Dissertation on the Use of Cause Marketing

THE USE OF CAUSE MARKETING & THE

MEDIATING EFFECT OF PUBLICITY ON

CUSTOMER RETENTION

By

EHIAGHE RITA OMOVBUDE

PAU/SMC/PT3/110030

A dissertation submitted to the School of Media and Communication, Pan-Atlantic

University in partial fulfillment of the requirements for the award of the degree of

Master of Science of Pan-Atlantic University

July 2013.

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ABSTRACT

The overall goal of this research is to find out how Cause-‐Related Marketing

influences Customer Retention of a highly publicised brand. This was answered both

conceptually and empirically. Based on the circuit of power theory, the model of the

relationship between Cause Marketing and Customer Retention was developed

thereby generating seven hypotheses. A semi-‐inductive approach in the form of

mixed method was used to conduct the research. Interviews were conducted

between seven Public Relations Managers of over four years of practice, this was

audio recorded and analysed manually. Findings from the interviews therefore,

informed the design of the questionnaire for quantitative analysis and hypotheses

testing. Out of one hundred and twenty questionnaires distributed between

Marketing and Marketing Communications Practitioners, ninety-‐two responded and

using Chi-‐square to test each of the seven hypotheses against responses from the

questionnaire, significant levels of relationships were derived, therefore making the

hypotheses acceptable. The study therefore, resolved that the use of Cause

Marketing influences customer retention of a highly publicised brand. Findings of

this research adds to the body of knowledge on Cause Marketing and is beneficial to

Marketing and Marketing Communications practitioners across various industries,

as well as Not-‐for Profit organisations who seek to pitch companies.

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ACKNOWLEDGMENT

I would like to say a big thank you to GOD for every single day I was able to make it for

classes despite my crazy work schedule and for supplying the funds necessary to

complete my MSc programme. To my mother I say a big thank you for your earnest

prayers, love and support. My sisters Omoye, Gladys and Margaret, my brothers Irabor

and Eromosele and of course my little nephew Osareme whose unconditional love have

kept me going.

I also say a big thank to the SMC faculty most especially my supervisor Dr. Otubanjo for

guiding me through the process of putting my dissertation together. Obianuju and Ndidi,

thank you for effectively mediating between the students and faculty.

Dr. Tam George, for making theories of communication easy to grasp therefore making

application to this study seamless.

I appreciate my best friend Obinali Okoli for encouraging and supporting my quest for

knowledge. To Bridget and Eduvie I say a big thank you for your support in times of

need. I love you all.

I also acknowledge my past and present employers as well as my senior colleagues, Mr.

Udeme Ufot, Funke Nwankwo, Kunle Shittu, Kaliko Olowole, Nnenna Onyeawuchi and

Temitayo Adereti for supporting me in achieving my goal.

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DEDICATION

I dedicate this study to my Late Father, Barrister David Osuan Omovbude, who

throughout his lifetime etched in the walls of my heart the importance of education.

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CERTIFICATION

I certify that this work was carried out by EHIAGHE RITA OMOVBUDE in the School

of Media and Communication, Pan-Atlantic University, under my supervision

Supervisor

Dr. Tayo Otubanjo (Senior Lecturer, Marketing)

School of Media and Communication

Pan-Atlantic University

Lagos, Nigeria.

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DECLARATION

I hereby declare that all the work in this dissertation is entirely my own, unless referenced

in the text as a specific source and included in the bibliography.

Name: Ehiaghe Rita Omovbude

Matric No: PAU/SMC/PT3/110030

Signed:

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Table of Contents

ABSTRACT ................................................................................................................................................2 ACKNOWLEDGMENT .............................................................................................................................3 DEDICATION ............................................................................................................................................4 CERTIFICATION ......................................................................................................................................5 CHAPTER ONE: INTRODUCTION........................................................................................................8 1.0 BACKGROUND..................................................................................................................................................8 1.1 STATEMENT OF THE PROBLEM .....................................................................................................................13 1.2 OBJECTIVES OF THE STUDY............................................................................................................................14 1.3 SCOPE OF STUDY..............................................................................................................................................14 1.4 OPERATIONAL DEFINITION OF TERMS.........................................................................................................15 1.5 SIGNIFICANCE OF THE STUDY ........................................................................................................................16 1.6 RESEARCH QUESTIONS ...................................................................................................................................17

CHAPTER TWO: LITERATURE REVIEW........................................................................................ 18 2.0 INTRODUCTION................................................................................................................................................18 2.1 THEORETICAL FOUNDATION .........................................................................................................................18 2.2 STRENGTHS AND WEAKNESSES INHERENT IN THE USES OF CRM LITERATURE..................................24 2.3 CONCEPTUAL FRAMEWORK...........................................................................................................................25

CHAPTER THREE: METHODOLOGY ............................................................................................... 31 3.0 INTRODUCTION................................................................................................................................................31 3.1 RESEARCH DESIGN ..........................................................................................................................................31 3.2 TYPES OF SAMPLING.................................................................................................................................32 3.2.1 POPULATION AND SAMPLE PROCEDURE..................................................................................................34 3.2.2 DATA ANALYSIS PROCEDURE.....................................................................................................................34

CHAPTER 4: PRESENTATION OF FINDINGS AND ANALYSIS .................................................. 36 4.1 QUALITATIVE FINDINGS .............................................................................................................................36 4.2 QUANTITATIVE FINDINGS..........................................................................................................................41 4.2.1 HYPOTHESES TESTING............................................................................................................................58

CHAPTER 5: CONCLUSION AND RECOMMENDATION .............................................................. 63 5.0 INTRODUCTION................................................................................................................................................63 5.1 FINDINGS ..........................................................................................................................................................63 5.2 IMPLICATIONS..................................................................................................................................................64 5.2.1 IMPLICATIONS TO THEORY.........................................................................................................................64 5.2.2 IMPLICATIONS TO PRACTITIONERS ..........................................................................................................65 5.3 RECOMMENDATIONS ......................................................................................................................................66

REFERENCES ......................................................................................................................................... 67 APPENDIX .............................................................................................................................................. 81

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CHAPTER ONE: INTRODUCTION

1.0 Background

Cause-related marketing (CRM) is a type of marketing strategy that lends support to a

charity through sales with the intent to portray a favourable brand image(Barone M. N.,

2007)). Jerry Welsh of the American Express conceived CRM as a way of increasing

awareness of the company card by linking it to a local arts programme in San Francisco.

The results encouraged American Express to apply it on a national level, i.e. the

restoration of the Statue of Liberty (Davidson, 1997) in which a 2% donation was made

everytime a card was used and when new members were added. American Express,

through the initiative, increased their sales by 28% (Demetriou M., 2009) (Demetriou,

2009)Demetriou, Papasolomou & Vrontis, 2009, p. 267).

CRM has become more popular and is now considered as one of the fastest growing

forms of marketing (Berglind & Nakata, 2005 p. 445). Researchers like Skory, Repka &

McInst (2004) have referred to CRM as “marketing with a worthy cause” (p.2). Carringer

(1994) defined it as:

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“...the joining together of a not-for-profit charity and a commercial

company in an effort to raise funds and awareness for the cause while

building the sales and awareness of the for-profit partner” (p.16)

But the most comprehensive definition of CRM was given by Varadarajan & Menon

(1988) as:

“. . . the process of formulating and implementing marketing activities that

are characterized by an offer from the firm to contribute a specified

amount to a designated cause when customers engage in revenue-

providing exchanges that satisfy organizational and individual objectives”

(p.60)

CSR, which means Corporate Social Responsibility, is a management concept that

integrates social and environmental concerns into business operations. Mehegan (1995, p.

