profit’s clientele, staff, trustees and donors, all of whom could bepotential customers (Andreasan 1986).

Of all the rewards for a company that engages in a cause-related mar-keting program, however, the key benefit of a cause-related marketinginitiative to the organization continues to be the generation of favorablepurchase intent or product choice among the organization’s customers(Shell 1989; Lawrence 1993; Mohr, Webb, and Harris 2001) (see Ta-ble 1). This can result in increased sales and profits for the company,and the increased recognition of its brand name(s) and product offeringwithin its consumer base.

Cause Rewards

Causes accrue rewards such as new sources of much needed funds andheightened public awareness (Caesar 1986; Varadarajan and Menon1988) (see Table 2). These benefits are available with little or no out-of-

pocket costs to the cause (Gayle 1999). Revenue earned from suchsources proves to be valuable to the cause because it can be used for op-erating expenses and routine capital expenditures that individual donors




are less likely to fund (Lowell, Silverman, and Taliento 2001). Addi-tionally, other research suggests thatpeople perceive cause-related mar-

keting to be an effective way to financially assist social non-profitorganizations (Ross, Stutts, and Patterson 1990-1991; Ross, Patterson,and Stutts 1992).


TABLE 1. Sponsoring Company Rewards

Product Rewards

• Increased ability to break through advertising clutter (Shell 1989;Oldenberg 1992)

• Generating low cost product exposure (Pasley 1990; Zbar 1993)

• Increasing overall customer support (Henricks 1991; Brown and Dacin1997)

• Increasing customers’ purchase of company’s other products (Barone,Miyazaki, and Taylor 2000)

• Increasing customers’ willingness to pay premium prices (Meyer 1999)

• Increasing customers’ willingness to switch brands (Larson 1994; Meyer

1999)

Organizational Rewards

• Generation of favorable purchase intent or product choice among theorganization’s customers (Shell 1989)

• Generating favorable customer attitudes towards sponsoring firm(Ross, Stutts, and Patterson 1990-1991; Ross, Patterson, and Stutts1992; Brown and Dacin 1997)

• Increasing favorable purchase intentions towards company brands(Andreasan 1986; Ross, Patterson, and Stutts 1992; Webb and Mohr1998; Meyer 1999; Barone, Miyazaki, and Taylor 2000)

• Creating higher level of visibility for the organization (Andreasan 1986)

• Generating a differentiated image due to the association with social

causes (Andreasan 1986; Shell 1989; Barich and Kotler 1991; Meyer1999; Bronn and Vrioni 2001)

• Enhancing corporate image (Schiller 1988; Fombrun and Shanley 1990;Larson 1994; Meyer 1999; Bronn and Vrioni 2001)

• Communicating core company values to the society (Shell 1989)

• Giving the company a competitive edge (Bronn and Vrioni 2001)

• Reducing employee turnover (Meyer 1999)

• Gaining access to the non-profit’s clientele, staff, trustees and donors, allof whom could be potential customers (Andreasan 1986)



Customer Rewards

Although the company and the cause realize the bulk of the rewardsof a cause-related marketing program, customers are rewarded by asense of additional perceived value to their purchase (Webb and Mohr1998). Additionally, customers gain the ability to differentiate betweencompeting manufacturers (Barone, Miyazaki, and Taylor 2000), andcan satisfy their altruistic needs of the self by helping society (Polonskyand Wood 2001) (see Table 3). According to Strahilevitz and Myers(1998), customers most often seek to realize this added value in the pur-chase of “frivolous” goods, where they can rationalize their purchasesand reduce any cognitive dissonance associated with the exchange.

RISKS OF PARTICIPATING IN CAUSE-RELATED MARKETING PROGRAMS

Several risks are also associated with a cause-related marketingstrat-egy. These shortcomings can also be classified by stakeholder: thoseexperienced by the company, the cause and the customer.

