Survey: Cause Marketing’s Unintended Consequences

Discussion
Apr 26, 2011

A study of 300 college students by a professor at the University
of Michigan shows that cause related marketing programs had the effect of reducing
the amount of money these consumers gave to charity.

"Consumers may think of the firm’s donation as theirs since it is facilitated
by their act — in fact, this type of thinking is ‘rational’ since it allows
consumers to spend less to meet their donation goals," said Aradhna Krishna,
the Dwight F. Benton professor of marketing at UM. "This suggests that
even if cause-marketing purchases are costless, consumers think of their purchase
as a charitable act and decrease subsequent acts. The higher the cause-marketing
expenditure, the lower was the individual charitable giving."

The same
programs also seem to leave consumers less happy with their charitable giving.

"Consumers appear to realize that participating in cause marketing is
inherently more selfish than direct charitable donation, reducing their subsequent
happiness (versus a direct donation)," said Prof. Krishna. "Unfortunately,
this doesn’t prevent them from substituting it for charitable giving, which
reduces the overall charitable donation."

While Prof. Krishna’s research
provides some evidence of unintended consequences, cause related programs continue
to be popular with marketers and consumers.

According to Cone’s 2010
Cause Evolution Study
:


  • Eighty-three percent of consumers want more of what they buy to benefit
    causes;
  • Eighty-five percent have a more positive view of companies engaged in cause
    related marketing efforts;
  • Eighty percent are likely to switch brands assuming all other attributes
    are equal.

 

Discussion Questions: Are cause marketing programs still as effective as in the past or has the sheer number of these programs reduced their effectiveness? Should the research by Aradhna Krishna raise any red flags for marketers?

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10 Comments on "Survey: Cause Marketing’s Unintended Consequences"


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Max Goldberg
Guest
10 years 21 days ago

Is a test of 300 college students applicable to all consumers? No. This study garnered a lot of publicity, but one has to question if the results should be extrapolated into the mainstream consumer market. Cone’s study would seem to be more indicative of overall consumer behavior.

It could be argued that when everyone is doing cause-related programs, they are no longer special. And this proliferation should concern brand marketers.

Anne Howe
Guest
10 years 21 days ago

I think the reason the study should give marketers a bit of a headache is that one could easily believe the behavior of 300 college students might be indicative of the broader Gen Y demographic in total. More research is needed, for sure!

But, if I were a marketer planning more cause-related efforts geared to Gen Y audiences, I’d be talking to researchers about mitigating risk by testing concepts on a broader basis before rolling into the marketplace. This study of 300 is not the whole picture, but where there is smoke….

Ryan Mathews
Guest
10 years 21 days ago
I totally agree with Max and Anne–300 college students do not a cohort make, let alone a national trend. Gen Yers have unique challenges when it comes to cause marketing. For many of them charity begins at home–out of necessity in a world of “right sizing,” pay freezes and financial instability. Combine this with the “cause of the day” environment bolstered by everyone from mass media to iTunes and you can easily see the potential roots for generational “participation fatigue.” Moving beyond college students for a moment there is also the broader issue of tangible results. Many cash strapped, or at the very least cash constrained, American households may be looking past the good karma of supporting their favorite cause to the bottom line effectiveness of their contributions–whether direct or indirect through a cause marketing effort. Many are still homeless in Haiti; the whales are still being hunted by the Japanese; hunger and access to medical care are still issues in the United States; and the environment is still being attacked on all sides. So,… Read more »
Mark Burr
Guest
10 years 21 days ago

Ah, the highly impressionable, idealistic, altruistic college student mind set. As a college student parent, one of my observations is that there is a significant difference between spending someone such as mom’s and dad’s money versus their own money. Nevertheless, it’s money still spent.

The problem with the whole concept is the last finding of ‘all things being equal’. All things are not equal. I can also tell you from my experience as a college student parent, that it’s one particular segment where price will win over ideology–every time. Feeling good is one thing. However, being able to eat next week is another. Knowing Ann Arbor well, I can also attest to this small sample of 300 in an environment such as A2 would not be something I would stake my business strategy upon.

Go Blue!

Tony Orlando
Guest
10 years 21 days ago

There are way too many cause marketing programs today, and consumers don’t like being pestered every time they make a purchase. I’ve had customers who complain to me about being harassed in banks, and other retail outlets at the checkout to donate money to various causes. I am not against charitable causes, as I have several I support, BUT there is a way to do it, without the guilt trip at the checkout or the bank teller trying to hustle you when you cash you hard earned paycheck.

Be discreet, the word gets around, and people will more readily give you something for your cause.

Gene Detroyer
Guest
10 years 21 days ago

The highlight in this study is that of the generation. This generation is considerably savvier and less trusting of marketing efforts than my baby boomer generation. While we olders may see cause related marketing as something good that the companies are doing, Gen X and Y know it is ultimately self-serving. Be careful, marketers. There are big changes coming as this generation moves to the leadership position in consumer purchases.

Craig Sundstrom
Guest
10 years 21 days ago

I share everyone else’s concern about extrapolating these results (although the actual story is ambiguous as to what “involved” means), but even if they’re true, my bigger question is: so what? Claims of lofty goals aside, the primary objective of these co-branding efforts is actually to sell more products…and nothing presented here suggests they don’t.

Anne Howe
Guest
10 years 21 days ago

Gene’s last two sentences are the ultimate summary of what marketers should be attuned to in the future. Gen Y already is a different breed and marketers who think otherwise need to pay attention and to better, deeper homework.

Jonathan Marek
Guest
10 years 21 days ago

Fascinating idea. I wonder if an intrepid retailer would be willing to test this, either directly through their loyalty program or in a couple markets, in conjunction with an academic, in a true test-and-control study. From the retailer’s standpoint, they could measure effectiveness of cause-based marketing versus other messaging. The academic could use opt-in consumers in the loyalty program to assess the charitable giving angle, as well as the consumer’s perceptions about their giving.

Odonna Mathews
Guest
Odonna Mathews
10 years 17 days ago

I’d like to see a deeper dive into the statistics on this study. I’d also like to see a larger population group to study from.

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