32) pointed out several factors that differentiate CRM from other CSR initiatives like

philanthropy. . For instance, philanthropy would come from the company’s income and

the company would expect nothing in return while CRM comes from the advertising or

promotion budget and the company would expect its sales to improve. Whereas

sponsorship is given before the purchase, in CRM the donation amount is sales-driven

(Svensson & Wood, 2006). This, stated Chaney and Dolli (2001), is the most important

part of the definition (p.157).

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Daw (2006) pointed out four characteristics in differentiating CRM from other kinds of

interactions between profit and non-profit organisations: it is mutually beneficial to both

parties, it creates awareness of the CRM program, it creates value for other stakeholders

besides both parties and it involves the participation of employees and consumers in the

process (p.21).

Smith (1994) has referred to CRM as ‘strategic philanthropy’ (p.111) as it helps

companies maintain competitiveness in the long run (Simon 1995). But Andreason

(1996) concluded that if the public believes the positives of a non-profit are being used

by a company to cover an inferior product then the CRM initiative is sabotaged (p. 59).

Furthermore, Ross et al. (1991) stated that CRM may lose its effectiveness as more and

more companies use it.

Several factors like the favourable response to CRM have led to its rapid growth (Gupta

& Pirsch, 2006; Lafferty & Goldsmith, 2005; Ross et al., 1992).

Husted & Whitehouse (2002) pointed out that CRM started out with a short-term

cooperation between profit and non-profit organizations, and then evolved as products

were linked to non-profit causes, and is now regarded as a long-term cooperation between

profit and non-profit organizations and implemented in profit organizations’ corporate

strategy (p.6). On the other hand, Thorne McAlister & Ferell (2002) challenge this view

and point out that long-term cooperation is an exception (p.693).

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Several CRM’s structural elements such as product type (Strahilevitz & Myers, 1998),

cause-type (Cui et al. 2003;Ellen, Mohr, & Webb, 2000) cause-proximity (Grau & Folse,

2007) and fit between sponsoring company and the cause supported (Hou, Du & Li,

2008) have been postulated in the literature to influence consumers’ response to CRM.

Past study (Ross et al., 1992) suggests that females show more favourable response

towards CRM than males.

There was also the issue of cause-proximity. Varadarajan and Menon (1988) suggested

that cause-proximity refers to the distance between the donation activity and the potential

consumers that would make the donation. Ross et al. (1992) showed that consumers hold

a more favourable attitude towards a firm that supports a local cause than a firm that

supports a national cause. It isn’t clear the influence of gender on the impact of cause-

proximity and how it affects consumers’ response to CRM. Ross et al. (1992) also found

that women hold a more positive attitude towards the firm than men do towards CRM but

the attitude is influenced by cause-proximity and so if companies want to target female

consumers they should design a campaign that supports local cause.

Overall, male have more favourable response towards CRM than female and for CRM

campaigns targeted at male consumers cause-proximity is of less concern, hence

companies may design CRM campaigns that support either local or international causes.

Male respondents have high attitudes towards both local and international causes. Hou,

Du & Li (2008) however concluded that local causes were preferred to national causes.

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Other factors that influence the purchase intention have been pointed out by further

studies to include the size of the donation, gender, the fit between the cause and the

company (Varadarajan & Menon, 1988; Ellen et al., 2000) and consumer’s connection to

the cause (Farache et al, 2008). Broderick, Jogi & Garry (2003) and Grau & Folse (2007)

also pointed out that the connectedness that the consumers feel to the cause was key in

determining their response to the CRM campaign. Faracha et al (2008, p. 210) also

supports this. If for instance there is no connection to the cause, then other elements like

the importance of the cause and the length of the campaign (Trimble & Rifon, 2006)

would help the consumers decide on purchase. Grau & Folse (2007) concluded in their

research that the proximity of the cause can affect the attitude of consumers to

products/services even if there was a personal connection to the cause.

It is imperative that there should be a ‘fit’ between the company image and that of the

cause which it is supporting (Varadarajan & Menon, 1988; Ellen et al., 2000; Speed &

Thompson, 2000). The cause should be compatible with the corporate identity and

perhaps the target market (Higgins, 1986; Shell, 1989; Larson, 1994). Lafferty,

Goldsmith, & Hult, (2004) showed in their research, the negative impact of lack of fit on

comsumers’ attitude to the cause.

According to Grau & Folse (2007, p.19), the size of the donation to the cause also

determine the benefits of the CRM campaign and Hajjat (2003, p.97) supported them in

this in addition to the existence of personal connection to the cause. Grau, Garretson, &

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Pirsch, 2007) stated that a small-sized donation can lead consumers to believe that the

company is just exploiting the non-profit organisation.

A research done in some universities in Pakistan indicated that the consumers’ attitudes

to products are indeed influenced by CRM. But also that awareness of brand and image

of the company is also a deciding factor on that influence. (Shabbir, Kaufmann, Ahmad,

& Qureshi, 2010). Samu & Wymer (2009) found that the fit between the cause and the

company image worked with the dominance of the advertisement and made the brand

favourable if they were high.

1.1 Statement of the problem

A considerable amount of work has gone into the study of Cause Marketing but it appears

that very limited work has been done to examine the relationship between the use of

Cause-Related Marketing and customer retention.

Due to this gap in literature, Marketing Communications practitioners are oblivious of the

effect of Cause Marketing on brand loyalty, which is the ultimate goal of every brand

custodian. Therefore, limiting its strategic use in the marketing process.

In a research conducted by Basil, Runte, & Deshpande, (2012) it was found that 70% of

non-profits sampled did not participate in CRM because they lacked the resources to do

so and didn’t feel that they were the kind of non-profits that companies would want to

partner with. This gap in literature therefore means that non-profits are not exposed and

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armed with the necessary knowledge required to approach companies that are most likely

to partner with them, therefore reducing their chances of benefiting from Cause

Marketing.

The gap in literature also inhibits academics from expanding on the study of the ‘use of

Cause Marketing’ as a result limiting the possibilities of adding to the body of knowledge

in the use of this strategic marketing tool.

1.2 Objectives of the study

1. To find out if building a good brand image is a major rationale for the ‘use of CRM’

2. To find out if achieving set sales target is a major rationale for 'use of CRM’

3. To find out achieving brand equity is a major rationale for the 'use of CRM’

4. To find out if reinforcing a brand’s positioning is a major rationale the 'use of CRM’

5. To find out if Corporate Transformation is a major rationale for the 'use of CRM’

6. To find out how the use of Cause Marketing influences customer retention of a highly

publicized brand

7. To find out if the use of CRM contributes significantly to customer retention

1.3 Scope of Study

This thesis examines the relationship that subsists within the framework of three

dominant concepts within the field of marketing. These include Cause-Related

Marketing, Publicity and Customer Retention. Cause-Related Marketing is a type of

marketing strategy that lends support to a charity through sales with the intent to portray

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a favourable brand image (Barone, Norman, & Miyazaki, 2007). Publicity according to

the Oxford American Dictionary is the notice or attention given to someone or something

by the media. Customer retention is the processes of keeping your customers or ensuring

that ones customers stay for the purpose of profitability and sustained revenue. This study

is essentially focused on these three variables and will not go beyond these boundaries.

