Advertisement

Journal of the Academy of Marketing Science

, Volume 44, Issue 5, pp 608–626 | Cite as

When will price increases associated with company donations to charity be perceived as fair?

  • Nicole Koschate-Fischer
  • Isabel V. Huber (née Stefan)
  • Wayne D. Hoyer
Original Empirical Research

Abstract

When implementing cause-related marketing campaigns, companies sometimes increase prices to partially cover some of the costs of the campaign. However, our knowledge regarding the conditions under which consumers perceive these increases as fair and are willing to bear some of the costs is lacking. Using a framework based on attribution theory principles, we show in four studies that the company donation amount positively affects consumers’ perceived price fairness and purchase intentions. More importantly, our study highlights a positive moderating impact of the company’s corporate social responsibility (CSR) reputation and a negative moderating effect of company–cause fit on the donation amount–perceived price fairness relationship. The timing of the price increase also plays a key moderating role on this link. All four studies also provide insights into the underlying process of these moderating effects in terms of attributed company motives.

Keywords

Cause-related marketing Donation amount Price fairness Motive attribution 

Notes

Acknowledgments

The authors thank Ty Henderson and Kent Monroe for their helpful comments on previous drafts of the paper and GfK, especially Raimund Wildner, for providing support in acquiring the data for Study 2.

