Cause Related Marketing Does CRM

Cause Related Marketing

Does CRM Impact Brand Imaging in a Positive Manner: An Analysis of Historical Data

In recent years cause related marketing has more and more become the norm for businesses interested in improving their bottom line. This intent of this literature review is to examine cause related marketing from a business perspective, in order to determine what exactly cause related marketing is and what relationship exists if any between cause related marketing and brand imaging. Specifically, the researcher intends to determine whether CRM is a successful tool for enhancing brand image and thus public opinion of a corporation's products and/or services.

The first part of the literature review will examine cause related marketing from an operational perspective in an attempt to define what exactly cause related marketing is and how it is defined within the industry. The next segment will specifically explore cause related marketing with respect to branding, in an attempt to discern whether CRM has an overall positive effect on brand imaging. From the information acquired in the literature review the researcher will draw conclusions that are logical and grounded in the available research related to the subject.

CRM: Defined and Analyzed

To understand how cause related marketing is related to brand marketing one must first understand what exactly cause related marketing entails. Brown, Olsen & Pracejus (2003) define cause related marketing as a technique whereby "the contribution of the advertiser to a cause is linked to the customers' engaging in revenue producing transactions with the firm" (19; from Varadarajan & Menon, 1988: 60). Cause related marketing is increasingly a popular trend in marketing, resulting in more than seven hundred million dollars per year in promotion expenditures in the United States alone (Brown, Olsen & Pracejus, 2003; IEG, 2001).

Kelley & Kowalczyk (2003) define the practice of cause related marketing as a process of "formulating and implementing marketing activities that are characterized by contributed a specific amount to a designated effort that causes customers to engage in revenue providing exchanges" (p. 15). Cause related marketing strategies serve corporations in a number of ways, allowing them to justify donations, utilize fewer resources, differentiate products and services among other things (Keeley & Kowalcyzk, 2003:15).

Thus one might define cause related marketing as a synergistic relationship that exists between a nonprofit or a specific 'cause' and an organization. Both the 'cause' and the corporation have the ability to benefit from such a relationship with regard to consumer interest and branding (Kelley & Kowalczyk, 2003: 15).

Cause related marketing is often considered a "win proposition" because the sponsoring brand and the cause generally are considered to benefit through this type of venture (Kelley & Kowalczyk, 2003: 15).

Cause related marketing has in fact been cited as the "fastest growing segment in advertising" (Kelley & Kowalczyk, 2003).

With regard to enhancing brand image, cause marketing has benefits for organizations and the corporations that sponsor them by enabling cost effective advertising, by improving business relationships and customer perceptions, by enhancing merchandising opportunities and by allowing organizations to demonstrate "product attributes" at sponsored events (Kelley & Kowalczyk, 2003: 15).

Cause related marketing allows a commercial partnership with a charity to assist companies with their marketing and business objectives (NSPCC, 2002). Research suggests that more than 86% of consumers are more likely to buy a product associated with a cause when price and quality are on in the same, and the same percentage of consumers also report that they have a more positive 'brand image' when they see that a brand of product has something to do with a cause that is meaningful (NSPCC, 2002).

Other statistics and studies also show that cause related marketing is increasingly being used to promote brand recognition within companies. In a 2004 study conducted by the Center for Corporate Citizenship and the U.S. Chamber of Commerce, U.S. business executives reported that they see corporate citizenship as not something fleeting, but rather a "fundamental part of business" in the U.S. (Fogel, 2005).

In addition to this more than 82% of corporations reported that engaging in cause related marketing associated with good "corporate citizenship" enhances the bottom line and helps facilitate knowledge of brands and products (Fogel, 2005).

In another study supported by Research International, more than 6,000 consumers were surveyed regarding their perceptions of companies and brands based on key measures related to cause marketing. The study showed that more than 98% of consumers are aware of cause related programs, and that consumer awareness of brand names associated with cause related marketing programs are growing substantially, up to 84% compared with just 8% in 2000 (Holmes, 2004).

Cause related marketing was also shown to have a positive impact on consumer behavior. In the same survey 48% of consumers changed there behavior, namely by switching brands or increasing usage of a particular brand when the brand was associated with a particular cause (Holmes, 2004). 46% of these consumers also reported that their perceptions of the brand and company were improved through cause related marketing measures.

These studies suggest that cause related marketing can help businesses and charities "build and enhance their brands" (Holmes, 2004). Brand affinity with consumers is improved, and awareness of cause related marketing generally has resulted in consumers consistently rating businesses and brands higher on brand affinity "statements of trust, innovation, endorsement and branding" (Holmes, 2004).

Pringle & Thompson (2000) note that cause related marketing programs can help consumers become more familiar with brands and become more loyal to one brand vs. another. In fact there research point out that more consumers are likely to purchase a particular brand or associate with a particular product, and continue to do so over a long period of time if that product is associated with a just cause. The researchers have also suggested that cause related marketing is one of the most powerful mediums for enhancing brand image, and have helped organizations incorporate their brands into a consumer's lifestyle by allowing human personification of products (Pringle & Thompson, 2000:20). This suggests that consumers are looking for products and services that 'mean' something, or that add value to individuals, whether that value is personal or beneficial to society as a whole.

There is also a strong body of evidence suggesting that cause related marketing strategies will continue to blossom and grow in upcoming years, both in the United States and abroad (Westberg, 2004). Research supports the notion that there is adequate consumer support for the concept of cause related marketing, however there is little research that has been conducted that specifically has outlined the effectiveness of the strategy particularly "when compared with other strategies" (Westburg, 2004: 1), suggesting a need exists for further investigation into this area of study. This research may help fill the gap that currently exists in the research body with regard to cause related marketing, by pointing out a more definitive relationship between CRM and branding.