Overcoming the ethical challenges of cause marketing:

Abstract

Nowadays, it is not enough for companies to only focus on their business operations and financial performance. ‘Doing good’ needs to be part of the business strategy as they must do their part in addressing the grand societal challenges. Cause related marketing (CRM) is one such strategy set to address this. CRM is a powerful tool used to advance both the business and the charity (the cause) to therefore achieve mutual benefit. However, there is a dark side associated to the implementation of this theory. The impact this has on consumers can be explained by the ethical aspect associated with CRM campaigns, which positively influences the consumer’s perception of the company image. Consumers undergo an attitude change because of the link to the good cause. Customers feel that buying CRM products leads them to encounter feelings of satisfaction and altruism which leaves room for companies to take advantage of this. People are often very eager to help without ever having seen proof that donations are used effectively. The latter can be achieved through vivid advertisement and a lack of transparency. There is a problem since people choose to support a cause based on the emotional connection they feel towards the cause and the company. It was proven that if the public is skeptical about the link between company and cause, or if they perceive the company as selfish and corrupt, huge outrage will follow. However, there are several challenges since only the perception of goodwill is needed to get the public on board. It can be argued that business must balance corporate and humanitarian interest. The way to effectively employ CRM is to address the challenges associated with CRM. Balance is needed to meet the business and societal interests. During this thesis project the potential dark side was explored by identifying the ethical challenges. This is done through a case study at a company in the services industry. The data was tested in two stages via interviews and a workshop with brainstorming element, respectively. Taken together, the case study identified a set of four pillars: skepticism, altruism, shared values and transparency. These findings are of importance, because they indicate that the need for shared values is, indeed, essential to cope with ethical challenges in corporate marketing activities. However, the societal aspect of business cannot be neglected. Financial and societal goals have historically been perceived as two entirely different objectives that may even clash with each other. In reality, this dichotomy may not really hold, since a business cannot survive without society, and vice versa. Shared values represent the way in which business and society can both prosper. This finding is in line with the theory of ‘Marketing 3.0’, which argues that consumers have more power than ever before to express what the requirements of a corporate CRM campaign must be in order to satisfy the needs and wants of the public. The case company was very aware of the necessity to preventing skepticism; the company carefully avoided being perceived as self-centered in their marketing activities.