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Journal of Marketing Research

Vol. XLIX (December 2012), 910927

2012, American Marketing Association

ISSN: 0022-2437 (print), 1547-7193 (electronic) 910

NICOLE KOSCHATE-FISCHER, ISABEL V. STEFAN, and WAYNE D. HOYER

Companies increasingly employ cause-related marketing to enhancecustomer goodwill and improve their image. However, because theseefforts have major implications for pricing strategy and firm profitability,

understanding the relationship between the companys donation amountand customers willingness to pay is important. In particular, little isknown about the moderating effects that influence this relationship or theirunderlying mechanisms. Study 1 confirms that two types of customerpredispositions moderate the link between donation amount andwillingness to pay: donation-related and cause-related predispositions.Three additional studies focus on the negative moderating effect ofcompanycause fit and provide insights into the underlying moderationprocess. Specifically, the motives customers attribute to the companymediate the moderating impact of fit on the donation amountWTP link(Study 2), which occurs particularly in cases of utilitarian (Study 3) andprivately consumed products (Study 4).

Keywords: cause-related marketing, willingness to pay, donation amount,

moderating effects

Willingness to Pay for Cause-RelatedMarketing: The Impact of DonationAmount and Moderating Effects

During the past decade, cause-related marketing has

become the fastest-growing category of U.S. sponsor-ship spending, with average annual growth rates of morethan 12%. Many companies across different industries,including consumer packaged goods, retailing, and finan-cial services, have implemented campaigns that link themto various social causes, such as cancer research andchildren in need. Furthermore, despite a harsh economicclimate, in 2009 U.S. companies spent an estimated$1.55 billion on cause-related marketing alliances, a 2.2%increase over 2008 (IEG 2009). Taken together, cause-related marketing has become a valuable marketing tool.

A common transaction-based definition of cause-relatedmarketing links the companys donation directly to

Nicole Koschate-Fischer is Professor of Marketing, GfK-Chair

of Marketing Intelligence (e-mail: [email protected]

erlangen.de), and Isabel V. Stefan is a postdoc researcher, GfK-Chair

of Marketing Intelligence (e-mail: [email protected]), University of

ErlangenNuremberg. Wayne D. Hoyer is Professor of Marketing, James

L. Bayless/William S. Farish Fund Chair for Free Enterprise, McCombs

School of Business, University of Texas at Austin (e-mail: Wayne.Hoyer@

mccombs.utexas.edu). The authors thank the anonymous JMR reviewers,

Ty Henderson, and the participants at the Marketing Science Conference

for their helpful and insightful comments. James Bettman served as asso-

ciate editor for this article.

customers buying behavior: an offer from the firm to con-

tribute a specified amount to a designated cause when cus-tomers engage in revenue-providing exchanges that satisfyorganizational and individual objectives (Varadarajan andMenon 1988, p. 60). Historically, this amount has oftenbeen presented in the form of a percentage (x% of theprice will be donated); however, a concrete specification inabsolute dollar terms (e.g., x cents donated for every unitsold) is also becoming more common (Chang 2008). Forexample, in 2009, for every pink lipstick sold, MirabellaBeauty contributed $1 to the City of Hope disease researchand treatment center. At the end of 2008, Starbucks gave 50cents from each sale of the Starbucks RED exclusive bever-ages to the Global Fund to Fight AIDS, Tuberculosis, andMalaria, and in 2011, in the Save Lids to Save Lives pro-

gram, Yoplait donated 10 cents for each pink lid redeemedto Susan G. Komen for the Cure. More important, whatthese examples show is that in cause-related marketing, thedonation amount varies considerably. Thus, given this vari-ation, an important question is whether and how the dona-tion amount affects customers purchase behavior and otheroutcome variables.

One outcome variable that may have particular relevanceis customers willingness to pay (WTP), defined as themaximum amount of money a customer is willing to payfor a product or service (Krishna 1991). The relationshipbetween donation amount and WTP is of great importance


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Cause-Related Marketing 911

because both affect company profitability. On the positiveside, a higher donation should create more benefits for cus-tomers in terms of contributions to society and creating agood feeling, which in turn should lead to a higher WTP.Furthermore, increases in WTP for potential customerscan induce brand switching for products with cause-relatedmarketing (Cone 2007). On the negative side, donatingmore involves greater costs for the company, which canreduce profitability (Krishna and Rajan 2009). Thus, under-standing how donation level affects WTP is essential.

Studies conducted in a charity auction context haveexamined customers WTP for different percentage lev-els of donations (e.g., 25% of the proceeds; Elfenbeinand McManus 2010; Haruvy and Popkowski Leszczyc2009; Popkowski Leszczyc and Rothkopf 2010; PopkowskiLeszczyc and Wong 2010) and absolute donation amounts(Popkowski Leszczyc and Rothkopf 2010). These studiesfind a positive (concave) relationship between these con-structs. However, research examining whether and howthe relationship between donation amount and WTP mightvary across situations is lacking. In other words, certainfactors, such as customer predispositions or product char-

acteristics, might intervene to strengthen or weaken thelink between donation amount and WTP. In their study,Popkowski Leszczyc and Wong (2010) find that the valueof the product being sold moderates the effect of dona-tion promise on selling price. Thus, there may be impor-tant moderators of the donation amountWTP link, andresearch is necessary to explore these effects.