Company Risks

Despite altruistic intentions, investment in cause-related marketingprograms poses a financial risk for the company (Shell 1989) (see Ta-ble 4). This is primarily because cause-related marketing is not philan-thropy, and the funding for the program is usually apportioned from themarketing budget (Ross, Stutts, and Patterson 1990-1991). Other pit-falls for firms associating with social causes include wasted monetary


TABLE 2. Sponsoring Cause Rewards

• Gain new sources of much needed funds and heightened publicawareness (Caesar 1986; Varadarajan and Menon 1988)

• Little or no out-of-pocket costs to the cause (Gayle 1999)

• Revenue earned can be used for operating expenses and routine capitalexpenditures that individual donors are less likely to fund (Lowell,Silverman, and Taliento 2001)

• Positive perception that cause-related marketing is an effective way to fi-nancially assist social non-profit organizations (Ross, Stutts, andPatterson 1990-1991; Ross, Patterson, and Stutts 1992)



funds caused by linking up with a charity that offers little or no syner-gism, a difficulty in measuring the social contributions of the cause-re-lated marketing initiative, and the risk of customer cynicism (Meyer1999). Finally, as pointed out by Drumwright (1996, p. 71) one of themore critical risks of these types of “non-economic” marketing activi-ties is the risk that customers perceive it as “marketing’s most un-abashed exploitation” (see also Smith and Stodghill 1994).

Cause Risks

The biggest cause-related marketing participation risk for the causeis that involvement with a corporate sponsor can bring the taint of com-

mercialism to the cause’s image (Garrison 1990) (see Table 5). Anotherrisk for cause is that cause-related marketing funds may be viewed bycustomers and companies as a substitute for regular individual and cor-porate philanthropic contributions, rather than as a supplement to theircontributions (Andreasan 1986; Caesar 1986). Other risks for cause in-clude the risk of wasted resources (if the alliance fails to meet its objec-tive), the loss of organizational flexibility to enter into other similaralliances with the sponsoring firms’ competitors, the use of antitheticalmarketing practices by the corporate partner, increased dependency oncorporate funds, and the risk of overwhelming the cause’s ability to ad-ministrate incoming contributions (Andreasan 1986).

Customer Risks

In a summary article, Polonsky and Wood (2001) identify severalsources of concern that cause-related marketing programs pose to cus-


TABLE 3. Customer Rewards

• Gain new sources of much needed funds and heightened publicawareness (Caesar 1986; Varadarajan and Menon 1988)

• Little or no out-of-pocket costs to the cause (Gayle 1999)

• Revenue earned can be used for operating expenses and routine capitalexpenditures that individual donors are less likely to fund (Lowell,Silverman, and Taliento 2001)

• Positive perception that cause-related marketing is an effective way tofinancially assist social non-profit organizations (Ross, Stutts, andPatterson 1990-1991; Ross, Patterson, and Stutts 1992)



tomers and to society. Customers run the risk of being misled by spon-soring firms that exaggerate cause-related marketing related generosity(see Table 6). This might lead the individual donor to perceive that the

cause no longer needs assistance, creating a shortfall in NPO funding,which in turn becomes a detriment to the customer by forcing the NPOto reduce client services. The company-cause alliance may also lead


TABLE 4. Sponsoring Company Risks

• Increased financial risk for the company (Shell 1989)

• Decreased marketing budget for other marketing activities (Ross, Stutts,and Patterson 1990-1991)

• Wasted monetary funds caused by linking up with a charity that offerslittle or no synergism (Meyer 1999)

• Difficulty in measuring the social contributions of the cause-relatedmarketing initiative (Meyer 1999)

• Risk of customer cynicism (Meyer 1999)

• Risk that customers perceive program as exploitation of the cause(Smith and Stodghill 1994)

TABLE 5. Sponsoring Cause Risks

• Taint of commercialism to the cause's image (Garrison 1990)

• Funds may be viewed by customers and companies as a substitute forregular individual and corporate philanthropic contributions, rather thanas a supplement to their contributions (Andreasan 1986; Caesar 1986)

• Risk of wasted resources if the alliance fails to meet its objective(Andreasan 1986)

• The loss of organizational flexibility to enter into other similar allianceswith the sponsoring firms' competitors (Andreasan 1986)

• The use of antithetical marketing practices by the corporate partner(Andreasan 1986)

• Increased dependency on corporate funds (Andreasan 1986)

• Risk of overwhelming the cause's ability to administrate incomingcontributions (Andreasan 1986)

