Understanding consumer

responses to retailers cause

related voucher schemes
Evidence from the UK grocery sector
Matthew Gorton
Newcastle University Business School, Newcastle University,
Newcastle upon Tyne, UK
Robert Angell
Cardiff Business School, Cardiff University, Cardiff, UK
John White
Plymouth University Business School, Plymouth University, Plymouth, UK, and
Yu-Shan Tseng
Newcastle University Business School, Newcastle University,
Newcastle upon Tyne, UK
Abstract
Purpose The purpose of this paper is to present and test a conceptual model for understanding
consumer responses to cause related voucher schemes (CRVS), considering the initiatives of two
UK-based grocery retailers (Tesco and Morrisons).
Design/methodology/approach The conceptual model incorporates six theoretically derived
exogenous constructs, i.e. status of the cause, company-cause t, personal involvement with the cause,
attitudes to the company, perceived sincerity of the company and perceived ubiquity. These are
hypothesized to inuence consumer responses to three primary endogenous variables: interest in the
company, favourability of attitudes to the company and use (impact on purchasing intentions). The
model is tested using survey data (n 401) collected in two UK cities.
Findings All but two of the hypothesized path relationships were conrmed and the percentage of
explained variance for the primary endogenous variables compares well against previous models.
Attitudes to the company, perceived ubiquity and favourability were identied as signicant
predictors of behavioural intentions (use).
Practical implications In selecting a cause, managers need to think carefully about the status of
the cause, its degree of t with the company and how to build personal involvement. CRVS initiatives
should be focused, with consistency in communication. If a company suffers from negative consumer
attitudes, a CRVS alone is unlikely to turn around their business performance.
Originality/value The paper represents the rst academic assessment of consumer responses to
CRVS, introducing and validating a conceptual model.
Keywords Cause related voucher schemes, Structural equation modelling, Grocery retail, Vouchers,
Retailing
Paper type Research paper
Introduction
Western markets have witnessed increased practitioner and academic interest in
cause-related marketing (CRM) (Adkins, 1999; Barone et al., 2007; Docherty and
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0309-0566.htm
Responses to
voucher schemes
1931
European Journal of Marketing
Vol. 47 No. 11/12, 2013
pp. 1931-1953
qEmerald Group Publishing Limited
0309-0566
DOI 10.1108/EJM-06-2011-0286
Hibbert, 2003; Folse et al., 2010; Mekonnen et al., 2008). Larson et al. (2008, p. 272) dene
CRM as any marketing activities in which company donations to a specied cause are
based upon sales of specied goods or services. The Economist (2010, p. 74) denes it
more simply as trying to win and retain customers by doing good. CRM is therefore a
strategic marketing tool which seeks to achieve corporate and social/charitable
objectives. While CRM initiatives have been implemented in a range of industries, it is
particularly common in retailing (Barone et al., 2007). Major retailers that have recently
operated CRM initiatives include IKEA (Unicef) and gap (Project RED).
In the UK, when measured by customer involvement, multiple grocery retailers
operate the largest CRM schemes (Barda, 2010). The leading grocery retailers have
adopted initiatives with similar structural characteristics customers receive
vouchers linked to their total spend, which can be donated to, for example, schools and
sporting clubs. Schools and clubs then redeem these vouchers, at levels set by the
retailers, for equipment and other goods. These schemes therefore do not involve a
single product or single designated cause, and the cause related activity is indirect
schools and clubs will only benet if customers accept and pass on vouchers received
in store. These initiatives can be labelled cause related voucher schemes (CRVS). To
date, there has been no academic evaluation, to the best of our knowledge, of this novel
form of CRM.
This paper introduces and tests a conceptual model for understanding consumer
responses to CRVS using structural equation modelling (SEM). In presenting and
justifying the model, we argue it transcends previous frameworks by modelling the
relationships between, and predictors of, three endogenous constructs (interest,
favourability and use). Previous research has largely depended on a single outcome
construct, combining attitudinal response and behavioural intentions, or assumed that
all independent variables affect endogenous constructs in a homogenous manner. We
model a sequential relationship between the endogenous constructs of
interest . favourability . use, seeking to unpack the black box of consumer
responses and provide a greater understanding of how various independent and
endogenous constructs interact. Validation of the model draws on data relating to the
CRVS of two UK-based food retailers (Tesco and Morrisons). Based on the empirical
ndings we set out lessons for the practical management of CRVS. The next section
outlines in greater detail how the paper builds on, and contributes to, the wider CRM
literature.