Against this background, the current research makes sev-eral significant contributions. First, to gain a deeper under-standing of when a transaction-based donation increasescustomers WTP, Study 1 investigates two main categoriesof variables that may moderate the relationship betweendonation amount and WTP: donation-related customer pre-dispositions (i.e., attitude toward helping others and warm

glow motive), which reflect customer attitudes and motivestoward their donation behavior, and cause-related customerpredispositions (i.e., cause involvement, cause organizationaffinity, and perceived companycause fit), which are causespecific and differ between customers and campaigns. Ininvestigating both moderator categories, we respond to callsin the literature to analyze how individual differences mayalter the effectiveness of cause-related marketing (Chang2008). To gain a deeper understanding of the donationamountWTP link, a more detailed examination of moder-ating effects is necessary, and from a practical perspective,managers need guidance on the conditions under which adonation can have a positive impact on WTP.

Second, Study 2 investigates one of our moderating

effects, companycause fit, in greater detail. Whereasstudies have found a positive main effect of companycause fit on purchase intention and choice (Lichtenstein,Drumwright, and Braig 2004; Pracejus and Olsen 2004),we predict a negative interaction between donation amountand companycause fit on WTP. That is, the impact of thedonation amount will actually be stronger when companycause fit is low. To provide a greater understanding ofthis counterintuitive interaction, we investigate the processunderlying this effect. Specifically, we hypothesize that thisprocess is driven by customers attributions regarding thecompanys motives for making the donation and that these

attributions mediate the moderating effect of companycause fit.

Third, because this counterintuitive interaction betweendonation amount and companycause fit is unlikely tooccur in every situation, we investigate two key dimen-sions that we expect to have an impact on this interaction.The first dimension is the products hedonism/utilitarianism(Study 3). Because attributions tend to be cognitivelydriven, we predict that the interaction effect is stronger forutilitarian products, for which the purchase is more cogni-tively driven, than for hedonic ones. The second dimensionis the publicness/privateness of the consumption situation(Study 4). Specifically, we expect that the interaction ismore likely to occur when the product is consumed in pri-vate because, when customers consume the product in pub-lic, they are more concerned about their own reputation andless about the companys motives.

LITERATURE REVIEW AND CONCEPTUAL

FRAMEWORK

Overall, previous research has shown that cause-relatedmarketing can positively influence customers attitudes and

purchase behavior (e.g., Arora and Henderson 2007; Chang2008; Gupta and Pirsch 2006; Haruvy and PopkowskiLeszczyc 2009; Henderson and Arora 2010; Krishna andRajan 2009; Lafferty, Goldsmith, and Hult 2004; Nanand Heo 2007; Popkowski Leszczyc and Rothkopf 2010;Popkowski Leszczyc and Wong 2010; Pracejus and Olsen2004; Pracejus, Olsen, and Brown 2003). However, the out-comes of a cause-related marketing campaign are signif-icantly influenced by implementation-related factors, suchas the donation amount.

Studies have examined the main effect of donationamount on attitude- and behavior-related outcomes, suchas intention to purchase (Chang 2008; Folse, Niedrich, andGrau 2010), product appeal (Dahl and Lavack 1995), prod-

uct choice (Arora and Henderson 2007; Pracejus, Olsen,and Brown 2003; Strahilevitz 1999), and customers WTPor bidding behavior in a charity auction context (Elfenbeinand McManus 2010; Haruvy and Popkowski Leszczyc2009; Popkowski Leszczyc and Rothkopf 2010; PopkowskiLeszczyc and Wong 2010). For example, Pracejus, Olsen,and Brown (2003) find that the donation amount has apositive impact on product choice when holding the priceconstant. In addition, Haruvy and Popkowski Leszczyc(2009) show that the donation amount in a charity auction(expressed as percentage of the auction revenue) positivelyinfluences auction revenues.

In addition to donation amount, two categories of cus-tomer predispositionsdonation- and cause-relatedcan

influence the outcomes of cause-related marketing cam-paigns. Two key donation-related customer predispositionsthat have been previously investigated are attitudes towardhelping others and the warm glow motive (Arora andHenderson 2007; Haruvy and Popkowski Leszczyc 2009;Krishna 2011; Popkowski Leszczyc and Rothkopf 2010;Winterich and Barone 2011). For example, in a charity auc-tion context, Haruvy and Popkowski Leszczyc (2009) findthat bidders reactions to donation percentages vary con-siderably depending on the level of these predispositions.

In terms of cause-related customer predispositions, moststudies have focused on the companycause fit (e.g., Nan


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912 JOURNAL OF MARKETING RESEARCH, DECEMBER 2012

and Heo 2007; Pracejus and Olsen 2004). For example,Pracejus and Olsen (2004) show that the companycausefit positively influences the additional value created by apurchase-contingent donation. More specifically, a productwith a donation to a high-fit charity has a higher value thanthe same product with the same level of donation to a low-fit charity. In addition, previous research has indicated thatin the case of a highly relevant cause (Arora and Henderson2007) or a hedonic product (Strahilevitz 1999; Strahilevitz

and Myers 1998), the customer is more likely to choose aproduct bundled with a purchase-contingent donation (char-ity incentive) over a product with an equivalent price dis-count or cost savings (monetary incentive) than in situationsof low cause relevance or a utilitarian product. In addition,other studies find that the customers cause involvement(e.g., Lichtenstein, Drumwright, and Braig 2004) and causeaffinity (e.g., Arora and Henderson 2007) have a positiveimpact on product choice.

