Cause-related marketing could dramatically increase sales for consumer brands with increases of up to 74% being observed, according to the '2008 Cone/Duke University Behavioural Cause Study'.
The study by Cone and Duke University's Fuqua School of Business concluded that cause-related marketing can actually have a significant role in driving consumers' purchase decisions.
During the first phase of the study at Duke University, 182 participants evaluated a new regional magazine and were exposed to either a cause-related or generic corporate advertisement for one of four focus brands. Afterward, they entered a mock convenience store with nearly 150 product lines, and were given real money to purchase a product in each of the four categories.
The study revealed several interesting findings, including a substantial cause-related sales lift for two of the four consumer packaged goods categories tested:
- A 74% increase in purchases for a shampoo brand when associated with a cause. Nearly half (47%) of the participants who saw the cause-related message chose the brand while only 27% of those who saw the generic corporate advertisement chose the brand.
- A 28% increase in purchases for a toothpaste brand when associated with a cause. Nearly two-thirds (64%) of the participants who saw the cause message chose the target brand compared to only 50% who viewed the generic corporate advertisement.
There were also modest increases in the other two product categories tested (potato chips and light bulbs). Qualitative consumer responses showed that the issue (the overall cause), the non-profit (the organisation representing the cause), and the inherent nature of the product were all key factors in making cause-related purchasing decisions. This helps to explain why changes in purchase decisions in the chips and light bulb categories were not significant.
In the second phase of the research, Cone and Duke validated the sales increases for shampoo and toothpaste by replicating the study online among a representative sample of more than 1,000 North American adults. Interestingly, participants spent nearly twice as long reviewing cause-related adverts than they did the general corporate adverts. This resulted in a sales increase of 19% - very similar to the lab study for the target toothpaste brand. Moreover, although the shampoo brand increased by only 5%, sales among its target audience of women increased by nearly 14%.
"It's much easier to make a purchase by clicking a button than it is to pick up and experience a brand in the richer store environment," explained Gavan Fitzsimons, Duke marketing professor and lead researcher on the study. "The results of our study probably lie between the impulsive online shopper and the deliberate in-store shopper. One thing we know for sure is that consumers are paying more attention to cause-related messages and, as a result, are more likely to purchase."
This is good news for marketers because consumers revealed that they are happy to reward companies that give back with both goodwill and money:
- 85% said they have a more positive image of a product or company when it supports a cause they care about;
- 85% feel that it is acceptable for companies to involve a cause in their marketing;
- 79% would be likely to switch from one brand to another when price and quality are about equal, as long as the next brand is associated with a good cause;
- 38% said they had purchased a product associated with a cause in the past 12 months.
The leading issues that consumers wanted companies to address are:
- Education: 80%;
- Economic development: 80%;
- Health and disease: 79%;
- Access to clean water: 79%;
- Environment: 77%;
- Disaster relief: 77%;
- Hunger: 77%.