Relationship between Product Type and Product-Cause Fit on CRM

many consumers (Kivetz & Simonson, 2002a, and 2002b; Strahilevitz & Myers, 1998) and charity incentive is a way to provide justifiable options which reduce consumers’ guilt (Hsee, 1996). In particular, when the nature of frivolous product perceived to be harmful, the guilt may not be only from buying the pleasure-oriented consumption but also from the perception of products’ harmful nature. Thus, consumers need more powerful altruistic incentive to justify their consumption.

Syzkman (2004) indicates the sponsored cause is chosen to address the deceased use of harmful products, which could be inferred to possess the most society-serving motives and to derive the most CRM effectiveness. Take an example with a plastic company sponsors an environmental association for making up for the damage from their product. Once it is successful, consumers may be starting to pay attention to environment issues and thus decrease the frequency of purchasing this harmful product. Thus, if a selected cause is utilized to improve the company’s perceived negative image of their harmful products through a compensation act, a company’s motivation may be viewed as entirely society-responsible in consumers’ minds, because they can find compelling elements in the structure of the offer to justify the belief that the company is rejecting its basic self-interested nature. Otherwise, consumers may suspect a company’s motivation for sponsorship is sincere or just by raising the issue of companies seeking profit at the expense of the associated cause (Drumwright, 1996; Ellen et al., 2000) in order to gain their attention and preference. Thus, compared with the consistency fit, altruistic incentive seems to more strongly favor the conditions of the compensation fit, which could be viewed as a more effective way to reduce the aforementioned guilt. In particular, through supporting these types of charitable campaigns, when consumers satisfy their altruistic needs, they can feel that they are simultaneously helping the society. Therefore, when a product type characterized as being frivolous, consumers will favor CRM campaigns, especially if the cause chosen is based on some form of compensation. This decision when taken in context allows consumers to justify

their consumption.

On the contrary, utilitarian goods tend to be seen as more necessary to consumers and therefore it is easier to construct reasons for them when consumed (Hess, 1996; Shafir et al., 1993). As mentioned earlier, utilitarian consumption is deliberate and in a efficient manner (Babbin et al., 1994). Thus, a utilitarian consumer behavior has been described as task-related and rational (Batra & Ahtola, 1991; Vellucci, 1990). Based on these distinguishing consumer characteristics, the customer is viewed as rational to examine the CRM activities deliberately in the consumption of the utilitarian product.

Especially, when a company decides to sponsor a non-profit organization that is the quite opposite of the company’s core values through some kind of compensation act to society, rational consumers may generate a series of questions about why companies are involved in this type of charity activities and how sincere the company chooses a sponsored cause. Furthermore, once this campaign is against the firm’s profit, even result in the negative sales, and a company would not gain any benefit from it, consumers may attempt to uncover the underlying ulterior motive of the firm. Meanwhile, the suspicion could be easily triggered.

From the consumers’ perspective, since firms exist to enhance self-interest or to make a profit, consumers may spend considerable energy in an attempt to infer motives related to the profit-oriented goals. While these attributions are inferred to be distrustful in nature, they do typically result in a less favorable evaluation of the firm (Fein et al., 1990). Besides, consumers’ distrust and skepticism toward the company and its CSR will affect the success outcomes of a CRM activity on evaluations (Webb & Mohr, 1988).

Some of the inherent risks in this type of compensation act involve a likely reminder to rational consumers of what potential damage a company causes. Thus, there is a chance that has the potential to make CRM initiatives a very risky undertaking. In addition, consumers may be more suspicious of CRM efforts for firms in industries known to be harmful.

Consumers might view the company that undertakes socially-oriented campaigns aimed at

mitigating the less-salubrious effects of their products (Hoeffler & Keller, 2002) and improve their negative image as insincere. Hence, the CRM activities possess a constant downside of being discounted, especially under the circumstances of the compensation fit.

Based on the discussion above, the relative CRM effectiveness will differ based on the product type under different types of product-cause fit. Thus, the following hypotheses are provided:

H4a: Compensation fit between the product and the cause will be more effective when promoting frivolous products.

H4b: Consistency fit between the product and the cause will be more effective when promoting practical products.

Based on the outcome of the literature review, this research extends the concept of product-cause fit and adopts two distinct views of high fit in CRM. One is the consistency fit and the other one is the compensation fit. In this research the product type and product-cause fit will be examined separately on CRM effectiveness. Then, a two-way interaction effect is expected to occur since both factors might affect the consumer evaluations simultaneously.

Thus, effects of product type will be examined by incorporating with the different types of product-cause fit on CRM effectiveness. The conceptual framework will be a l l explored in the research. Figure 3.2 summarizes the predicted relationship between product type and the product-cause fit on CRM effectiveness in a model.

Figure 3.2 The Conceptual Framework and Hypotheses

The following section will outline the details of how the research study was conducted including the research design, pilot study, research variables, and administration of the survey procedure. A justification for the method is also provided.

3.3.1 Research Design and Pretest

In order to address above hypotheses and criteria, this study is primarily an investigation of causality. Fundamentally, this research aims to explore what influences the CRM advertising effectiveness. As a result, an experimental design was an appropriate method selected for addressing issues of causality in this context. In the experiment, it was important to select appropriate causes to represent different types of product-cause fit condition manipulated in each version of fictitious CRM advertisement. To eliminate the possibility of confounds, a pretest was conducted to reduce variations in participants’ previous perception and experiences with causes. A pretest allows for a more precise measure of the effect of the treatment (Christensen, 1994). In the following sections, the overview and results of pre-test