1.4 Operational definition of terms

Cause-Related Marketing(CRM): A strategic marketing tool that is characterized by an

offer from a firm to contribute a specified amount to a designated cause when a customer

makes a purchase.

Customer Retention: Keeping a customer or making a customer stay

Publicity: Awareness about something or someone on any media

Marketing Communications: Strategies, tactics and activities involved in getting desired

marketing message to its intended target market.

Corporate Transformation: Behavioural changes that occur within an organization to

improve its performance.

Branding: Branding is the process of making a product or service easily recognizable by

customers through its intrinsic and extrinsic values.

Brand Equity: The value premium a company realizes from having a recognizable brand

image

Brand Positioning: The process of creating a brand offer in such a manner that it

occupies a distinctive place and value in the target customers mind

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1.5 Significance of the study

A number of studies on Cause Marketing have focused on the effect of donations on

consumer purchase and Olsen, Pracejus, and Brown (2003) also pursued this research

with a conclusion that people report higher attitudes toward a company and express

stronger purchase intentions as a function of the percentage value of their donation.

Attitude is as a result of perception and perception stems from how people view things

and the fact that actions such as a company’s declaration of the value of their donation

creates an effect on consumers purchase behaviour reflects that there is something that

influences customers based on what they see the brand reflect. Thus the need to find out

if CRM can significantly influence customer retention of a highly publicized brand.

In general, CRM campaigns result in more positive consumer attitudes toward a

company and greater purchase likelihood for its products.(Brown and Dacin 1997;

Pracejus, Olsen, and Brown 2003; Strahilevitz and Meyers 1998). However, there is a

dearth in literature on the relationship between Cause-Related Marketing and customer

retention.

This study is therefore significant because it is original and findings from this study will

not only add to existing literature but also assist Brand Managers, Business Category

Managers, Marketing Communications Practitioners and Marketing Directors in making

informed decisions as regards the ‘use of CRM’ for customer retention. In addition, this

will be a valuable resource material for non-profits seeking to pitch a partnership with

for-profit organizations.

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1.6 Research questions

This study aims at interrogating one overall question firmly supported by seven

interrelated sub questions.

Overall question

How does the use of cause related Marketing influence customer retention of a highly

publicized brand?

Sub questions

1. Is building a good brand image a major rationale for the ‘use of CRM’?

2. Is achieving set sales target a major rationale for 'use of CRM’?

3. Is achieving brand equity a major rationale for the 'use of CRM’?

4. Is reinforcing a brand’s positioning a major rationale the 'use of CRM’?

5. Is Corporate Transformation a major rationale for the 'use of CRM’?

6. How does the use of Cause Marketing influence customer retention of a highly

publicized brand?

7. Does the use of CRM contribute significantly to customer retention?

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CHAPTER TWO: LITERATURE REVIEW

2.0 Introduction

This chapter seeks to examine existing literature on the use of Cause-Related Marketing

and it will identify the gaps in literature on the relationship between Cause Marketing and

Customer Retention. In addition, a research question is developed and answered using a

conceptual model of the relationship between CRM and Customer Retention backed by

the Circuits of Power Theory postulated by Stewart Clegg (1989) and the hypotheses

generated from this model is discussed.

2.1 Theoretical foundation

The review of literature indicates that CRM is used to take advantage of a variety of

strategic marketing and business benefits. These are discussed in the paragraphs below;

CRM for image building: Business in the Community, defines CRM as “a commercial

activity by which businesses and charities or causes form a partnership with each other to

market an image, product, or service for mutual benefit.” The business enhances its

public image by being associated with a "worthy cause" and increases its sales in the

process (Caesar, 1986). In recent years, CRM has helped re-image companies hurt by

corporate scandals, ad clutter, globalization, and new technologies (Adler, 2006). Today,

most of the companies are using Cause Related Marketing as a strategic tool (Till and

Nowak, 2000) to build a positive corporate image in the minds of consumers

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(Chattananon et al., 2008) which results in enhancing the sales of a company’s products

(Varadarajan and Menon, 1988) and profits as well (Adkins, 2004). In 1983, American

Express Company began a campaign entitled, "When Did You First Fall in Love With

Her?" which became one of the most heralded CRM campaigns to date (Caesar 1986;

Higgins 1986; Kinsley 1985; Mescon and Tifson 1987; Schiller 1988; Smith and Alcorn

1991; Varadarajan and Menon 1988; Wiegner 1985). The campaign "made people feel

good about American Express" and left the impression of a responsible, public-minded,

even patriotic corporation (Mescon and Tilson 1987). To be more specific, the long-term

gain from a CRM program is in terms of enhanced corporate identity and image. In

contrast, CRM program is normally conceptualized as a promotional tool that has

stronger effects on short-term sales, and that can also favourably impact on image and

attitudes (File and Prince, 1998; Stipp and Schiavone, 1996). Even though studies

indicate that consumers believe it is important for marketers to seek out ways for their

firms to become good corporate citizens (R&S Worldwide, 1996), that cause related

marketing is "a good way to solve social problems" (Ptacek & Salazar, 1997), and that

consumers have a more positive image of a company if it is doing something to make the

world a better place. Another reason for CRM’s growth is that public opinion research

has shown that effective cause programs can enhance a company’s reputation and brand

image and increase the credibility of its marketing effort while giving customers a

convenient way to contribute to nonprofit organizations through their purchasing

decisions. One result is that cause-related marketing in many companies has moved from

being a short-term, one-time campaign to build sales, to a longer-term strategic effort to

build brand and reputation. (Rains 2003) In the first case CEOs that authorize CRM earn

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social recognition, prestige and popularity and enjoy warm-glow, magnified by the large

scale of corporate donations (Polishchuk, Firsov 2007)

CRM for brand equity: Cause marketing uses the equity of a charity brand to create a

link between a company and consumers (Kylander. 2006). CRM is a "dramatic way to

build brand equity. It creates the most added value and most directly enhances financial

performance" (Mullen, 1997). If price and quality are equal, customers are likely to

switch to a brand with cause related marketing benefit (R&S Worldwide, 1993; 1996).

CRM for sales: CRM, in contrast, has a very strong link with sales, since the level of

``giving’’ is tied directly to sales outcomes. To undertake CRM successfully a firm is

therefore required to identify the expected sales level without the program and how the

program will increase sales, since this will form the basis for the payment to the recipient

combining CRM and sponsorship has the advantage of introducing a more direct

evaluation framework, which is based on identifying incremental sales (Polonsky, Speed

2000). CRM campaign is designed for changing the consumers’ opinion, or for

eventually altering the consumers’ behaviour in a way that generates income for both the

company and the cause (Pracejus & Olsen, 2004). Although companies and causes may

view CRM as a tool to achieve economic and social objectives, consumers may view

CRM as a combination of a purchase decision and some form of altruistic or donor

behaviour. If so, a number of streams of research converge to facilitate the

conceptualization and prediction of CRM consumer behaviour. (Varadarajan, Menon

1988).

Company-cause fit does influence the customer’s attitude toward the fit, which in turn

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influences the customer’s intent to purchase the cause-related marketing product. The

framework in this study makes several theoretical contributions by enhancing knowledge

about the nature and structure of cause-related marketing. It confirms the results of

(Lafferty et al. 2004) suggesting that the customer’s overall attitude toward the

sponsoring company plays an important role in influencing purchase intent of the

sponsored product.