References

  1. Alcañiz, E. B., Cáceres, R. C., & Pérez, R. C. (2010). Alliances between brands and social causes: the influence of company credibility on social responsibility image. Journal of Business Ethics, 96(2), 169–186.CrossRefGoogle Scholar
  2. Arora, N., & Henderson, T. (2007). Embedded premium promotion: why it works and how to make it more effective. Marketing Science, 26(4), 514–531.CrossRefGoogle Scholar
  3. Barone, M. J., Miyazaki, A. D., & Taylor, K. A. (2000). The influence of cause related marketing on consumer choice: does one good turn deserve another? Journal of the Academy of Marketing Science, 28(2), 248–262.CrossRefGoogle Scholar
  4. Barone, M. J., Norman, A. T., & Miyazaki, A. D. (2007). Consumer response to retailer use of cause-related marketing: is more fit better? Journal of Retailing, 83(4), 437–445.CrossRefGoogle Scholar
  5. Becker-Olsen, K. L., Cudmore, A. B., & Hill, R. P. (2006). The impact of perceived corporate social responsibility on consumer behavior. Journal of Business Research, 59(1), 46–53.CrossRefGoogle Scholar
  6. Bolton, L. E., & Alba, J. W. (2006). Price fairness: good and service differences and the role of vendor costs. Journal of Consumer Research, 33(2), 258–265.CrossRefGoogle Scholar
  7. Bolton, L. E., Keh, H. T., & Alba, J. W. (2010). How do price fairness perceptions differ across culture? Journal of Marketing Research, 47(3), 564–576.CrossRefGoogle Scholar
  8. Campbell, M. C. (1999). Perceptions of price unfairness: antecedents and consequences. Journal of Marketing Research, 36(2), 187–199.CrossRefGoogle Scholar
  9. Campbell, M. C. (2007). Says who?! How the source of price information and affect influence perceived price (un)fairness. Journal of Marketing Research, 44(2), 261–271.CrossRefGoogle Scholar
  10. Chang, C.-T. (2008). To donate or not to donate? Product characteristics and framing effects of cause-related marketing on consumer purchase behavior. Psychology & Marketing, 25(12), 1089–1110.CrossRefGoogle Scholar
  11. Dahl, D. W., & Lavack, A. M. (1995). Cause-related marketing: impact of size of corporate donation and size of cause-related promotion on consumer perceptions and participation. In D. W. Stewart & N. J. Vilcassim (Eds.), Winter educators’ conference: Marketing theory and applications, 6 (pp. 476–481). Chicago: American Marketing Association.Google Scholar
  12. Dodds, W. B., Monroe, K. B., & Grewal, D. (1991). Effects of price, brand, and store information on buyers’ product evaluations. Journal of Marketing Research, 28(3), 307–319.CrossRefGoogle Scholar
  13. Ellen, P. S., Webb, D. J., & Mohr, L. A. (2006). Building corporate associations: consumer attributions for corporate socially responsible programs. Journal of the Academy of Marketing Science, 34(2), 147–157.CrossRefGoogle Scholar
  14. Folkes, V. S. (1988). Recent attribution research in consumer behavior: a review and new directions. Journal of Consumer Research, 14(4), 548–565.CrossRefGoogle Scholar
  15. Folse, J. A. G., Niedrich, R. W., & Grau, S. L. (2010). Cause-relating marketing: the effects of purchase quantity and firm donation amount on consumer inferences and participation intentions. Journal of Retailing, 86(4), 295–309.CrossRefGoogle Scholar
  16. Gilovich, T. (1983). Biased evaluation and persistence in gambling. Journal of Personality and Social Psychology, 44(6), 1110–1126.CrossRefGoogle Scholar
  17. Grau, S. L., & Folse, J. A. G. (2007). Cause-related marketing (CRM). Journal of Advertising, 36(4), 19–33.CrossRefGoogle Scholar
  18. Haruvy, E., & Popkowski Leszczyc, P. T. (2009). Bidder motives in cause-related auctions. International Journal of Research in Marketing, 26(4), 324–331.CrossRefGoogle Scholar
  19. Hastie, R. (1984). Causes and effects of causal attribution. Journal of Personality and Social Psychology, 46(1), 44–56.CrossRefGoogle Scholar
  20. Haws, K. L., & Bearden, W. O. (2006). Dynamic pricing and consumer fairness perceptions. Journal of Consumer Research, 33(3), 304–311.CrossRefGoogle Scholar
  21. Hayes, A. F. (2013). Introduction to mediation, moderation, and conditional process analysis. New York: The Guilford Press.Google Scholar
  22. Henderson, T., & Arora, N. (2010). Promoting brands across categories with a social cause: implementing effective embedded premium programs. Journal of Marketing, 74(6), 41–60.CrossRefGoogle Scholar
  23. Homburg, C., Hoyer, W. D., & Koschate, N. (2005). Customers’ reactions to price increases: do customer satisfaction and perceived motive fairness matter? Journal of the Academy of Marketing Science, 33(1), 36–49.CrossRefGoogle Scholar
  24. Jones, E. E., & Davis, K. E. (1965). From acts to dispositions: The attribution process in person perception. In L. Berkowitz (Ed.), Advances in experimental social psychology (2nd ed., pp. 219–266). New York: Academic.Google Scholar
  25. Kelley, H. H., & Michela, J. L. (1980). Attribution theory and research. Annual Review of Psychology, 31, 457–501.CrossRefGoogle Scholar
  26. Koschate-Fischer, N., Stefan, I. V., & Hoyer, W. D. (2012). Willingness to pay for cause-related marketing: the impact of donation amount and moderating effects. Journal of Marketing Research, 49(6), 910–927.CrossRefGoogle Scholar
  27. Krishna, A., & Rajan, U. (2009). Cause marketing: spillover effects of cause-related products in a product portfolio. Management Science, 55(9), 1469–1485.CrossRefGoogle Scholar
  28. Kukar-Kinney, M., Xia, L., & Monroe, K. B. (2007). Consumers’ perceptions of the fairness of price-matching refund policies. Journal of Retailing, 83(3), 325–337.CrossRefGoogle Scholar
  29. Lafferty, B. A., Goldsmith, R. E., & Hult, G. T. M. (2004). The impact of the alliance on the partners: a look at cause-brand alliances. Psychology & Marketing, 21(7), 509–531.CrossRefGoogle Scholar
  30. Lichtenstein, D. R., Drumwright, M. E., & Braig, B. M. (2004). The effect of corporate social responsibility on customer donations to corporate-supported nonprofits. Journal of Marketing, 68(4), 16–32.CrossRefGoogle Scholar
  31. Luo, X., & Bhattacharya, C. B. (2006). Corporate social responsibility, customer satisfaction, and market value. Journal of Marketing, 70(4), 1–18.CrossRefGoogle Scholar
