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Cause- Related Marketing as a Peripheral Cue?

Cause- Related Marketing as a Peripheral Cue?. Neil Mardian Michael Basil Debra Basil. What is CRM?. Definition : When a company donates a percentage of its sales or profits to a non-profit organization (for each unit sold) Use: CRM is being used more and more!. How does CRM work?.

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Cause- Related Marketing as a Peripheral Cue?

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  1. Cause- Related Marketing as a Peripheral Cue? Neil Mardian Michael Basil Debra Basil

  2. What is CRM? Definition: • When a company donates a percentage of its sales or profits to a non-profit organization (for each unit sold) Use: • CRM is being used more and more!

  3. How does CRM work? WE DON’T KNOW! Previous research has shown CRM is very effective. But mostly this has been studied with low priced products. POSSIBLE MECHANISM: • The Elaboration Likelihood Model (ELM) might predicts it works as a peripheral cue

  4. Objectives of the Study • Examine the whether the effects of CRM hold for high priced products. • Examine if the effects of CRM also hold for high involvement situations. • Study whether CRM functions as a peripheral cue. • Examine if the ELM can explain how cause-related marketing influences consumer attitudes and purchase intentions.

  5. Study Design 3 Stages • Pre-Test #1 (n=28) • Pre-Test #2 (n=46) • Experiment(n=160)

  6. Pre – Tests #1 and #2 Pre-Test Objectives: • To find two high and low priced products that had similar levels of involvement • To find two equally perceived brands for each of the two high and low priced products (8 brands total) Results: • 2 High Priced Products (PDA, In-line skates, Condoms & Toothbrushes) • 2 Brands for each: • PDA = Palm & Compaq • In-Line Skates = CCM & Rollerblade • Condoms= Trojan & Lifestyles • Toothbrushes= Crest & Oral B

  7. Experimental Design 2 x 2 x 2Fully Crossed, Mixed Factorial Design • Involvement (Hi or Low) • Price (Hi or Low) • CRM (Present or Absent) Within Subjects Factors: Each subject viewed both the…. • High & low involvement situations • High & low priced products • With and without CRM

  8. Experimental Design High Involvement SituationLow Involvement Situation

  9. Hypothesis #1 Ads with CRM will lead to more positive attitudes and higher purchase intentions than advertisements without CRM

  10. Hypothesis #1 Results for Purchase Intentions Hypothesis #1 Results for Consumer Attitudes 3.8 3.75 3.4 3.7 3.3 3.65 3.2 3.6 3.1 3.55 3 3.5 2.9 3.45 2.8 3.4 2.7 3.35 CRM No CRM CRM No CRM Hypothesis #1 Results • The main effect relationship for H1 was supported

  11. Hypothesis #2 A two-way interaction is predicted, such that: • In low involvement situations, ads with CRM will lead to higher purchase intentions than ads without CRM. • In high involvement situations, CRM ads will lead to similar purchase intentions than advertisements without CRM.

  12. Hypothesis #2 Results for Purchase Intentions Hypothesis #2 Results for Consumer Attitudes 3.4 3.8 3.75 3.3 3.7 3.2 3.65 3.1 NO CRM NO CRM 3.6 3.55 3 With CRM With CRM 3.5 2.9 3.45 2.8 3.4 2.7 3.35 LO Involve HI Involve LO Involve HI Involve Hypothesis #2 Results • The two-way interaction between involvement and CRM was NOT supported

  13. Hypothesis #3 Predict an interaction between price and CRM such that: CRM will be more effective for low priced products than high priced products

  14. Hypothesis #3 Results for Consumer Attitudes Hypothesis #3 Results Purchase Intentions 3.8 3.4 3.75 3.3 3.7 3.2 3.65 NO CRM NO CRM 3.6 3.1 3.55 With CRM 3 With CRM 3.5 2.9 3.45 2.8 3.4 3.35 2.7 LO Price HI Price LO Price HI Price Hypothesis #3 Results • The effectiveness of CRM did not depend on the price of the product. H3 was NOT supported

  15. Conclusions • Consumers tend to responded positively to CRM offers (regardless of involvement with or the price of the product) • Higher involvement situations do not decrease the effectiveness of CRM • Due to their effectiveness in high involvement situations, this suggests that CRM is not just a peripheral cue.

  16. Real World Implications Objective To provide insights for managers on when to potentially use CRM techniques with their products Result Use CRM claims whenever possible, as they are a useful marketing strategy to influence the consumers’ attitudes and purchase intentions

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