In summarizing the previous literature, we identify twomain research gaps. First, previous research has indicatedthat donation amount affects various outcomes, includingWTP (in a charity auction context). However, researchexamining whether this effect varies across contexts is

lacking. Second, most previous studies have investigatedthe main effects of customer predispositions and provideguidance as to whether to implement cause-related mar-keting for specific markets and how to select appropri-ate causes. However, they do not answer the questionwhether these variables also have moderating effects. Theseimportant research gaps motivate our study and conceptualframework.

Figure 1 illustrates the overall conceptual framework forthis investigation. We predict that donation amount has a

Figure 1RESEARCH FRAMEWORK

Attitude 7oward+Hlping 2thers

Warm *low0Rtive

Cause,Qvolvement

Cause2rganization$Ifinity

Company&ause )it

H2 + H3 +

H4 + H5 + H6

H1 &oncave

Cause-Related Customer Predispositions

Donation-Related Customer Predispositions

Willingness to3Dy (WTP)

Donation$Pount

direct impact on WTP, with both linear and nonlinear paths.Furthermore, we posit that the relationship is moderated bytwo key groups of variables: (1) donation-related customerpredispositions of attitude toward helping others and warmglow motive and (2) cause-related customer predispositionsof cause involvement, cause organization affinity, and per-ceived companycause fit. Our selection of these moder-ating variables reflects conceptual considerations, previous

research on cause-related marketing and related areas, andtheir practical relevance.

The foundation of this framework rests on the concept ofimpure altruism, which offers an economic explanation ofgiving behavior and states that an individual donors utilitydepends on the donation amount, such that higher donationlevels provide additional benefits (Andreoni 1989). Accord-ing to the concept of impure altruism, both altruistic andegoistic donation motives drive an individual donor. Thus,the benefit derived from donation behavior consists of twocomponents: (1) an altruistic dimension, reflecting the ben-efits to society resulting from the total sum donated to thecause, and (2) an egoistic dimension, reflecting the benefits

derived from making the individual feel better about him-or herself (e.g., a feeling of warm glow). Recent empiricalstudies have confirmed the existence of these two compo-nents (Crumpler and Grossman 2008; Videras and Owen2006). In addition, extensions of impure altruism identify afurther egoistic benefit resulting from an increase in repu-tation and/or prestige (Harbaugh 1998; Isaac, Pevnitskaya,and Salmon 2010).

By purchasing a product linked with a social cause, thecustomer implicitly donates money to the cause. Consistent


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with this notion and previous research, we conclude thatthe benefit a transaction-based donation adds to the prod-uct includes the previously outlined altruistic and egois-tic dimensions (Arora and Henderson 2007; Haruvy andPopkowski Leszczyc 2009; Krishna 2011).

HYPOTHESIS DEVELOPMENT

Impact of Donation Amount on WTP

Our first hypothesis pertains to the functional structureof the relationship between donation amount and WTP.According to the concept of impure altruism, an individualdonors utility depends on the donation amount, such thathigher donation levels provide additional benefit indepen-dent of whether the donation motives are altruistic, ego-istic, or both (Andreoni 1989). Specifically, in line withimpure altruism, we assume that there is a concave rela-tionship between donation amount and WTP. In terms ofcontribution to society (altruistic dimension), the sourceof the donation is not an issue, because only the over-all sum donated to the charity matters. Thus, a dona-tion is completely replaceable by other contributions aslong as the total sum given to the cause remains con-

stant. As a result, the higher the donation amount, themore an individual donor prefers that others also con-tribute. Marginal benefits of the persons own purchase-contingent donation therefore decrease in size with increas-ing donation amounts (Andreoni and Miller 2002). Fur-thermore, previous research has shown that the positivefeeling of warm glow resulting from a donation (egoisticbenefit) increases in a positive but nonlinear manner withcontributions (Crumpler and Grossman 2008; Videras andOwen 2006). Thus, we posit that the relationship betweendonation amount and WTP is concave and follows aninverse quadratic trend in cases of both altruistic and ego-istic benefits:

H1: The relationship between the company donation amountand WTP for a product linked with a social cause is pos-

itive and concave.

Donation-Related Customer Predispositions as

Moderating Factors

We propose that the customers attitude toward helpingothers moderates the relationship between donation amountand WTP. This attitude entails global and relatively endur-ing evaluations with regard to helping or assisting otherpeople (Webb, Green, and Brashear 2000, p. 300). A guid-ing principle for the moderating impact of attitude towardhelping others on the donation amountWTP link (as wellas the moderation effects of H3H5) is that a persons

behavior in a given situation hinges on both the expecta-tion of producing specific outcomes and the persons eval-uation of them (e.g., personal importance; Atkinson 1964;Eccles and Wigfield 2002). In this case, the guiding expec-tation depends on the altruistic benefit of helping others.Thus, increasing the donation amount adds to the total sumdonated to the cause, thereby increasing the expectation ofhelping others (Andreoni 1989).