  32. Martin, W. C., Ponder, N., & Lueg, J. E. (2009). Price fairness perceptions and customer loyalty in a retail context. Journal of Business Research, 62(6), 588–593.CrossRefGoogle Scholar
  33. Maxwell, S. (2002). Rule-based price fairness and its effect on willingness to purchase. Journal of Economic Psychology, 23(2), 191–212.CrossRefGoogle Scholar
  34. Muller, D., Judd, C. M., & Yzerbyt, V. Y. (2005). When moderation is mediated and mediation is moderated. Journal of Personality & Social Psychology, 89(6), 852–863.CrossRefGoogle Scholar
  35. Nan, X., & Heo, K. (2007). Consumer responses to corporate social responsibility (CSR) initiatives. Examining the role of brand-cause fit in cause-related marketing. Journal of Advertising, 36(2), 63–74.CrossRefGoogle Scholar
  36. Newtson, D. (1974). Dispositional, inference from effects of actions: effects chosen and effects forgone. Journal of Experimental Social Psychology, 10(5), 489–496.CrossRefGoogle Scholar
  37. Nunnally, J. C. (1978). Psychometric theory (2nd ed.). New York: McGraw-Hill.Google Scholar
  38. Popkowski Leszczyc, P. T., & Rothkopf, M. H. (2010). Charitable motives and bidding in charity auctions. Management Science, 56(3), 399–413.CrossRefGoogle Scholar
  39. Pracejus, J. W., & Olsen, G. D. (2004). The role of brand/cause fit in the effectiveness of cause-related marketing campaigns. Journal of Business Research, 57(6), 635–640.CrossRefGoogle Scholar
  40. Pracejus, J. W., Olsen, G. D., & Brown, N. R. (2004). On the prevalence and impact of vague quantifiers in the advertising of cause-related marketing (CRM). Journal of Advertising, 32(4), 19–28.CrossRefGoogle Scholar
  41. Robinson, S. R., Irmak, C., & Jayachandran, S. (2012). Choice of cause in cause-related marketing. Journal of Marketing, 76(4), 126–139.CrossRefGoogle Scholar
  42. Roy, D. P. (2010). The impact of congruence in cause marketing campaigns for service firms. Journal of Services Marketing, 24(3), 255–263.CrossRefGoogle Scholar
  43. Samu, S., & Wymer, W. (2009). The effect of fit and dominance in cause marketing communications. Journal of Business Research, 62(4), 432–440.CrossRefGoogle Scholar
  44. Sen, S., & Bhattacharya, C. B. (2001). Does doing good always lead to doing better? Consumer reactions to corporate social responsibility. Journal of Marketing Research, 38(2), 225–243.CrossRefGoogle Scholar
  45. Sen, S., Bhattacharya, C. B., & Korschun, D. (2006). The role of corporate social responsibility in strengthening multiple stakeholder relationships: a field experiment. Journal of the Academy of Marketing Science, 34(2), 158–166.CrossRefGoogle Scholar
  46. Shanks, D. R., Pearson, S. M., & Dickinson, A. (1989). Temporal contiguity and the judgement of causality by human subjects. The Quarterly Journal of Experimental Psychology B: Comparative and Physiological Psychology, 41(2-B), 139–159.Google Scholar
  47. Simmons, C. J., & Becker-Olsen, K. L. (2006). Achieving marketing objectives through social sponsorships. Journal of Marketing, 70(4), 154–169.CrossRefGoogle Scholar
  48. Singh, S., Kristensen, L., & Villaseñor, E. (2009). Overcoming skepticism towards cause related claims: the case of norway. International Marketing Review, 26(3), 312–326.CrossRefGoogle Scholar
  49. Skarmeas, D., & Leonidou, C. N. (2013). When consumers doubt, watch out! The role of CSR skepticism. Journal of Business Research, 66(10), 1831–1838.CrossRefGoogle Scholar
  50. Strahilevitz, M. (1999). The effects of product type and donation magnitude on willingness to pay more for a charity-linked brand. Journal of Consumer Psychology, 8(3), 215–241.CrossRefGoogle Scholar
  51. Strahilevitz, M. (2003). The effects of prior impressions of a firm’s ethics on the success of a cause-related marketing campaign: do the good look better while the bad look worse? Journal of Nonprofit & Public Sector Marketing, 11(1), 77–92.CrossRefGoogle Scholar
  52. Swaminathan, V., & Moorman, C. (2009). Marketing alliances, firm networks, and firm value creation. Journal of Marketing, 73(5), 52–69.CrossRefGoogle Scholar
  53. Vlachos, P. A., Tsamakos, A., Vrechopoulos, A. P., & Avramidis, P. K. (2009). Corporate social responsibility: attributions, loyalty, and the mediating role of trust. Journal of the Academy of Marketing Science, 37(2), 170–180.CrossRefGoogle Scholar
  54. Wasserman, E. A., & Neunaber, D. J. (1986). College students’ responding to and rating of contingency relations: the role of temporal contiguity. Journal of the Experimental Analysis of Behavior, 46(1), 15–35.CrossRefGoogle Scholar
  55. Webb, D. J., & Mohr, L. A. (1998). A typology of consumer responses to cause-related marketing: from skeptics to socially concerned. Journal of Public Policy & Marketing, 17(2), 226–238.Google Scholar
  56. Weiner, B. (1992). Human motivation: Metaphors, theories and research. Newbury Park: Sage Publications.Google Scholar
  57. Westberg, K., Pope, N. (2005). An examination of cause-related marketing in the context of brand attitude, purchase intention, perceived fit and personal values. Paper presented at the Australian New Zealand Marketing Academy Conference, Fremantle, Australia.Google Scholar
  58. Wong, P. T., & Weiner, B. (1981). When people ask ‘why’ questions, and the heuristics of attributional search. Journal of Personality and Social Psychology, 40(4), 650–663.CrossRefGoogle Scholar
  59. Xia, L., Monroe, K. B., & Cox, J. L. (2004). The price is unfair! A conceptual framework of price fairness perceptions. Journal of Marketing, 68(4), 1–15.CrossRefGoogle Scholar
  60. Xia, L., Kukar-Kinney, M., & Monroe, K. B. (2010). Effects of consumers’ efforts on price and promotion fairness perceptions. Journal of Retailing, 86(1), 1–10.CrossRefGoogle Scholar
  61. Zaichkowsky, J. L. (1985). Measuring the involvement construct. Journal of Consumer Research, 12(3), 341–352.CrossRefGoogle Scholar

Copyright information

© Academy of Marketing Science 2015

Authors and Affiliations

  • Nicole Koschate-Fischer
    • 1
  • Isabel V. Huber (née Stefan)
    • 1
  • Wayne D. Hoyer
    • 2
  1. 1.University of Erlangen-NurembergNurembergGermany
  2. 2.McCombs School of BusinessUniversity of Texas at AustinAustinUSA

Personalised recommendations