• Individual donors perceive the cause no longer needs assistance,creating to a shortfall in cause funding and hindering the ability of thecause to assist its constituencies (Polonsky and Wood 2001)



customers to mistakenly perceive that the cause has participated in thedevelopmentof thesponsoring firm’s products and/orpractices. Forex-ample, in 1994 Johnson & Johnson’s McNeilConsumer Products Com-pany introduced a line of value priced painkillers branded under theArthritisFoundation name in exchange fora donation of over $1 milliona year for arthritis research (Sebastian 1994; Weisz 1994). McNeil dis-continued marketing the product in 1996 and agreed to pay 19 states $2million to settle allegations that it and the Arthritis Foundation led con-sumers to believe that the cause was involved in developing the drugsand that the drugs had been specially formulated with Arthritis Founda-tion research (Staff 1996a; Staff 1996b). Finally, in an attempt to forgemore lucrative relationships with sponsoring firms or to expand their

“customer” base, causes may choose to shift their focus to include a newtopic or group, in extreme situations at the expense of the original pro-gram. For example, a cause focused on breast cancer may choose to ex-pand its potential constituency by also focusing on lung cancer, or byabandoning breast cancer altogether to focus exclusively on lung can-cer. While in the short term this might benefit the cause by generating alarger potential audience, in the long term the consumer may be misledas the cause’s activities may be inconsistent with the consumer’s per-ceptions at thetime of their initial support (PolonskyandWood 2001).

FUTURE RESEARCH DIRECTIONS

The above literature review presents the key research findings inpeer-reviewed journals in the domain of cause-related marketing. Thematerial included in the review was classified into one of the followingareas:

1. Conceptual definition of cause-related marketing.2. Customer responses to cause-related marketing programs.3. Outcomes of cause-related marketing-rewards and risks for the

participants.

A number of general observations regarding the literature reviewedin this paper are useful for defining the frontiers of knowledge in thearea of cause-related marketing, as well as any gaps in the literature thatmay be targeted for future study. The first important future consider-ation in the domain of cause-related marketing lies in the treatment andexecution of the cause-related marketing programs themselves. While




the tactical issues listed above have been classified to enhance the read-

ability of the sections, in practice many decisions relating to what arehere regarded as separate issues are in fact interdependent. In otherwords, the conceptualizations of cause-related marketing programs areinterrelated to the type and intensity of customer response that in turninfluences its success or failure. Therefore, for cause-related marketingpartners, the operationalization, customer action and outcome of cause-related marketing programs should be discussed as an integrated con-cept and not as three separate issues. Researchers, too, should embracethis approach when designing research programs and discussing theoryin this domain. In order to effectively apply academic research into thebusiness world, recognition of the interdependence of the elements of acause-related marketing program is critical.

Second, while some authors have defined cause-related marketing intheir works, the majority of writers have been content with the defini-tion offered by Varadarajan and Menon (1988). While this definitionhas proved a solid foundation for research, a more updated definitionmay be necessary at this point. Specifically, a revised definition shouldstretch the scope of the measure of cause-related marketing success toinclude responses from all stakeholder groups, including customers,employees, suppliers and investors.

For example, recall Vardarajan and Menon’s (1988, p. 60) definitionof cause-related marketing as “. . . the process of formulating and imple-menting marketing activities that are characterized by an offer from thefirm to contribute a specified amount to a designated cause when cus-

tomers engage in revenue-providing exchanges that satisfy organiza-tional and individual objectives.” A revised definition might read asfollows:


TABLE 6. Consumer Risks

• Risk of being misled by sponsoring firms that exaggerate cause-relatedmarketing related generosity (Polonsky and Wood 2001)

• Customers may mistakenly perceive cause has participated in thedevelopment of the sponsoring firm’s products and/or practices (Polonskyand Wood 2001)

• Adoption of new or supplementary causes by the non-profit organizationmay be inconsistent with the consumer’s perceptions of the cause fromthe time of their initial support (Polonsky and Wood 2001)



Cause-related marketing is the process of formulating and imple-menting marketing activities that are characterized by an offerfrom the firm to contribute a specified amount to a designatedcause when customers engage in revenue-providing exchanges toinduce favorable responses from all company stakeholders (e.g.,investors, suppliers, employees and customers) which in turn sat-isfy organizational and individual objectives.

This modified definition relates closely to the debate about the goalsof cause-related marketing for participating companies, and how suc-cess is measured for these programs. While literature in this domain hasgenerally measured success as thecustomer’s intent to purchase a spon-

sored product, other considerations should be made when assessing theresults of a cause-related marketing initiatives. Andresean (1996) initi-ated this suggestion, arguing that cause-related marketing programsshould measure performance by tracking changes in variables like com-pany image and customer and employee satisfaction and loyalty.