Accordingly, a customer with a strongly held attitudetoward helping others will consider it more important thatothers receive help with higher donation levels. In this case,a higher donation amount leads to greater altruistic benefits

for the customer because he or she perceives it as help-ing the cause more, which in turn leads to greater WTP.With a weaker attitude toward helping others, the cus-tomer cares less about contributing by making a donation.Consequently, a higher donation level leads to a smallerincrease in altruistic benefit (and WTP) for the customer(than for a customer with a strong attitude toward helpingothers). Thus:

H2: The more positive the customers attitude toward helpingothers, the stronger is the impact of the company donation

amount on WTP for a product linked with a social cause.

A customers warm glow motive reflects the customersdesire to feel a warm glow resulting from the prospectof donating to others (Mayo and Tinsley 2009, p. 493),and some people have a stronger predisposition than oth-ers. Similar to our reasoning in H2, we posit that behaviordepends on the expectation of producing a specific out-come and on the evaluation of that outcome. Regarding theexpectation of experiencing a warm glow through purchasebehavior, the feeling is stronger when the persons dona-tion is greater (Andreoni 1989). Therefore, the expectation

of inducing a warm glow should increase with the dona-tion amount.

Thus, when the customers warm glow motive is strong,getting a warm glow feeling is more important, and thismore likely occurs at high donation levels. Furthermore,we expect that this higher warm glow feeling leads tohigher WTP. Previous research provides support for thisnotion, showing that people experiencing positive emotionsare willing to pay more than those in a negative emotioncondition (Heussler et al. 2009) and that affect positivelyinfluences social behaviors, such as helping and generos-ity (Isen 2000). In contrast, when the warm glow motiveis weak, the customer has little motivation to acquire apositive feeling of warm glow from his or her donation.

As a consequence, higher donation levels should result ina smaller increase in (egoistic) customer benefit (comparedwith a customer with a strong warm glow motive). Thus:

H3: The stronger the customers warm glow motive, the

stronger is the impact of the company donation amount

on WTP for a product linked with a social cause.

Cause-Related Customer Predispositions as

Moderating Factors

Cause involvement is the degree to which a customerconsiders a specific category of relief project (e.g., can-cer research) personally relevant (Grau and Folse 2007).As we mentioned previously, behavior depends on the

expectation of producing a specific outcome and on theevaluation of that outcome (Atkinson 1964; Eccles andWigfield 2002). First, higher donation amounts should leadto greater expectations of contributions to the cause. Sec-ond, the evaluation of this expectation should be influ-enced by the customers cause involvement. Specifically,the greater the relevance of the cause, the greater is the cus-tomers concern that the cause benefits from a higher dona-tion (altruistic benefit) and the more the customer receivesa warm glow feeling (egoistic benefit) from donating toa cause about which he or she really cares. Furthermore,increases in altruistic and egoistic benefits lead to higher


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WTP. In contrast, when the cause involvement is low, thecustomer cares less about whether the cause benefits froma high donation. As a consequence, higher donation lev-els should result in a smaller increase in WTP. Therefore,we argue that a customers cause involvement positivelyinteracts with the donation amount to influence WTP for acharity-linked product:

H4: The stronger the customers cause involvement, the

stronger is the impact of the company donation amounton WTP for a product linked with a social cause.

The customers attitude toward a specific nonprofit orga-nization (NPO) reflects his or her cause organization affin-ity (Barone, Norman, and Miyazaki 2007). From researchon outcome expectations and evaluations (Atkinson 1964;Eccles and Wigfield 2002), we argue that the customerscause organization affinity interacts with the expectationthat the increased donation amount creates greater helpfor the cause, thus strengthening the donation amountWTP link.

As we mentioned previously, higher donation amountsshould lead to greater expectations of contributions to

the cause. Furthermore, cause organization affinity shouldinfluence the evaluation of this expectation. Specifically,a customer with a strong cause organization affinity shouldperceive greater altruistic and/or egoistic benefits from sup-porting the cause with higher donation levels. In turn,this should strengthen the relationship between donationamount and WTP. In contrast, a customer with a low causeorganization affinity is not concerned about supporting theNPO, and therefore donation amount should have a weakeffect. Thus:

H5: The greater the customers cause organization affinity, the

stronger is the impact of the company donation amount

on WTP for a product linked with a social cause.

Companycause fit is the overall perceived congruitybetween the sponsored cause and either the company(e.g., mission, products, markets, technologies, attributes)or the brand (e.g., brand concepts, other key associa-tions; Simmons and Becker-Olsen 2006). Consistent withresearch on corporate social responsibility (Bhattacharyaand Sen 2004), donating to a high-fit cause can evoke pos-itive customer reactions toward the company, such as anincrease in choice probability (Lichtenstein, Drumwright,and Braig 2004; Pracejus and Olsen 2004).

However, more studies are needed to examine the mod-erating effect of companycause fit on the relationshipbetween donation amount and WTP. Attribution theory pro-vides useful insights for deriving this moderating effect.

