Cause-Related Marketing: Consumer Perceptions of Philanthropic Activity

Cause-Related Marketing: Consumer Perceptions of Philanthropic Activity

Avinash Kapoor (Management Development Institute (MDI), India) and Chinmaya Kulshrestha (Management Development Institute (MDI), India)
DOI: 10.4018/978-1-4666-4430-4.ch015
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Abstract

Cause-related marketing is established by a corporation that wishes to continue its philanthropic efforts by choosing one organization, or cause, with which to associate. Simply, it is a partnership between a corporate organization and a non-profit where there is a mutually beneficial relationship. In the context of cause relatedness, a triad may consist of the consumer, the firm, and the cause. This chapter identifies and discusses the consumer evaluations along with the issues and challenges of cause-related marketing. The chapter concludes that for all businesses there is need to be more socially responsible rather than just being customer responsible.
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Introduction

Consumers today are eager to patronize businesses that share values and ethics. For-profit companies are pairing with non-profit organizations allowing a consumer to donate funds to a charity through an event, purchase, or activity sponsored by their corporate counterparts. This relationship is called cause-related marketing and offers a unique opportunity for big business and not-for-profits to share a mutually beneficial experience. Varadsrajan and Menon define the cause-related marketing movement 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.” (1988, p. 60). Cause-related marketing is established by a corporation that wishes to continue its philanthropic efforts by choosing one organization, or cause, with which to associate. Simply, it is a partnership between a corporateorganization and a non-profit where there is a mutually beneficial relationship encouraging sales of a product or positive attitude for an organization and fundraising opportunities for a charity. However, the role of philanthropic activity as a part of corporate strategy is still evolving. While not all companies have fully integrated philanthropy into their overall corporate strategy most recognize its strategic importance (Smith 1994; Tokarski 1999).

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