Equally important in assessing the success of cause-related market-ing initiatives is the motivation behind the participation of the sponsor-ing company; perception of this motivation can not only affect thewillingness of the customer to purchase the sponsored product, but alsohow other internal stakeholders (e.g., employees, investors) feel abouttheir company’s true motives behind the program. If stakeholders per-ceive that their (sponsoring) company is launching a cause-related ini-tiative only to increase sales, improve brand image, or appear more

“politically correct,” the net result to the company could far outweighany positives gained from cause sponsorship. The question remains,however, as to how companies should balance the issues of profitabilityandaltruism.Certainly thecompany’s stakeholders recognize that thereis likely some motivation for profitable firms to participate in cause-re-lated marketing programs beyond simple altruism. Improved brand im-age, satisfied customers, product differentiation from competitors, andincreased sales are all reasonable results to expect from participating incause-related programs. But how do companies most effectively con-vey their sincerity of motivation to their publics, and balance their capi-talistic motivations with their altruistic ones? This area remains ripe forstudy, and presents interesting ethical dilemmas for marketing manag-ers on the company and cause side alike.

Third, though empirical work on customer responses has identifiedgenderand type of purchase (practical vs. frivolous) as moderating vari-ables that controls the intensity of response towards the cause-related




marketing initiative, work on studying moderating effects of other vari-ables is largely absent. Future research opportunities include investigat-ing how variables like consumer awareness, consumer skepticism of and level of involvement with the cause-related marketing programmoderate the nature and degree of customer response.

Fourth, empirical studies have not been confined to any particular in-dustry or product offering. Questions therefore remain as to whethercause-related marketing initiatives become more or less effective as theproduct offered or the industry targeted changes.

Fifth, a large number of authors list the resulting rewards and risksforcompaniesandnonprofit organizations participating in thecause-re-lated marketing program. However, researchers have not adequately

explained the reasons or processes that trigger these rewards and risksamong consumers. For example, why does participation in a cause-re-lated marketing initiative sometimes take the place of regular charitablecontributions in the mind of the participating consumer, even when thecause-related marketing contribution is far less in value than the con-sumer generally gives? Developing a deeper understanding of the pro-cesses that result in some of these outcomes would greatly assistmarketing practitioners as they design cause-related marketing pro-grams for their target audiences, and would aid causes in understandinghow to maximize their income through cause-related marketing pro-grams.

Sixth, this review indicates an absence of work addressing howcause-related marketing partnerships are determined to maximize re-

turns and maximize market impact. For example, how does Sears de-cide that Gilda’s Club is the right cause to partner with? Why did Searschoose Gilda’s Club rather than another, betterknown cause?In light of the growing popularity of and large investments in cause related mar-keting programs by firms, these are important questions to answer andunderstand. Thus, it is evident that further research is needed in order tostructure the most effective decision making structure for companiesand for causes alike as they determine their cause-related marketingpartners.

Finally, all empirical work has studied the effectiveness of cause-related marketing by examining the consumer’s intent to purchase thesponsored product. Do consumers tend to be loyal to companies thatrepeatedly engage in cause-related marketing programs, e.g., Avon,Campbell Soups, General Mills? Can the effectiveness of cause-relatedmarketing be more sustainable and long-term than the current short-term measure of purchase? Are customer loyalty and customer satisfac-




tion more appropriate indicators of the performance of cause-relatedmarketing?

SUMMARY

In short, cause-related marketing initiatives represent an increasinglypopular method of strategic marketing and competitive differentiation,particularly in mature or saturated markets. Companies frequently turnto this marketingoption as a means of exhibiting their corporate citizen-ship and altruistic intentions, while at the same time contributing totheir bottom lines.Causescapitalize on increasedconsumer attentionby

partnering with branded products, hoping for increased contributionsand improved brand awareness. And, consumers have the opportunityto take advantage of value added to their purchases, assuage any guiltabout extravagant spending, and can support their altruistic intentionstoward society. This research domain has established a solid base in theliterature as researchers have begun to understand the constructs andimportant variables in this domain. However, as outlined in this paper,important work remains to be done, presenting an exciting and develop-ing opportunity for researchers worldwide.

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Received: February 28, 2003

Reviewed: March 31, 2003 Accepted: July 24, 2003


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