Behavior that is inconsistent with prior expectations stim-ulates motive attribution (Newtson 1974). Therefore, attri-butions should be most relevant when companycause fitis low. Specifically, because low-fit alliances are incon-sistent with expectations about the company (Simmonsand Becker-Olsen 2006), customers should be more likelyto generate attributions and focus on company motives(Becker-Olsen, Cudmore, and Hill 2006). Thus, in cases oflow companycause fit, negative cause-exploitive attribu-tions are more likely to emerge.

When companycause fit and donation amount are bothlow, these cause-exploitative explanations should lower the

perceived benefits of the donation for the customer and, inturn, reduce WTP (Popkowski Leszczyc and Wong 2010).In the case of a low-fit cause and a high donation amount,these negative thoughts can be offset by positive motiveattributions, which result from the high donation amount(Folse, Niedrich, and Grau 2010), and therefore should pro-duce a relatively high WTP.

In contrast, a high companycause fit is consistent withthe customers prior expectations, and therefore he or shehas no need to elaborate on firm motives. Thus, com-pared with the low companycause fit condition, we expecta weaker positive relationship between donation amountand WTP and no substantial impact of elaboration on firmmotives on this link:

H6: The lower the companycause fit, the stronger is the

impact of the company donation amount on WTP for a

product linked with a social cause.

STUDY 1

Study Context and Research Design

Study 1 involves the purchase of a product linked

to cause-related marketing. A key consideration of thestudy was the selection of an attractive product and brandbecause, to test the hypotheses related to WTP, the studyparticipants needed to have at least some desire to buy theproduct; otherwise, WTP would be close to zero for anunattractive product and/or brand. The results of a pretestindicated that cereal bars are a frequently consumed andwell-liked product for the respondent sample. For the spe-cific brand, we selected Corny, a popular brand in the coun-try in which we conducted the study. Bread for the World,a well-known relief fund to support agriculture in ThirdWorld countries, was the charitable recipient. The packag-ing of the cereal bar specified an amount that would bedonated to Bread for the World for each product sold.

We tested our hypotheses using a one-way, within-subjects design, which enabled us to estimate individualWTP curves. Thus, individual subject variance could beremoved from the error terms, thereby increasing estima-tion precision. To investigate the potential nonlinear rela-tionship, we created nine donation amount scenarios. Thisapproach corresponds to previous within-subject designsin cause-related marketing and WTP contexts (Arora andHenderson 2007; Pracejus and Olsen 2004). We also addeda control scenario with no donation. We manipulated thedonation amount from 1 to 40 cents (1, 5, 10, 15, 20, 25,30, 35, 40), in line with previous research suggesting a vari-ation from low to high (e.g., 550 in increments of 5)(Arora and Henderson 2007, p. 527).

Measurement of Key Variables

To measure our key dependent variable, WTP, we fol-lowed the BDM method (Becker, DeGroot, and Marschak1964; see also Homburg, Koschate, and Hoyer 2005;Wertenbroch and Skiera 2002), which eliminates incentivesfor overstating or understating the true maximum WTPand has a high predictive performance. In line with theBDM procedure, the experimenter explained that partici-pants would have an opportunity to purchase a two-pack ofCorny chocolate cereal bars. After each scenario, partici-pants indicated on a paper-and-pencil form the highest price


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they would be willing to pay for the two-pack (they couldnot review their answers to previous scenarios). Partici-pants also were told that at the end of the study, one of tentwo-packs would be randomly selected, with a price deter-mined randomly. If the determined price of the selectedproduct was less than or equal to the participants offer, heor she would be obligated to buy the two-pack cereal barsat the determined price. If the determined price exceeded

the participants bid, he or she would not be allowed to buythe product. Thus, we ensured the incentive compatibilityof the WTP measurement. Note that 12.6% of the sample(n = 13) were not willing to pay a premium for donationsto charity.

Finally, to measure our moderators, we used establishedscales from prior studies, as detailed in the Appendix.A four-item scale measured cause involvement (Grau andFolse 2007), a three-item scale assessed cause organiza-tion affinity (Barone, Norman, and Miyazaki 2007), andan eight-item scale measured perceived companycause fit(Lafferty, Goldsmith, and Hult 2004). Two items (Tauteand McQuitty 2004) and four items (Webb, Green, and

Brashear 2000) measured warm glow motive and attitudetoward helping others, respectively.

Participants and Procedure

Participants were 103 students from a major German uni-versity who took part in the study for course credit. Weconducted the study in groups of 10 to 20 participants. Theexperiment consisted of five sections. The first section pro-vided the introduction and a description of the experiment,including the BDM method used to measure WTP. Thesecond section featured the evaluation of the nine experi-mental scenarios offering two-pack Corny chocolate cerealbars specifying the various donation levels for Bread for

the World, as well as the control scenario (with no dona-tion). The order of the scenarios was random across par-ticipants, and participants provided their WTP after eachscenario.

The third section included the measures for the moder-ators. Thus, in sequence, participants indicated their levelof cause involvement, cause organization affinity, and per-ceived companycause fit, followed by their responses toitems measuring the donation-related customer predispo-sitions of warm glow motive and attitude toward helpingothers. In the fourth section, sociodemographic character-istics were measured as control variables (age, gender, andincome). Preliminary analyses indicated that the three con-trol variables had no influence on the results. Thus, we didnot include them in further analyses.