In the context of CRM, the same logic can also be applied; CRM campaign that supports

a local cause is more likely to be evaluated more favorably by the consumers than CRM

that supports an international cause. Signaling theory (Spence, 1974) suggested that cues

provide employers with tangible information that are often necessary to evaluate

unobservable factor. Several factors such as price, warranties and advertising

expenditures have been used by consumers as signals or cues that assist them in

evaluating a company’s product and help them in their decision making.. CRM

campaigns that support a local cause might signal greater or better offer for the

consumers compared to support of national and international cause. (Anuar, Mohamad

2011)

One theory that explains this is Social exchange theory, which looks at human interaction

in terms of a dynamic social process in which parties exchange commodities, resources or

skills in an attempt to maximize their rewards and minimize their costs (Burnett and

Wood, 1988;Foa&Foa, 1980)

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Another is Equity theory, which is similar to exchange theory in that individuals are

assumed to attempt to maximize their resources. However, equity theory postulates that

cognitive dissonance will occur when one party in the exchange receives either too much

or too little in the exchange. (Burnett and wood, 1988;Bar-Tal1976) An individual might

engage in a CRM purchase if; (1) in the past they have perceived the purchase and to be

inequitable and the donation by the firm themselves and the recipient of the donation, or

(2) both perceptions may occur.

Cause Related Marketing appears to be a good way to raise funds for charity

organizations. Women are significantly more likely than men to try a new brand as a

result of a CRM promotion if they regularly used the product category (K.Ross,

Stutts,Patterson) Commodity fetishism is useful in understanding how CRM campaigns

like Product RED can reconcile the tensions between capitalism and social activism, two

historically separate, if not oppositional, spheres (Banet-Weiser and Lapsansky 2008).

While it would be probable for a CRM campaign to donate money to a particular cause

without tuning the beneficiaries of that cause into a commodity itself.

Product RED situates Africa directly into the symbolic order of consumption. RED

remains consistent with the social politics of individualization (Bauman 2001) and a

neoliberal approach to welfare that celebrates privatization, personal responsibility, and

consumer choice. (kuehn 2009). However, there are several variations on this theme and

not all CRM campaigns channel money to nonprofits; some engage principally in

educational or awareness-building activities. (Rains 2003)

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CRM for brand positioning: “The key in positioning your brand,” said Lipsky, “is

tapping into the right frame.” It’s therefore not so much about the content of the

communication, but the frame you are evoking (Kylander. 2006). In all the CRM

campaigns the emphasis is placed on positioning the brand at the heart of the partnership

and not on straightforward philanthropy (Papasolomou, Demetriou). Cause related

marketing, when implemented correctly, can provide a means to differentiate a particular

brand or an entire corporation from its respective competition because of its socially

responsible overtones and positive effect on the corporate image. CRM can help

companies distinguish themselves from their peers by offering the consumer the

opportunity to contribute to something more. A firm that introduces CRM on a

competitive market can increase its market share than the company’s bottom line (Anuar,

Mohamad 2011). Market differentiation and market segmentation is easier to accomplish

when a company uses CRM (Rucker & Petty, 2006; Zuckerman & Chaiken, 1998). The

continued emergence of this area of marketing will most certainly be facilitated by the

attention given to the strategic value of focusing on the long-term benefits of enhancing

corporate image as a means of gaining competitive advantage.

The argument in this concept is that CRM efforts can be traced to the fact that they have

been initiated without considering their overall relationship to the company’s vision and

mission. Mission marketing, on the other hand, has more believability than cause related

marketing because it is a long-term and strategic organizational objective. It is bound to

the mission of the organization and according to Duncan, the first thing a company needs

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to do is to determine a realistic, applicable mission that reflects a corporate social

responsibility and then be willing to ‘walk the talk’. The notion of “espoused theory” –

what one says – and “theory in use” – what one actually does – is well known in

cognitive psychology. It is relevant in explaining human behavior as a function of well-

established mental models and behavioral routines that are culturally downloaded and

reinforced through everyday interactions. The ideas of espoused and in-use theories have

clear parallels with situations that organizations frequently struggle with (Broon, 2001)

…as more and more companies begin promoting their products with CRM the practice

may become commonplace and may no longer become unique or effective. Causes that

have a local or regional identification may result in greater success for both the firm and

the cause than national or international causes (Ross, Stutts, Patterson, 1991)

2.2 Strengths and weaknesses inherent in the uses of CRM literature

The literature on CRM so far has successfully given insight to its different uses from

Sales, Image building, strategic positioning, influencing consumer purchase decision and

brand equity. However, there’s room to expand the literature on the use of CRM for

brand equity. CRM has also constantly been defined as a strategic promotional tool that is

mutually beneficial to both profit organizations and not-for-profit organizations thereby

skewing studies on the relationship between CRM and sales or donation size but (Rains

2003) states that there are several variations on this theme and not all CRM campaigns

channel money to nonprofits; some engage principally in educational or awareness-

building activities. This variation has not been studied adequately as such confirming

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Papasolomou and Demetriou’s statement that the current literature on CRM is limited as

to what CRM is or how it is implemented. In addition, a lot of research has focused on

the positive influence of CRM on sales and donations but there is a dearth in literature on

how the use of CRM is used to boost brand loyalty. Pracejus & Olsen (2004) highlighted

amongst the benefits of CRM, customer loyalty. However does not state how. Not many

researchers have focused on how important brand personality is to brand loyalty

(Plummer, 1985). It is on this premise that this question is asked; how does the use of

Cause Marketing influence customer retention of a highly publicized brand? This

question will be answered conceptually in the next paragraph.

2.3 Conceptual framework

The social science theory that best explains this framework is the Circuit of Power

Theory as postulated by Stewart Clegg (1989). He sees power as a circular process that

flows in three channels which he calls circuits of power. Each of these three circuits of

power has a dynamic form of its own.

1. Overt Circuit of Power: In simple terms this states that A activates resources and

means, and influences B in a way in which B would not have acted were it not for his

relations with A. ‘A’ being the use of CRM and ‘B’ being customer retention. This

means that the ‘use of CRM’ influences customer retention but that this is only

possible because of the way and manner CRM is used. As such depending on how

CRM is used, it can have a negative or positive influence on customer retention.

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2. The Social Circuit of Power: This is also called the circuit of social integration or

dispositional circuit. This circuit creates a movement from obscurity to mainstream of

society. This is actualized when a brand that uses CRM through techniques of

production, publicize a brand in a way that customers have a sense of meaning and

belonging. This is the movement from ‘A’ to ‘C’. ‘A’ being CRM and ‘C’ being

publicity.

3. The systemic-economic circuit of power: This states that both material and non-

material resources are created. It is also called the facilitative circuit of power, which

in the context of the subject matter refers to the movement from publicity to customer

retention. The movement from publicity creates a belief system or presents physical

rewards that customers can relate with and causes them to be loyal to the brand being

publicized. In addition, this circuit could be negative or positive as it relates with

customer retention.

This entire movement is called an obligatory passage point that mediates all interactions.

In this case what facilitates the passage points is Publicity, which is the mediating

variable between CRM, which is the antecedent variable, and Customer Retention, which

is the consequential variable.

