2.5.1 The Relationship Between Altruistic Behavior and CRM
It is now important to examine how socially responsible behavior on the consumer side, in the form of altruistic or charitable giving, can be extended to a CRM context. This altruistic behavior is naturally at least a partial driving force behind CRM purchases. Based on the previous discussions, we are clearly aware of the vast importance that charity donations made by individuals have for our society, and the resulting need for organizations to adopt CSR business practices that can resonate effectively with consumers.
Links between a sense of altruism and perceptions of CRM have been examined previously in a study by Webb and Mohr (1998), which provides numerous insights into the manner and to which degree consumers perceive CRM to be a true form of altruism,
as well as potential caveats when this perception turns negative. Overall, the results of this qualitative study on consumer attitudes and perceptions of CRM as a form of altruism reveals that, with the exception of a relatively small group of highly skeptical consumers (who are most likely skeptical of all advertising overall), the majority possess relatively favorable attitudes towards CRM (Webb and Mohr, 1998). A study by Patterson et al. (1992) also dealing with consumer perceptions towards CRM found that participants agreed that CRM can be effective in supporting charitable causes.
Additionally, this study revealed gender differences with regards to such perceptions, with women possessing more favorable attitudes towards the firm and the cause than men (Patterson et al., 1992). This demonstrates that consumer perceptions towards CRM involves a complex set of factors, including culture, which is further explored in the following section.
These generally positive findings as to consumer perceptions towards CRM advertising are supported by other work on helping behavior by Strahilevitz and Myers (1998) which looked at the consumer benefits derived from giving. Their study proposes a simple consumer benefit model concerning CRM purchase motivation in that essentially, by offering a product with a linked in donation to charity, firms are effectively providing consumers with two separate positive outcomes for one price (Strahilevitz and Myers, 1998). In the case of CRM activities, this extra incentive aspect is far less tangible, and although it has been described very simply as a utility that is far more “selfless”
(Strahilevitz and Myers, 1998).
While these findings generally reveal a positive state of affairs, numerous caveats nevertheless remain. Firstly, Bendapudi et al. (1996) poise that the donor must naturally first “believe the charity's message depicting need”. They attest that there is a greater
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possibility of this cognitive connection being made for more recognizable charities than lesser knows ones. Next, as the importance of traditional purchase criteria (i.e. cost, quality) increases (as they do for a large segment of consumers, such as the highly price conscious), and as the level of consumer knowledge decreases of past socially responsible acts and programs of a firm, the effect of CRM programs on purchase intention diminishes (Webb and Mohr, 1998). This suggests that it is questionable whether a CRM program can remain successful in a standalone fashion, as the only component in a firms’ overall CSR activities, and that CRM programs are more likely to succeed within a context of a successful, broader corporate philanthropic program.
Furthermore, Patterson et al. (1992) discovers that participants have “some concerns that the firm might be exploiting the cause”. As well, a study by Lavack and Kropp (2003) further comments that the corporate motivation for engaging in CRM programs tends to be profit oriented as opposed to purely altruistically motivated, and that the extent of this profit motivation has caused concerns regarding the commercialization of CRM. This raises another important issue surrounding negative backlash effects. The above discussions remind us that despite the general tendency towards positive consumer perceptions towards CRM initiatives, there are nevertheless numerous caveats which must be carefully considered in order to ensure successful implementation and consumer adoption.
In addition to the above considerations, past work on helping behavior in general has revealed the importance of the charity need being deemed to be external, that is, outside of the control of the potential beneficiary (Bendapudi et al., 1996), in which it is easier for empathy to develop. Therefore, another important consideration in CRM marketing from the perspective of consumers is to employ beneficiaries which are
deemed to be in need due to causes outside of their control. Donations to medical research for example, in which the diseased state is clearly not the fault of the potential beneficiary may be more effective than, for example, alcoholics anonymous. In the later example, public perception tends to learn towards “they got what they deserved” thinking, in that, in this case, the decision to drink was in the hands of the beneficiary.
2.5.2 Cultural Differences in Response to Charity Appeals
For the purposes of this thesis, we are concerned with the differences in perceptions towards CRM advertisement campaigns between members of collectivist and individualist cultures. This understanding is to be extended within a framework of altruistic vs. egotistic message framing as discussed previously, and therefore, and of specific practical value to marketers, a better understanding of which advertisement framing method would be the most effective in reaching each group.
Han and Shavitt (1994) and Zhang and Gelb (1996) examine the effects of cultural difference on persuasion, an area that had previously received little attention when compared to other factors affected by the individualist/collectivist domain. They suggest that in general, existing advertisement media in highly individualistic societies generally focus more on individualistic ideals as compared to highly collectivist societies.
Not only are the prevalence of message framing types noted, but the overall effectiveness (attitudes towards the advertisements and purchase intentions) of these two message framing type structures are also explored. Consumers are generally more responsive to advertisement messages when they are congruent with their cultural values (Han and Shavitt, 1994; Zhang and Gelb, 1996). Congruency in this case refers to the fact that members of the more individualistic societies respond more favorably to message
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framing focused on the benefits to the self, or which reflect individualistic values as opposed to stressing group connectedness values. By contrast, message framing focusing on group welfare, belongings and altruism are more effective for members of collectivist cultures.
While these studies are not specifically concerned with charity advertising contexts, more recent work by Nelson et al. (2006) deals specifically with a charity context. We have already provided coverage of the findings of this critical past study in the section on message framing, but we will importantly point out here that the findings essentially support the earlier cultural congruency theory mentioned above (Han and Shavitt, 1994; Zhang and Gelb, 1996). We furthermore examine a pioneering work by Lavack and Kropp (2003) specifically addressing differences in attitudes towards CRM across cultures. The paper partly centers on the simple aspect of experience with and availability of the CRM concept in various markets. They find that in countries where CRM promotions are less common (such as Korea), consumers generally have less positive attitudes towards CRM (Lavack and Kropp, 2003). Conversely, this study finds that Canada (of the nations examined) had the highest positive attitudes towards CRM, due to the fact that CRM programs have been prevalent there for decades (Lavack and Kropp, 2003). Furthermore, a notion of fit to existing cultural norms emerges such that the strong tradition of charitable giving in North America is highly compatible with the practice of CRM (Lavack and Kropp, 2003). This overall tradition of charitable giving tends to be a property of the individualistic societies, whereas the collectivist societies tend to rely more on family for assistance, and therefore less on charities (Lavack and Kropp, 2003). What all of these studies and past findings tell us is that for a variety of reasons (mere exposure, fit with traditions and customs, and cultural congruency) we
cannot expect different groups of consumers across cultural lines to respond in similar manners to CRM advertising. These effects are clearly of concern to international CRM marketers and hence drive the basis of discovery for this thesis.