Finally, in the fifth section, one of the participants ran-domly selected one of the ten two-pack cereal bars bydrawing from an urn. Another participant also randomlydetermined the price of the selected product (with the statedincentive magnitude). The price range was from .70 euro to2 euros with intervals of 5 cents [.70, .75, .80, .85 1.90,1.95, 2.00]. The participants purchased the two-pack choco-late cereal bars at the stated price, and the designated dona-tion amount was actually transferred to the NPO, a steptaken to improve the realism of our experiment.

Results and Discussion

To control for participant effects, we analyzed ourhypotheses with a random coefficient regression model,as follows:

WTPij = b0 + b1DAij + b2DA2ij + b3AHOj + b13DAijAHOj

+ b4WGMj + b14DAijWGMj + b5CauseInvolvj + b15DAij

CauseInvolvj + b6CauseAffinj + b16DAijCauseAffinj

+ b7Fitj + b17DAijFitj + uj + rij

where WTPij is the WTP of the jth individual for theith scenario, DAij represents the amount of donation ofthe jth individual for the ith scenario, AHOj refers tothe customers attitude toward helping others, WGMjis the customers warm glow motive, CauseInvolvj indicatesthe customers perception of the relevance of this type ofrelief project, CauseAffinj represents the customers atti-tude toward the NPO, and Fitj is the companycause fit.Our research model consisted of an individual intercept thatcomprised an overall mean (b0) and the persons deviationfrom that mean (u

j), as well as main linear and quadratic

effects of the donation amount (representing the hypothe-sized concave functional structure of the relationship). Fur-thermore, we integrate the main effects and multiplicativeterms with the donation amount for all hypothesized moder-ating variables (donation- and cause-related customer pre-dispositions). We modeled the slopes as constant across allparticipants. The random error in the ith scenario of the jthindividual is expressed by rij. To estimate the model, werelied on a maximum likelihood method using the MIXEDprocedure in SAS 9.2. The analysis was based on orthog-onal polynomials (for the donation amount) and centeredvariables.

Importantly, all scales showed high internal consistency

in the corresponding reflective indicators. Specifically, aswe detail in the Appendix, the coefficient alpha val-ues exceeded the recommended threshold of .7 (Nunnally1978). Thus, we averaged all the scales to form a com-posite. Furthermore, for each predictor variable of ourfull model, we computed the variance inflation factor.All values were below 10 (maximum of 1.26), indicat-ing the absence of serious multicollinearity. In addition,we checked for the number of inconsistencies in partici-pants specified WTP (i.e., whether a participant specifieda lower WTP for some higher donation amount). Overall,WTP responses were highly consistent. For the nine dona-tion amount scenarios (which appeared in random order),on average, less than one inconsistency (.78) occurred per

participant.For the main effect of the donation amount, the anal-

ysis provides support for H1, which predicts that theamount of the donation positively influences the cus-tomers WTP (b1 = 27, p < 001; see Table 1) with aninverse quadratic trend (b2 = 02, p = 05; for a graph-ical illustration of this effect, see Web Appendix Aat http://www.marketingpower.com/jmr_webappendix). Forthe moderating effects of donation-related customer predis-positions, H2 predicts that the more positive the customersattitude toward helping others, the stronger is the impact ofdonation amount on the customers WTP. In support of this


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Table 1

STUDY 1: RESULTS OF THE RANDOM COEFFICIENT REGRESSION MODEL

Dependent Variable: WTP

2 Log-Likelihood 151960

Coefficient (SE)a

Parameter Effect Solutions for Fixed Effects Hypothesis

b0 Intercept 96 04

b1 Donation amount 27 01 H1

b2 Donation amount2

02 01 H1

Moderators

b3 Attitude toward helping others 08 04

b4 Warm glow motive 02 03

b5 Cause involvement 07 04

b6 Cause organization affinity 05 04

b7 Companycause fit 09 04

Interactions: Donation-Related Customer Predispositions

b13 Donation amountattitude toward helping others 03 01 H2

b14 Donation amountwarm glow motive 03 01 H3

Interactions: Cause-Related Customer Predispositions

b15 Donation amountcause involvement 02 01 H4

b16 Donation amountcause organization affinity 04 01 H5b17 Donation amountcompanycause fit 01 01 H6

Solutions for Random Effects

2 (Variance of uj) 14 02

2 (Variance of rij) 01 00

p 05.p 001.aUnstandardized coefficients are reported with standard errors in parentheses.

hypothesis, the results show that the corresponding param-eter estimate for the interaction effect is positive and sig-nificant (b13 = 03, p < 05). Moreover, the data confirm H3,

which proposes that the impact of the donation amount onWTP is stronger when the customers warm glow motive isstronger (b14 = 03, p < 001). Note that attitude toward help-ing others (M = 509) and the warm glow motive (M = 406)are related but different constructs (r = 23, p < 05).

For the cause-related customer predispositions, H4 andH5 predict that the impact of donation amount on WTP isstronger when the customers cause involvement and causeorganization affinity are higher, respectively. The estimatesfor both interaction terms are positive and significant (b15 =02, p < 05; b16 = 04, p < 001), so the data support bothhypotheses. In addition, the parameter estimate for theinteraction term of companycause fit and donation amountis marginally significant (b17 = 01, p = 08). Thus, thelower the companycause fit, the stronger is the relation-ship between the donation amount and WTP. This resultprovides weak support for H6.