Previous research
Table I summarizes the ndings of 18 key papers in the CRM literature. The aim is not
to provide a comprehensive assessment of all previous research on CRM, but rather to
focus on empirical research, adopting a quantitative approach, which has identied
signicant determinants of consumer responses. Table I also includes the work of
Speed and Thompson (2000), which despite not focusing on CRM specically,
ascertained predictors of consumer responses to cultural sponsorships (Olson, 2010)
and, consequently has relevance here.
To date, most research on consumer responses to CRM initiatives has followed an
experimental design, evaluating the impact on consumer attitudes/purchase intentions
of altering a key attribute. Key attributes studied include hypothetical donation
amounts (Folse et al., 2010), the nature of the cause (Barone et al., 2007; Ellen et al.,
EJM
47,11/12
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Table I.
EJM
47,11/12
1934
2000), product type (Strahilevitz and Myers, 1998; Strahilevitz, 1999), attitudes to the
company (Yoon et al., 2006), and perceived t between the company/product and cause
(Barone et al., 2007; Gupta and Pirsch, 2006; Hoek and Gendall, 2008; Lafferty, 2007;
Nan and Heo, 2007; Samu and Wymer, 2009).
The majority of studies have either dened a single dependent variable, most
commonly attitudes to the initiative (Nan and Heo, 2007) or a single endogenous
construct that combines attitudes and behavioural intentions (Folse et al., 2010;
Simmons and Becker-Olsen, 2006). A focus purely on attitudes to the initiative is
limited, as a CRVS may generate, for example, a favourable attitudinal response but
not necessarily alter purchase intentions. For marketing managers concerned with the
bottom line, the impact on purchase intentions will be of greater relevance than
attitudes per se. Similarly, models which contain an endogenous construct that
combines both attitudinal change and behavioural intentions are inappropriate. Speed
and Thompson (2000) do distinguish between three outcomes (labelled interest,
favourability and use[1]) but assume that all independent variables affect them in the
same manner. This ignores the possibility that determinants vary across outcomes and
overlooks the potential interrelationships between their three specied dependent
variables. For instance, stimulating interest and favourability may be signicant
prerequisites for affecting consumers purchasing intentions.
The majority of previous studies adopted an experimental design, measuring the
impact of treatments for a limited number of independent variables, e.g. perceived t.
However, considering predictors in isolation lacks precision and fails to capture the
relative contribution of particular variables (Katz, 1999). With the exception of Olson
(2010), all of the studies documented in Table I relied to some extent on ctional cases
(imaginary brands, charities and/or alliances). The use of ctitious cases may lack
realism, so that, as Lafferty (2007, p. 452) notes future research should look at real
companies and brands along with real causes.
Conceptual framework for modelling responses to CRVS
Figure 1 shows the conceptual framework for modelling consumer responses to CRVS.
It incorporates nine constructs. Two constructs relate to associations of the cause:
perceived status of the cause and personal involvement with the cause. Three
constructs capture associations of the company (attitude to the company, perceived
sincerity and perceived ubiquity). Company-cause t relates to the degree of shared
associations between the two entities (cause and rm). The change in purchasing
intentions (use) is identied as the highest-level outcome of CRVS, which requires the
stimulation of consumer interest as well as more favourable attitudes (favourability).
In selecting relevant model constructs from the literature three criteria were
employed: the availability of validated measures, uniqueness of construct, and
applicability to CRVS. Regarding the last criteria, nature of the product and rm
donation amount were excluded as potential constructs. Grocery retailers sell a wide
range of food and non-food items, with a mixture of practical and frivolous goods, to
use the terminology of Strahilevitz and Myers (1998). CRVS are therefore not linked to
a specic product or type of good. As the UK retailers also set xed voucher to
consumer expenditure ratio (one voucher for each 10 spent), donation amount was
also excluded. Barone et al.s (2007) notion of retailer motive and Ellen et al.s (2000)
company commitment construct overlap signicantly with perceived sincerity. Barone
Responses to
voucher schemes
1935
et al. (2007) incorporated cause afnity as a predictor but this is indistinct from
personal involvement with the cause. Similarly, Simmons and Becker-Olsens (2006)
notion of clarity of positioning is indistinct from perceived ubiquity.
