Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing...
Transcript of Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing...
![Page 1: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/1.jpg)
Cause Marketing Effectiveness and the Moderating Role of Price Promotions
1
Michelle Andrews, Xueming Luo (Temple U), Zheng Fang (Sichuan U), Jaakko Aspara (AaltoU)
![Page 2: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/2.jpg)
Cause Marketing (CM)
2
![Page 3: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/3.jpg)
Charitable Sponsorship
Stern 2013
Corporate spending
3
![Page 4: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/4.jpg)
What is the Sales Revenue Impact of CM?
• Typical CM effectiveness measures in industry
Impressions generated People helped Dollars raised
4
![Page 5: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/5.jpg)
What is the Sales Revenue Impact of CM?
• Measurements in academic studies:
Koschate-Fischer et al. 2012; Robinson et al. 2012
Hypothetical lab experiment Survey items
5
![Page 6: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/6.jpg)
![Page 7: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/7.jpg)
Research Goal # 1
• Quantify sales-impact of CM via field experiment with
– real firms
– real CM offers
– real purchase/sales data
7
![Page 8: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/8.jpg)
CM Effectiveness
• Opportunity to help others boosts consumers’ pleasant feelings will lead to purchase
Andreoni 1989; Strahilevitz and Myers 1998
P1: CM has a positive impact on the likelihood of consumer purchases.
Purc
hase
like
lihoo
d
Cause marketing
8
![Page 9: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/9.jpg)
Initial Field Experiment Evidence
• CM - movie promotion
• Between-subjects design – CM donation vs. No donation
• SMS promoting movie tickets to 11,794 mobiles– Conducted with world’s largest wireless providers & IMAX theater– Large city
9
![Page 10: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/10.jpg)
CM Manipulation
• CM donation condition– SMS began “To participate in [wireless provider’s] charitable
activities of helping newly-admitted poor college students,”
• No donation condition– Same message without the donation text
10
![Page 11: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/11.jpg)
SMS MessageCM No CM
11
![Page 12: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/12.jpg)
Purchase incidence
• DV: Choice share of the decision to buy tickets or not
• 901 of 11,794 users downloaded app and bought tickets = 7.64%
12
![Page 13: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/13.jpg)
Model 1 Model 2Cause Marketing (CM)
Treatment Effects.658***
Ln(ARPU) .036 .034Ln(MOU) -.078** -.079**Ln(SMS) .029 .021 Ln(GPRS) .213*** .227***Theater Effects Yes YesChi-Square 1,018.672 1,212.587Cox & Snell R-square .116 .173Nagelkerke R-square .425 .495Observations 11,794 11,794
Evidence: CM Promotions
13
![Page 14: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/14.jpg)
Research Goal # 2
Today, firms increasingly combine price promotions with CM donations!
Today: 15% off -- $5 to charity per shopper
14
![Page 15: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/15.jpg)
Research Goal # 2
• Investigate how price discounts moderate CM effectiveness
– Do price discounts amplify or attenuate the impact of CM on consumer purchase?
15
![Page 16: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/16.jpg)
Moderating Role of Price Discounts
• Increasing discounts from zero to moderate → Licensing
– Discounting price & sacrificing revenue = firm effort consumers feel gratitude and reward firm
– Amplifies CM’s impact on good feelings
Gneezy and List 2013; Morales 2005; Palmatier et al. 200916
![Page 17: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/17.jpg)
Moderating Role of Price Discounts
• Increasing discounts from moderate to deep → Stymie
– Consumers may perceive their actions are not about doing good, but doing well
feel robbed of good feelings from CM
– Attenuates CM’s impact on good feelings
Benabou and Tirole 2006; Fiske and Tetlock 199717
![Page 18: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/18.jpg)
Moderating Role of Price Discounts
P2: The impact of CM on consumer purchases is moderated by price discounts in an inverted-U shape: this impact is highest at a moderate (rather than at a too deep or zero) price discount level.