Finally, we calculated the chi-square (or 2 log-likelihood) difference between the full model and a reducedmodel that includes only the linear and quadratic effect ofthe donation amount. We find that model fit significantlyimproves (2 = 11080, p < 001), and thus the results offerfurther support that the impact of the company donationamount on customers WTP depends on donation-relatedand cause-related customer predispositions.

The results of Study 1 support our hypotheses for a pos-itive concave effect of donation amount on WTP. More

important, the results for our moderating effects indi-cate that the donation amountWTP relationship variesacross situations. Specifically, both donation-related (i.e.,

attitude toward helping others and warm glow motive)and cause-related (i.e., cause involvement and cause orga-nization affinity) customer predispositions strengthen theeffect of donation amount on WTP. This result suggeststhe importance of considering these factors when settingdonation levels.

Furthermore, we find a slightly negative moderatingimpact for companycause fit. We hypothesized that thismoderating effect is driven by company motives. However,we did not formally measure and empirically test this pro-cess in Study 1. Furthermore, to the best of our knowledge,no previous study has examined this underlying process.Thus, we designed Study 2 to explore the negative moder-ating impact of fit in more detail.

STUDY 2

The goals of Study 2 are twofold. First, we attemptto validate the negative moderating effect of companycause fit on the relationship between donation amount andWTP in a different product category. Second, we formallydevelop and test two new hypotheses for this effect on thebasis of attributed company motives (see Figure 2).

Hypothesis Development

We previously noted that the donation amount influ-ences the customers attribution of company motives for


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Figure 2STUDY 2: RESEARCH MODEL

Company&ause)it

H7

Willingness to3ay (WTP)

Donation$Pount

Attributed0otives

H8 +

the cause-related marketing campaign (Folse, Niedrich, andGrau 2010). The attribution of company motives refers tothe inferences customers make about reasons for the com-panys donation, such as supporting the cause or helpingsociety. The higher the donation amount, the greater is thebenefit for the cause and the more likely the customer is toattribute positive motives to the company.

As we discussed previously, a low companycause fitshould result in a stronger customer focus on companymotives because of inconsistencies with customer expec-tations (Becker-Olsen, Cudmore, and Hill 2006; Simmonsand Becker-Olsen 2006). Conversely, a high companycause fit does not lead to customer elaboration on companymotives. Thus, the effect of the donation amount on thecustomers attributed company motives should be strongerin cases of low companycause fit than in cases of highcompanycause fit. Therefore:

H7: The lower the companycause fit, the stronger is the

impact of the company donation amount on attributed

company motives.

Furthermore, we expect that the customers motive attri-bution influences his or her behavior toward the com-pany (Becker-Olsen, Cudmore, and Hill 2006; Ellen, Webb,and Mohr 2006). When customers attribute less positivemotives to the company, WTP should be lower than whencustomers attribute more positive motives. Thus, when cus-tomers attribute positive motives to the company, WTPshould be higher than in cases of less positive attributedmotives. Therefore:

H8: Attributed company motives mediate the moderating role

of companycause fit on the donation amount effect on

WTP (mediated moderation).

Study Context and Research Design

The product category for Study 2 was mineral water.The results of a pretest verified that the respondent sam-ple frequently consumes this product category and findsit attractive. This characteristic is important because par-ticipants must have at least some WTP for the product.Study 2 involved a 2 2 between-subjects design and acontrol group with no donation. Thus, we manipulated thecompanys donation amount and the companycause fit ontwo levels (low, high), with 5 cents representing the low and40 cents representing the high donation level. The results

of a pretest determined that the high-fit charity recipientwas a project for the revitalization of a German river. Thelow-fit charity was a society for the prevention of crueltyto animals.

Measurement of Key Variables

As in Study 1, we measured WTP using the BDMmethod. However, this study involved a between-subjectsdesign and assessed WTP for only one product. Three itemsmeasured attributed company motives (Ellen, Webb, andMohr 2006; see the Appendix). We assessed companycause fit in an identical manner to Study 1 and mea-sured perceived level of donation with two items (seethe Appendix). Because the corresponding reflective indi-cators showed adequate internal consistency, we calcu-lated composites for further analyses by averaging all scaleindicators.

Participants and Procedure

Participants were 115 students from a major German

university (91 in the experimental conditions plus 24 in acontrol group) who took part in the study to earn extracourse credit. We conducted the experiment in groups of10 to 20 participants. At the outset, participants read ashort description of the experiment, including the BDMmethod, and then indicated their WTP for a 1.5 liter bot-tle of Gerolsteiner mineral water (with a specific amountof company donation to a specified cause). In addition,they responded to measures for attributed company motivesand for the manipulation check for donation amount andcompanycause fit. They also answered questions pertain-ing to sociodemographic characteristics (which had no sig-nificant effect as covariates) and about the purpose of thestudy (which revealed no problems in this regard). Finally,

the price of the 1.5-liter bottle of Gerolsteiner was deter-mined randomly. Participants purchased the bottle of min-eral water at the stated price, and the designated donationamount was transferred to the specified NPO.