27

Figure 2. 1: Model of the relationship between CRM and customer retention

H1: Building a good brand image is a major rationale for the 'use of CRM'

H2: Achieving set sales target is a major rationale for the 'use of CRM'

H3: The desire to achieve brand equity is a major rationale for the 'use of CRM'

H4: The desire to reinforce a brand’s positioning is a major rationale for the 'use of CRM'

H5: Corporate Transformation is a major rationale for the ‘use of CRM’

H6: The use of CRM contributes significantly to customer retention at a time publicity is

used to make a brand visible

H7: The use of CRM contributes significantly to customer retention

28

H1- Building a good brand image is a major rationale for the 'use of CRM'.

Corporate identity deals with the impressions, image, and personality that an organization

presents to its stakeholders (Schmitt & Pan, 1994). Pracejus & Olsen (2004) highlighted

amongst the benefits of CRM, customer loyalty and improved brand image, which can

improve sales as well (Ross, Patterson & Stutts, 1992; Kropp, Holden & Lavack, 1999)

A research done in some universities in Pakistan indicated that the consumers’ attitude to

products is indeed influenced by CRM. But also that awareness of brand and image of the

company is also a deciding factor on that influence (Shabbir, Kaufmann, Ahmad, &

Qureshi, 2010). Bergami and Bagozzi 2000 state that an individual’s ability to identify

with an organization has both an emotional (attitude toward the company) and a cognitive

(company-customer fit) component (Gupta, Pirsch 2006). This therefore informs the

quest to find out if building a good brand image is a major factor for the ‘use of CRM’ by

corporate organizations? Considering the fact that an improved brand image can boost

sales.

H2: Achieving set sales target is a major rationale for the 'use of CRM'

The need to examine if the desire to meet or exceed a sales target is a major reason for

when CRM is used and how it is used informs this hypothesis. (Polonsky, Speed 2000)

states that CRM, in contrast, has a very strong link with sales, since the level of ``giving’’

is tied directly to sales outcomes. To undertake CRM successfully a firm is therefore

required to identify the expected sales level without the program and how the program

will increase sales, since this will form the basis for the payment to the recipient.

However before a company embarks on CRM, is sale the number one reason for using

CRM or the eventual outcome of a different objective entirely?

29

H3: The desire to achieve brand equity is a major rationale for the 'use of CRM'

CRM is a "dramatic way to build brand equity . . . as it creates the most added value and

most directly enhances financial performance" (Mullen, 1997). Achieving the

Brand equity can be thought of as the "added value" endowed to a product in the

thoughts, words, and actions of consumers. Thus investigations will be carried out to find

out if Brand equity is the major reason for the use of CRM.

H4: The desire to reinforce a brand’s positioning is a major rationale for the 'use of

CRM'

Several CRM’s structural elements such as product type (Strahilevitz & Myers, 1998),

cause-type (Cui et al. 2003;Ellen, Mohr, & Webb, 2000) cause-proximity (Grau & Folse,

2007) and fit between sponsoring company and the cause supported (Hou, Du & Li,

2008) have been postulated in the literature to influence consumers’ response to CRM.

As such is a brand’s positioning influenced by different factors of CRM or the need to

reinforce a brand’s position the major reason for CRM?

H5: Corporate Transformation is a major rationale for the ‘use of CRM’: A new

contribution to literature by author

Existing literature consistently refers to CRM as a strategic promotional tool, as such on-

going research has been about the impact of CRM on sales and the relationship between

donation size and cause fit in consumer purchase decisions. However, this construct

states that CRM is used for Corporate Transformation and as such brings about change to

30

a brand’s image, personality, market share, value share and emotional connections with

the consumer based on the cause fit. This concept allows for CRM analysis of both profit

making and not-for profit-making organizations. In recent years, CRM has helped re-

image companies hurt by corporate scandals, ad clutter, globalization, and new

technologies (Adler, 2006) and at a time when countries, companies and small businesses

are faced with a down turn and growing social issues, it is imperative to find out if the

need for Corporate Transformation is a major reason for the use of CRM.

H6: The use of CRM contributes significantly to customer retention at a time

publicity is used to make a brand visible

This seeks to investigate if publicity has a moderating effect in the relationship between

CRM and customer retention. It also investigates if the use of CRM contributes

significantly to customer loyalty considering the moderating effect of the publicity of a

brand. It’s therefore not so much about the content of the communication, but the frame

you are evoking. (Kylander, 2006) As such, it is imperative to understand the extent the

moderating effect of publicity would influence the contribution of CRM to customer

retention.


Not many researchers have focused on how important brand personality is to brand

loyalty (Plummer, 1985). As such this will seek to find out the relationship between CRM

and brand personality and how this translates to retention of customers.

31

CHAPTER THREE: METHODOLOGY

3.0 Introduction

The previous chapter attempted to answer the research question; how does the use

of Cause-Related Marketing influence customer retention of a highly publicized

brand? This question was answered conceptually using the circuits of power theory,

out of which seven hypotheses were derived.

This chapter however, seeks to build on the findings of chapter 2 and serves as the

beginning of the process of answering the research question empirically. The

objectives will therefore be to:

1. Identify a methodological framework that can be used to answer the question

2. Identify the most suitable research design

3.1 Research design

Research design has been defined as: “the logic that links the data to be collected (and the

conclusions to be drawn) to the initial questions of study” (Yin, 2003, p.19). Research

design is the basic framework of the various activities required in the study to provide

answers to the research questions. It addresses the purpose of the study, the unit being

studied, the time cross-section of the study, the data collection methods to be used, data

analysis procedures and presentation to be used. It is important to note that the more

complex the research design, the greater the amount of resources that will be required in

doing the research.

32

The purpose of this study is to find out how the use of Cause Marketing influences

customer retention of a highly publicized brand as it will provide guidance to

practitioners on the strategic and effective ‘use of CRM’. This study has been designed to

answer these questions;(1) Is building a good brand image a major rationale for the ‘use

of CRM’? (2) Is achieving set sales target a major rationale for the 'use of CRM’? (3) Is

achieving brand equity a major rationale for the 'use of CRM’? (4) Is reinforcing a

brand’s positioning a major rationale for the 'use of CRM’? (5) Is Corporate

Transformation a major rationale for the 'use of CRM’? (6) Does the use of Cause

Marketing influence customer retention of a highly publicized brand? (7) Does the use of

CRM contribute significantly to customer retention?

3.2 Types of sampling

A simple random sample: - A simple random sample is obtained by choosing elementary

units in such a way that each unit in the population has an equal chance of being selected.

A simple random sample is free from sampling bias. However, using a random number

table to choose the elementary units can be cumbersome. If the sample is to be collected

by a person untrained in statistics, then instructions may be misinterpreted and selections

may be made improperly.

A stratified sample: A stratified sample is obtained by independently selecting a simple

random sample from each population stratum. A population can be divided into different

groups and may be based on some characteristics. E.g education, age, gender etc.

33

A cluster sample: A cluster sample is obtained by selecting clusters from the population

on the basis of simple random sampling. The sample comprises a census of each random

cluster selected. For example, a cluster can be made up of a village or a school or a state.

Non-Probability Sampling Methods

Convenience sampling: Here the researcher questions anyone who is available. This

method is quick and cheap. However we do not know how representative the sample is

and how reliable the result would be.