Purc
hase
like
lihoo
d
Cause marketingx
Price discount:zero moderate deep
18
• Complicated interaction
![Page 19: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/19.jpg)
More Field Experiment Evidence
• Between-subjects design: 2 (CM amount: none, 5 RMB) x 3 (Discount: none, moderate = 30% off, deep = 50% off)
• 267 of 5,828 users downloaded app and bought tickets = 4.58%
19
![Page 20: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/20.jpg)
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
No CM Amount of CM
Purc
hase
Inci
denc
e
No discount
ModeratediscountDeep discount
• Moderate price discounts reinforce the effectiveness of CM donations• Deep price discounts reduce the effectiveness of CM donations
![Page 21: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/21.jpg)
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
No CM Amount of CM
Purc
hase
Inci
denc
e
Zero discount
Moderate discount
Deep discount
CM x Price Discounts
21
![Page 22: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/22.jpg)
Model 3 Model 4 Model 5CM x PD1 -.329***CM x PD2 -.215**Cause Marketing (CM)
Treatment Effects.608*** .936***
Price Discountmoderate vs zero (PD1) -.408*** -.405***Price Discountmoderate vs deep (PD2) .342** .337**Ln(ARPU) .028 .025 .026Ln(MOU) -.071** -.072** -.076**Ln(SMS) .023 .021 .022Ln(GPRS) .233** .235** .232**Theater Effects Yes Yes YesChi-Square 781.049 894.450 926.612Cox & Snell R-square .106 .178 .189Nagelkerke R-square .412 .482 .495Observations 5,828 5,828 5,828
Evidence: Moderating Role of Price Discounts
22
![Page 23: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/23.jpg)
CM & Moderate discounts help the firm & the charity!
0
0.5
1
1.5
2
2.5
No CM donation Amount of CM donation
Firm Sales Revenues per
Offer Sent ($, net of
discounts and charity
proceeds)
No discountModerate discountDeep discount
0
0.1
0.2
0.3
0.4
0.5
No CM donation Amount of CM donation
Money to Charity per Offer Sent
($)
No discountModerate discountDeep discount
23
![Page 24: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/24.jpg)
Robustness and Mechanism
• Experimental design– New app (prior purchase experience)– 1 non-Blockbuster movie (target audience)– 4 theaters (location effects)– Randomization (available spending money)
• 2 possible mechanisms:– Skepticism (Corporate motives/service quality)– Good feelings
24
![Page 25: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/25.jpg)
The Mediating Role of Warm Glow Good Feelings
• Consumers motivated by good feelings from helping Experimental design– Moderate discounts produce synergy with CM (license effect)– Deep discounts can induce consumers to perceive act is about
doing well
Andreoni 1989; Strahilevitz 1999
Cause MarketingX
Price DiscountsGood Feelings Purchase Intent
P3: Consumers’ warm-glow good feelings mediate the inverted-U shaped impact of CM on purchases across the zero, moderate, and deep price discounts25
![Page 26: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/26.jpg)
Lab Experiment: Underlying Mechanism
• Same cinema & charity deal as field experiements
• Independent variables:– Good feelings– Purchase intention
• Between-subjects design:2 CM (No CM vs. 5RMB)x 3 (discount level: 35% vs. 50% vs. 65% off)
• 426 undergraduates
26
![Page 27: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/27.jpg)
Lab Experiment Survey Items
• Good feelings (adapted from Taute and Mcquitty 2004)– “I would feel good if I purchased this charity-related deal”
• Purchase intention– How likely would you purchase this deal today?
• Demographics
27
![Page 28: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/28.jpg)
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
9
No CM Amount of CM
Purc
hase
Inte
ntio
n
Zero discount
Moderate discount
Deep discount
Results on the Moderating Role of Price Discounts
28
![Page 29: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/29.jpg)
3
4
5
6
7
8
9
Amount of CM
War
m-G
low
Goo
d Fe
elin
gsZero discount
Moderate discount
Deep discount
Mediating Role of Warm-Glow Good Feelings
CM Amount with zero discount vs.
moderate discount -.635***
-.492**
.647***Warm-Glow Good Feelings
Intention to Purchase
CM Amount with deep discount vs.
moderate discount
p < .01p < .01
29
![Page 30: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/30.jpg)
Overall Key Findings
• CM is effective– Is most effective with moderate (vs. deep or no) discounts
• Deep discounts dampen consumers’ good feelings Accounts for underlying mechanism
30
![Page 31: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/31.jpg)
Contributions
1. Demonstrates CM effects in actual field setting
2. Reveals interaction between price discounts and CM
3. Shows effect sizes and psychological mechanisms
31
![Page 32: Cause Marketing Effectiveness and the Moderating Role of Price …€¦ · Cause Marketing Effectiveness and the Moderating Role of Price Promotions 1 Michelle Andrews, Xueming Luo](https://reader033.fdocuments.us/reader033/viewer/2022050417/5f8d3f4d368c8d2aba6a8605/html5/thumbnails/32.jpg)
Managerial Implications
• Moderate price discounts & CM = Win for all parties – Marketers (pleasant surprise: more bang with smaller buck)– Charity (earn more donations [as well as consumer exposure])– Customers (others’ value and savings)
• Good news: managers can save promotional $ and boost demand, while increasing the pie for charities
32