Results and Discussion

Manipulation checks. An analysis of the manipulationcheck measures for donation amount and companycausefit with two 2 2 analyses of variance (ANOVAs) indi-cated that the scenarios influenced the participants rat-ings of both constructs as intended. The high companycause fit scenario resulted in perceptions of a higher fit


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than the low companycause fit scenario independent ofthe donation level (Mlow fit = 329, Mhigh fit = 516; F1 87 =5722, p < 001). In addition, participants perceived 5 centsas a significantly lower donation level than 40 cents(Mlow donation = 365, Mhigh donation = 542; F1 87 = 4884,p < 001).

Test of hypotheses. First, to validate our results regardingH6 (a negative interaction between donation amount and

companycause fit), we employed a 2

2 ANOVA withdonation amount and companycause fit as independentvariables on WTP. The results indicate that this interac-tion was significant (F1 87 = 535, p < 05). As Figure 3shows, the effect of donation amount is stronger in casesof low fit (Mlow donation = 68, Mhigh donation = 100; F1 43 =1803, p < 001) than in cases of high fit (M low donation = 92,Mhigh donation = 97; F1 44 = 30, p = 60). Thus, the resultssupport H6.

Furthermore, we tested the conditions under which adonation increases WTP compared with the no-donationcontrol scenario. The results indicate that compared withthe control group, a donation leads to a significantly higherWTP in all cases except when a low amount is donated to a

low-fit cause (for which the difference was not significant).

Figure 3STUDY 2: MEANS OF WTP DEPENDING ON DONATION

AMOUNT AND COMPANYCAUSE FIT

.68

.92

1.00 .97

.00

.20

.40

.60

.80

1.00

1.20

Low CompanyCause Fit High CompanyCause Fit

WTP()

Low donation amount High donation amount

Table 2STUDY 2: MEDIATION ANALYSIS

Independent Variables

Donation CompanyCause Donation Amount Attributed Attributed Motives

Dependent Variable Amount Fit CompanyCause Fit Motives CompanyCause Fit

1 WTP .09 (.03) .05 (.03) 07 (.03)

2 Attributed motives .31 ( .12) .18 (.12) 31 (.12)

3 WTP .07 (.03) .04 (.03) 04 (.03) .06 (.03) 02 (.03)

p 05.

Notes: Unstandardized coefficients are reported with standard errors in parentheses.

Second, to test whether donation amount affects motiveattributions depending on the level of companycause fit(H7), we conducted a 22 ANOVA of donation amount andcompanycause fit on the customers attributed companymotives. The results indicate that the higher the donationamount, the more positive is the customers motive attri-bution (Mlow donation = 310, Mhigh donation = 373; F1 87 =690, p < 05). In addition, the interaction between dona-tion amount and companycause fit on attributed motivesis significant (F1 87 = 690, p < 05). In cases of lowcompanycause fit, donation amount has a positive impacton attributed motives (Mlow donation = 261, Mhigh donation =386; F1 43 = 1614, p < 001). In cases of high fit,attributed motives are not affected by donation amount(Mlow donation = 359, Mhigh donation = 359; F1 44 = 00, p =100). Furthermore, in cases of low donation amount, lowcompanycause fit leads to the attribution of less posi-tive motives than in a situation of high companycause fit(F1 44= 758, p< 05). A high donation amount, however,leads to a positive motive attribution independent of thelevel of companycause fit (F1 43 = 73, p = 40). Thus,H7 is supported.

Third, to test whether perceived company motives medi-ate the interaction between donation amount and companycause fit on WTP (H8) and, thus, to test the complete modelin Figure 2, we estimated three regression models (Mod-els 13) following Muller, Judd, and Yzerbyt (2005) andused contrast coding (setting low donation amount and lowcompanycause fit as 1 and high donation amount andhigh companycause fit as 1):

WTP = b10 +b11DA+b12Fit+b13DAFit+ e1(1)

Attributed motives = b20 +b21DA+b22Fit+b23DAFit+ e2(2)

WTP = b30 +b31DA+b32Fit+b33DAFit

+ b34 Attributed motives

+ b35Attributed motivesFit+ e3

(3)

The first precondition of mediated moderation is an over-all moderation of the donation amount effect on WTPby companycause fit (i.e., b13 should be nonzero). Fur-thermore, if the mediating process of attributed motivesaccounts for this effect, the moderation of the resid-ual donation amount effect (b33) should be reduced oreliminated compared with the overall moderation. Theresults support these relationships (see Table 2). Thus, forModel 1, the overall effect of donation amount on WTPdepends on companycause fit (b13, p < 05). For Model 2,


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the effect of donation amount on attributed motives is alsomoderated by companycause fit (b23, p < 05). Finally, forModel 3, the effect of the mediator attributed motives onWTP is significant (b34, p < 05) and constant (b35, not sig-nificant [n.s.]), and the residual effect of donation amounton WTP is independent of companycause fit (b33, n.s.,controlling for the mediator). These results indicate thatattributed company motives fully mediate the moderatingimpact of companycause fit on the donation amountWTPlink (Sobel [1982] test, z = 1

68, p

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