Quota Sampling: Using this method the sample audience is made up of potential

purchasers of your product. For example if the typical customers will be male between

18-23, female between 26-30, then some of the respondents interviewed is expected to be

made up of this group.

The judgment sample: A judgment sample is obtained according to the discretion of

someone who is familiar with the relevant characteristics of the population. The sampling

method suitable for this study is the Judgment sample because the researcher is familiar

with the population in the marketing communications industry in Nigeria, especially as

most of the cluster in the industry is centred in Lagos. In addition, this method is the most

suitable given the time required to complete this study.

34

3.2.1 Population and sample procedure

Managers of twelve public relations firms in Nigeria will be interviewed. There are 40

registered PR firms in Nigeria; as such interacting with 12 managers in the different firms

will generate objective judgment or inference. Judgmental sampling will be used to make

the selection of firms and managers to be interviewed. Managers interviewed must have

over 3years experience in a Public Relations Firm and worked on at least two brands.

Managers of PR firms have been selected because they are exposed to many brands, as

such the possibility for exposure to Cause-related Marketing projects across various

industries is higher. Thus, share more depth of knowledge on the subject matter than a

brand manager working for a corporate organization. After the interview is conducted

and analyzed, inferences would be made and used as a parameter for preparing and

administering the questionnaires to Marketing and Marketing Communications

Practitioners. Judgmental sampling will also be used to make the selection. Practitioners

must at least have three years experience in managing brands and a total of 100

questionnaires will be distributed.

3.2.2 Data analysis procedure

The deductive method: deductive method begins with a theory from which hypotheses

are derived (Wallace, 1971), then the variables are defined and the methods for

measuring them are then established. Using these variables, the hypotheses are then

tested. The hypotheses will be acceptable if it matches with the observation. This method

starts from generalisation to specifics and is used in applying a theory to a particular

scenario.

35

The inductive method: This method is more like the opposite of the deductive method in

that we start with observations and develop general principles that explain relationships

between variables under observation. The construction of these general principles or

theories was referred to by Glaser and Strauss (1967) as “Grounded Theory” because

they are grounded in data derived from observation.

Semi-inductive method: Semi-inductive analysis (Golden-Biddle & Locke, 2006) is

similar to the inductive method in trying to derive the variables which are connected to a

particular scenario but differs in the fact that whereas the researcher has no idea of the

variables in inductive method, semi-inductive method states that the researcher possesses

some idea about the phenomenon and other concepts could emerge during the course of

the study. In reality, there is no ending to scientific research, as more study will reveal

more variables, which help develop new theories; this would therefore involve alternating

between the deductive and inductive methods. Thus this study would use the deductive

method for data analysis. Through interviews conducted, it derives variables, which are

relevant to the study and after this is done, the hypotheses are tested and results deducted

from data collated and analysed. Chi-Square will therefore be used to test the hypotheses

because it helps to identify significant variable.

36

CHAPTER 4: PRESENTATION OF FINDINGS AND ANALYSIS 4.0 Background

An extensive breakdown of the methodology employed in this research has been

treated in the previous chapter. Using the mixed methodology required that

interviews were conducted amongst experienced Public Relations Practitioners and

based on qualitative analysis, a questionnaire was designed to find quantitative

answers to the seven hypothetical questions and concepts identified during the

interviews.

4.1 Qualitative findings

Figure 2.2 Lists of Respondents

NO RESPONDENTS PROFILE

1 Mr. Cornel Onwoha Chief Operating Officer Redgekko

Communications

2 Mr. Ayodeji Ayopo Managing Director Shortlist PR

3 Mrs. Chizendu Achikwu Head of Client Relations JSP Consult

4 Mr. Ayo Adegbesan PR Manager JSP Consult

5 Mrs. Amaka Olukoya Experienced PR Manager

6 Mr. Tobi Oluseye PR Manager Reputation Raise Limited

7 Mr. Abiona Babarinde PR Manager Soulcomms Publicis

37

-TWO-PRONGED STRATEGY: Cause Marketing was referred to as both a CSR and

Marketing tool. One of the respondents stated

“It is a two edged sword it is a form of CSR and a marketing tool”

“Cause marketing has two dimensions”

- TEETHING STAGE: Two of the respondents stated categorically that CRM is in

its developmental stage in Nigeria as such still trying to find a foot into its uses

and benefits. Ayo a PR Manager in JSP consulting stated

“Cause Marketing is still in its teething stage.”

and Amaka a PR Manager of over four years experience also reiterated saying

“We haven’t really gotten to the point of Cause Marketing so to speak. It’s more of CSR.

We are still trying to find our footing with the CSR thing and from there, I think we can

actually evolve to cause marketing but I think we are going to get there in a couple of

years time”

- CSR VERSUS CRM: When respondents were asked if they would proffer CRM to

their client one phenomenon was made clear that in Nigeria, there is no clear cut

distinction between CSR and CRM as such would rather proffer CSR. Comment

captured below.

“I’ll go for CSR as opposed to Cause Marketing. In the society today there’s no clear-cut

distinction and everyone is looking for what’s in it for them. It is going to be hard to

convince a client to give out a part of their profit to orphans and I think Cause Marketing

is not a one off thing it should be a yearly, quarterly thing and I don’t see them doing it,

38

they’ll rather push it back to their business, marketing, advertising, empower their own

people for better productivity. “

- PERCEPTION: A good perception was highlighted, as one of the reasons why

building a good brand image would be a major reason for the use of CRM. Mr. Cornel

Nwoha the Chief Operating Officer of Redgekko had this to say

“Yes. Because when you talk about social responsibility it creates an impression that

there is a concern for the immediate environment and the issues in the environment “

Mr. Ayodeji Ayopo the Managing Director of Shortlist PR also stated

“That is what PR is all about, the client must be positively perceived”

Even as regards the use of Cause Marketing for Corporate Transformation one of the

respondents also mentioned the importance to perception.

“When you have a bad image you will want to align yourself with things that are of

public interest so that you can be viewed or change public perception. “

Also when respondents were asked about the influence of CRM on customer retention of

a highly publicized brand one of the respondents stated

“Everything comes down to perception”

- LONG-TERM SALES RESULT

There were varying views on the use of CRM for sales. Some of the respondents stated

that sales is a function of a lot of things and CRM is just a minor part of the mix and

would only impact significantly on sales in the long term.

39

“If your sales target be that in the next five years you want to achieve this and for that

reason you are doing this, it might not add up like that at the end of the day. But give it a

longer period and you may be able to surpass your target but if you tie it to a target you

have for a period of one or two years you may not achieve that.“

- PRODUCT QUALITY

On the subject of the use of CRM for Brand Image Chizendu, the Head of Client Service

at JSP consulting stated

“First your brand has to be top notch”

and this was further reiterated in the subject of the use of CRM for Brand Equity by Tobi

a PR manager of Reputation raise

“I won’t say 100% other things are involved like the quality of your product and service.

CRM is just an addition but not a sole reason”

As regards the influence of CRM on customer retention, a respondent also made mention

of product quality stating

“The use of Cause Marketing could or would induce a higher level of trial purchase. It

can turn people to your brand because you’re aligning yourself to a particular cause and

be more interested in a brand because of what they are doing but if the brand is not up to

standard it can’t”

40

“For it to work. The organization must have a good product to sell. You cannot attach a

bad product to a cause. Take time to select the cause and the selection of the cause must

be about the people. “

The point stated here is that for CRM to be effective the product or brand in question has

to be of top quality.

