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How to present donations: the moderating role of numeracy in cause-related marketing

Janet Kleber (Department of Marketing, WU Vienna University of Economics and Business, Vienna, Austria, and Department of Psychology, Alpen-Adria-University of Klagenfurt, Klagenfurt, Austria)
Arnd Florack (Department of Psychology, University of Vienna, Vienna, Austria)
Anja Chladek (Department of Psychology, University of Vienna, Vienna, Austria)

Journal of Consumer Marketing

ISSN: 0736-3761

Article publication date: 9 May 2016

1857

Abstract

Purpose

Cause-related marketing (CRM) is a sales strategy that is used to improve the success of a product by including a donation to a charitable cause in its price. While marketers can present CRM donations to consumers as either absolute amounts or percentages, the predominant practice in marketing is to use the latter. As the influence of such presentation formats is not well understood, the purpose of this paper is to systematically examine their effects while taking into account the numerical ability (numeracy) of the consumers.

Design/methodology/approach

In two experiments, the presentation format of the donation amounts (absolute vs percentage) were manipulated and individual differences in numeracy were measured. The product type (hedonic vs utilitarian) and sales price were varied. We found this effect for high and low price levels and for hedonic and utilitarian products.

Findings

The results of both experiments consistently supported the hypothesis presented in this paper that for people with lower numeracy, their purchase intentions were higher when absolute donation amounts were presented. We found this effect for high and low price levels and for hedonic and utilitarian products.

Originality/value

The present paper shows that the current practice of presenting donations in percentages is inferior to presenting donations in absolute amounts because a large number of consumers have trouble interpreting percentages appropriately. Therefore, it indicates that the default option for marketing managers should be to present donations in absolute amounts for hedonic and utilitarian products with low and high prices.

Keywords

Citation

Kleber, J., Florack, A. and Chladek, A. (2016), "How to present donations: the moderating role of numeracy in cause-related marketing", Journal of Consumer Marketing, Vol. 33 No. 3, pp. 153-161. https://doi.org/10.1108/JCM-12-2014-1240

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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