From Philanthropy Journal
Cause marketing, the practice by companies of sharing with a social cause the proceeds from the sale of products, reduces consumers’ charitable giving, a new study says.
The study by Aradhna Krishna, a professor of marketing at the Ross School of Business at the University of Michigan, shows that consumers who buy cause-marketing products end up giving less money to a social cause or charity.
Cause marketing can result in fewer donations and can decrease consumer happiness, says the study, which will be published in the July issue of the Journal of Consumer Psychology.
“Consumers appear to realize that participating in cause marketing is inherently more selfish than direct charitable donation, reducing their subsequent happiness,” compared to a direct donation, Krishna says in a statement. “Unfortunately, this doesn’t prevent them from substituting it for charitable giving, which reduces overall charitable donation.”
The study is based on research involving 300 college students to see whether consumer who bought products linked to a social cause would reduce subsequent donations to that cause.
It found that charitable giving is lower if consumers buy a cause-related product, even if the consumer already had planned to buy it, regardless of its connection to a cause.
“Consumers may think of the firm’s donation as theirs since it is facilitated by their act,” Krishna says. “In fact, this type of thinking is ‘rational’ since it allows consumers to spend less to meet their donation goals.”
The study suggests that “even if cause-marketing purchases are costless, consumers think of their purchase as a charitable act and decrease subsequent acts,” she says. “The higher the cause-marketing expenditure, the lower was the individual charitable giving.”
Overall, she says, the results of the study “raise concerns about the practice of cause marketing and suggest that consumers and policy-making bodies should be more vigilant about what cause marketing can do to individuals’ direct donations, to total donations, and to consumer happiness.”