EMOTIONAL CONNECTION

One of the reasons for the use of CRM for brand positioning stated by one of the

respondents is to create emotional connections.

“Yes. Because there are other brands so you have to reinforce brand positioning so that

the consumers know what I stand for and ultimately have an emotional connection with

my brand and they know what you support despite the fact a bit of profit will come in.”

The COO of Redgekko also stated when asked if CRM influences brand retention

significantly

“Yes. The how is driven by emotion and sentiment.

41

4.2 Quantitative Findings

Questionnaires were distributed among Marketing and Marketing Communications

practitioners who provide solutions for customer engagement and retention. Out of 120

questionnaires distributed, 92 responded. The analyses of the questionnaire have been

done and findings presented using pie chart and bar chart. Chi-square has also been used

to test the hypotheses.

Age Distribution

It is important that the respondents are people of experience in the area of Marketing and

Marketing Communications. As a result, finding out the age distribution would ensure a

clear understanding of the demographics of the respondents.

42

Gender Distribution

Gender is another important aspect of this study thus the need to understand the

distribution of both male and female respondents of this research.

Industry Distribution

The population of this survey is majorly Marketing or Marketing Communication

practitioners working in different sectors of the economy, hence the need to understand

the distribution.

Sourced from Survey Monkey 2013.

43

Industry Experience Distribution

This study requires that respondents are experienced in the Marketing Field. It is for this

reason that this question was asked.


44

CRM is good for brand image


45

CRM is good for achieving set sales target


46

CRM is good for achieving brand equity


47

CRM is good for reinforcing a brand’s positioning


48

CRM is good for achieving Corporate Transformation


49

There is a clear-cut difference between CRM and CSR


50

Cause Marketing is in its teething stage in Nigeria


51

Publicity of a brand that supports a cause is very important


52

Publicity of a brand that supports a cause is not necessary


53

Publicity of a brand that supports a cause is neither important nor necessary


54

I will stick to a brand that supports a cause


55

I will stick to a brand that supports a cause I am emotionally connected to


56

I will stick to a brand that supports a cause only if the brand of good quality


57

I will only stick to a brand that I perceive to be good or stand for something good


58

4.2.1 Hypotheses Testing

H1: Building a good brand image is a major rationale for the 'use of CRM'

This hypothesis seeks to find out if building a good brand image is a major reason for the

use of Cause-Related Marketing. Chi-square test was run using responses from Cause

Marketing is good for building brand image, I will only stick to a brand I perceive to be

good or stand for something against the question publicity of a brand that supports a

cause is very important. See the result below

Table 1: Hypothesis test

Customer Retention Publicity Df P(α=0.025) Comment Df P(α=0.025) Comment CRM for Brand Image

12 0.109 Significant 12 0.006 Significant

The result of the variables tested is significant. Therefore, the hypothesis Building a good brand image is a major rationale for the ‘use of CRM’ is accepted. H2: Achieving set sales target is a major rationale for the 'use of CRM'

This hypothesis seeks to find out if achieving a set sales target is a major reason for the use of Cause-Related Marketing. Chi-square test was run using responses from -Cause Marketing is good for achieving set sales target, I will stick to a brand that supports a cause only if the brand is of good quality against the question publicity of a brand that supports a cause is not necessary. See the result below

59

Table 2: Hypothesis test Customer Retention Publicity

Df P(α=0.025) Comment Df P(α=0.025) Comment CRM for Sales 12 0.106 Significant 12 0.107 Significant

The result of the variables tested is significant. Therefore, the hypothesis Achieving set sales target is a major rationale for the ‘use of CRM’ is accepted. H3: The desire to achieve brand equity is a major rationale for the 'use of CRM' This hypothesis seeks to find out if achieving brand equity is a major reason for the use Cause-Related Marketing. Chi-square was run using responses from Cause Marketing is good for achieving brand equity, I will stick to a brand that supports a cause I am emotionally connected to against responses for publicity of a brand that supports a cause is neither important nor necessary. See the result below Table 3: Hypothesis test Customer Retention Publicity

Df P(α=0.025) Comment Df P(α=0.025) Comment CRM for Brand Equity


The result of the variables tested is significant. Therefore, the hypothesis Brand equity is a major rationale for the ‘use of CRM’ is accepted. H4: The desire to reinforce a brand’s positioning is a major rationale for the 'use of

CRM'

This hypothesis seeks to find out if achieving a brand’s positioning is a major reason for the use Cause-Related Marketing. Chi-square was run using responses from Cause Marketing is good for reinforcing a brand’s positioning, I will stick to a brand that

60

supports a cause against responses from publicity of a brand that supports a cause is very important. See the result below Table 4: Hypothesis test Customer Retention Publicity

Df P(α=0.025) Comment Df P(α=0.025) Comment CRM for Brand Positioning


The result of the variables tested is significant. Therefore, the hypothesis Reinforcing a brand’s Positioning is a major rationale for the ‘use of CRM’ is accepted. H5: Corporate Transformation is a major rationale for the ‘use of CRM’: A new

contribution to literature by author

This hypothesis, which is a new contribution to literature, seeks to find out if Corporate Transformation is a major reason for the use of Cause-Related Marketing. Chi-square was run using responses from Cause Marketing is good for Corporate Transformation, I will stick to a brand that supports a cause against responses from publicity of a brand that supports a good cause is very important. See result below Table 5: Hypothesis test Customer Retention Publicity

Df P(α=0.025) Comment Df P(α=0.025) Comment CRMfor Corporate Transformation


61

The result of the variables tested is significant. Therefore, the hypothesis Corporate Transformation is a major rationale for the ‘use of CRM’ is accepted.

-

H6: The use of CRM contributes significantly to customer retention at a time publicity is used to make a brand visible

This hypothesis seeks to find out if the use of Cause Marketing significantly contributes to customer retention at a time when publicity is used for brand awareness of visibility. Chi-square was run using responses from Cause Marketing is good for brand image, Cause Marketing is good for achieving set sales target, Cause Marketing is good for achieving brand equity, Cause Marketing is good for reinforcing a brand’s positioning, Cause Marketing is good for Corporate Transformation against responses from Publicity of a brand that supports a cause is very important and I will stick to a brand that supports a cause. See the results below Table 6: Hypothesis test Customer Retention Publicity

Df P(α=0.025) Comment Df P(α=0.025) Comment CRM for Brand Image


CRM Sales Target


CRM for Brand Equity


CRM for Brand Positioning


CRM Corporate Transformation


The result of the variables tested is significant. Therefore, the hypothesis is accepted.

62

Cause Related Marketing contributes significantly to customer retention at a time publicity is used to make a brand visible.


This hypothesis seeks to find out if the use of Cause Marketing significantly contributes to customer retention. Chi-square was run using responses from Cause Marketing is good for brand image, Cause Marketing is good for achieving set sales target, Cause Marketing is good for achieving brand equity, Cause Marketing is good for reinforcing a brand’s positioning, Cause Marketing is good for Corporate Transformation against responses from I will stick to a brand that supports a cause. See the results below

Table 7: Hypothesis test Customer Retention

Df P(α=0.025) Comment CRM for Brand Image

12 0.000 Significant

CRM Sales Target


CRM for Brand Equity

9 0.002 Significant

CRM for Brand Positioning


CRM Corporate Transformation


The result of the variables tested is significant. Therefore, the hypothesis Cause Marketing significantly influences customer retention is accepted.

63

CHAPTER 5: CONCLUSION AND RECOMMENDATION

5.0 Introduction

The objective this research is to find out if building a good brand image is a major

rationale for the ‘use of CRM”, if achieving set sales target is a major rationale for the

'use of CRM’, if achieving brand equity is a major rationale for the 'use of CRM’, if

reinforcing a brand’s positioning is a major rationale the 'use of CRM’, if Corporate

Transformation which is a new addition to literature by the author is a major rationale for

the 'use of CRM’, how the use of Cause Marketing influences customer retention of a

highly publicized brand and if the use of CRM contributes significantly to customer

retention. After an extensive presentation of findings in the previous chapter, it is only

sacrosanct that this chapter analyzes the implications of these findings to theory and to

practice.

5.1 Findings

It was proposed that findings from this study will not only add to existing literature but

also assist Brand Managers, Business Category Managers, Marketing Communications

Practitioners and Marketing Directors in making informed decisions as regards the ‘use

of CRM’ for customer retention. In addition, this will be a valuable resource material for

non-profits seeking to pitch a partnership with for-profit organizations.

Findings from this study therefore is very relevant to Marketing Communications

Practitioners and Marketing Directors saddled with the responsibility of developing

64

solutions to recruit and retain customers. It confirms findings from previous literature

which are CRM for building brand image, CRM for sales, CRM for brand equity, CRM

for brand positioning and contributes a new literature to knowledge which is CRM for

Corporate Transformation.

The answers sort out for the seven hypotheses generated were found and conclusions

drawn from the findings and results. From the results, all seven hypotheses were accepted

therefore adding to existing literature on Cause-Related Marketing.

5.2 Implications

This section seeks to specifically analyze the consequence of findings of this study to

theory and practice.

5.2.1 Implications to theory

The research question this study sort to answer is how the use of CRM influences

customer retention of a highly publicised brand. Based on findings from this research, it

is clear that Cause-Related marketing is a powerful tool for influencing consumer’s

decisions to stick to a brand. The influence of Cause Marketing on Customer retention is

high and the influence of Cause Marketing on a brand that enjoys publicity is positively

significant too. We therefore cannot over emphasize the power of Cause Marketing as an

effective strategic marketing tool. There are however customers who will stick to a brand

65

with a cause that they are emotionally connected to and customers who will stick to a

brand that is of good quality and supports a cause at the same time.

5.2.2 Implications to Practitioners

Marketing and Marketing Communications practitioners are constantly saddled

with the responsibility of developing ideas that will not only recruit new customers

but retain as well. This study shows therefore that there are various uses of Cause

Marketing, thus if you seek to build image, hit sales target, reinforce a brand’s

positioning, achieve brand equity or bring about corporate transformation that Cause

Marketing can my used as a strategic tool to achieve customer loyalty or retention.

However, there are two things to put into consideration, ensure that the cause is one that

connects emotionally to target consumers and that the brand in question is of good

quality. In addition, for brands that require long-term solutions, CRM is a powerful tool.

Coordinators of Not-for-profit organisations are also constantly saddled with the

responsibility of raising funds for charity causes and faced with opportunities to pitch

their cause to corporate organisations without a truly mutually beneficial offer to the

organization or brand in question. It is therefore clear that Cause Marketing is a powerful

tool and is used to a large extent in developed countries, however based on findings in

this research, Cause Marketing is in its teething stage in Nigeria. Therefore Not-for-profit

organisations can use these findings for the mutual benefit of both their charity cause and

the goal of the brand at hand.

66

5.3 Recommendations

Further research that can evolve from this dissertation is the effect of the conceptual

model of the relationship between CRM and Customer Retention on specific

industries. In addition, the model of the relationship between CRM and Customer

Retention could be studied and further developed.

67

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APPENDIX

INTERVIEW SCHEDULE

Opening

My name is Rita Omovbude, I’m conducting a research on ‘how the use of Cause

Marketing influences customer retention of a highly publicized brand’ and since you

interact constantly with clients of companies who require CSR interventions like Cause

Marketing, I’d like to know what clients you work for, your opinion about Cause

Marketing in Nigeria and its significance to customer retention. I hope to use the

information to understand CRM in Nigeria better. This interview will only take

15minutes.

1. What PR Company do you work for and what clients do you manage?

2. What do you consider to be Cause Marketing?

3. Can you tell me about a Cause Related Marketing Campaign or Activity you’ve

been involved in, experienced or observed?

4. Would you proffer ‘the use of CRM’ to you clients?

a) If yes or no why?

5. Is building a good brand image a major reason you would ‘use of CRM’? If yes

how, if no why?

6. Is achieving set sales target a major reason you would use CRM? If yes how, if no

why?

7. Is achieving brand equity a major reason you would 'use of CRM’? If yes how, if

no why?

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8. Is reinforcing a brand’s positioning a major reason you would 'use of CRM’? If

yes or no why is this so?

9. Is Corporate Transformation a major reason you would 'use of CRM’? If yes or

no please explain the reason.

10. Does the use of CRM contribute significantly to customer retention? If yes or no

please state why this is the case?

11. In what way does the use of CRM especially during company publicity activities,

contribute or influence customer retention?

Conclusion

12. Is there anything else you would like to add?

i) Summary of the points made

ii) Thank you for your time.

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A QUESTIONNAIRE SEEKING TO UNDERSTAND HOW THE USE OF CAUSE MARKETING INFLUENCES CUSTOMER RETENTION OF A HIGHLY

PUBLICISED BRAND.

Thank you for choosing to take part in this survey. This research is a partial fulfillment of academic work at the School of Media and Communication, Pan Atlantic University. The aim of this project is to find out if Cause marketing, which is a strategic marketing tool influences customer retention of a highly publicised brand.

Your sincere opinion will help various stakeholders in more effective communication, thereby affecting society positively.

Section A: Background Information

1. AGE 18-24 25-34 35-44 45-54 55-64

2. GENDER: Male Female

3 INDUSTRY: Advertising & Marketing Telecommunications Financial Sector Food/Beverages others

3. How many years have you been in this industry? 2-3 3-4 4-5 5 and over

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Section B:

This rating should guide your responses. Please tick appropriately. 5=Strongly agree 4=Agree 3=I don’t know 2= I disagree 1=I strongly disagree

S/N Question 5 4 3 2 1

1 Cause Marketing is good for building brand image

2 Cause Marketing is good for achieving set sales target

3 Cause Marketing is good for achieving brand equity

4 Cause Marketing is good for reinforcing a brand’s positioning

5 Cause Marketing is good for achieving corporate transformation

6 There is a clear cut difference between Cause Marketing and Corporate Social Responsibility

7 Cause Marketing is in its teething stage in Nigeria

8 Publicity of a brand that supports a cause is very important

9 Publicity of a brand that supports a cause is not necessary

10 Publicity of a brand that supports a cause is neither important nor necessary

11 I will stick to a brand that supports a cause

12 I will stick to a brand that supports a cause I am emotionally connected to

13 I will stick to a brand that supports a cause only if the brand is of good quality

14 I will only stick to a brand I perceive to be good or stand for something good

Dissertation on the Use of Cause Marketing

Marketing

Transcript of Dissertation on the Use of Cause Marketing