Model constructs and hypotheses
Status of the cause relates to the degree to which it is viewed as signicant and
important by consumers regardless of whether they directly benet. Previous research
on charitable giving (Bennett, 2003) suggests status of the cause is a predictor of
personal involvement. If consumers perceive a cause as unimportant or irrelevant, they
are unlikely to be a strong supporter or regard the cause as important to themselves. If
a cause is regarded as unimportant and irrelevant, consumers are also likely to regard
the companys actions as inappropriate and insincere (Hoefer et al., 2010), and
therefore question the validity of the initiative. In addition, Lafferty (2009) argues that
causes with a high status are more likely to stimulate consumer interest. In contrast, if
consumers deem the cause irrelevant, interest in an initiative is likely to be low. On this
basis, we propose:
H1. Status of cause will positively inuence personal involvement.
H2. Status of cause will positively inuence perceived sincerity.
H3. Status of cause will positively inuence interest.
Company cause t relates to the degree of similarity and compatibility that
consumers perceive between a social cause and brand (Bigne-Alcaniz et al., 2012, p. 3).
Where the rm and cause are viewed as compatible, the CRM initiative is more likely to
be regarded as appropriate and genuine (Basil and Herr, 2006), with the companys
actions perceived as sincere (Ellen et al., 2006; Olson, 2010). Conversely, low perceived
t is likely to be at odds with prior knowledge, resulting in greater consumer
scepticism (Menon and Kahn, 2003), since the alliance is more difcult to integrate into
existing memory structures (Becker-Olsen et al., 2006).
Figure 1.
Conceptual framework for
modeling responses to
CRVS
EJM
47,11/12
1936
The associated learning model (Mackintosh, 1975; Hall, 1991) assumes that
long-term memory is a network of nodes connected by associative links that can be
reconstructed as a result of experience and learning. In the context of CRM, Till and
Nowak (2000) argue that companies and brands attempt to reconstruct the associative
networks of their target market by forming or strengthening an associative link
between the company and a particular cause. It is assumed that higher perceived t
between two stimuli (in this case cause and company) facilitates the establishment of
associative links (Gupta and Pirsch, 2006) and that people prefer consistency, or what
Till and Nowak (2000) refer to as high perceived belongingness between two stimuli.
Gupta and Pirsch (2006) and Nan and Heo (2007) both found that high company-cause
t was positively correlated with favourable attitudinal responses. This implies that:
H4. Company cause t will positively inuence perceived sincerity.
H5. Company cause t will positively inuence favourability.
Personal involvement with the cause relates to consumers identication with a
particular cause (Olson, 2010). This is usually conceptualised as a personal connection
or bridging experience for an individual (Grau and Folse, 2007, p. 20). Identication
with a cause varies according to its perceived intensity (arousal, interest), direction
(level of generality) and relevance (Broderick et al., 2003). Previous research (Barone
et al., 2007; Sargeant, 1999) suggests that psychological involvement with the cause is a
signicant determinant of interest, with higher levels of involvement leading to more
efcient and favourable processing of charitable marketing messages (Grau and Folse,
2007). Similarly, qualitative research undertaken by Broderick et al. (2003, p. 601) on
reactions to CRM initiatives linked to breast cancer, indicated that respondents had to
feel a certain degree of involvement in the campaigns and it is clear that the specic
cause was an important factor in stimulating interest and favourable responses to a
particular companys activities. This implies that:
H6. Personal involvement will positively inuence interest.
H7. Personal involvement will positively inuence favourability.
Perceived sincerity of the company refers to consumers evaluation of a companys
motives underpinning a CRM initiative (altruistic versus self-interested). Research on
CSR activity notes that it is na ve to assume that all consumers always take at face
value a companys pro-social intentions (Strahilevitz and Myers, 1998; Yoon et al.,
2006). Rather, consumers are likely to vary in their perceptions of a companys motives.
Osterhus (1997) argues that unless consumers trust the company, they will be
unwilling to engage with any CRM initiative, so that it fails to stimulate their interest
or generate a favourable change in attitudes. In fact if consumers are suspicious of a
companys motives, a CRM initiative may even backre, resulting in more
unfavourable attitudes than if it was absent (Yoon et al., 2006). In keeping with this,
a recent empirical study conrmed that perceived sincerity has a positive inuence on
sponsor equity (Olson, 2010). We therefore propose:
H8. Perceived sincerity will positively inuence interest.
H9. Perceived sincerity will positively inuence favourability.
Responses to
voucher schemes
1937
Perceived ubiquity relates to consumers assessment of the focus and clarity of
positioning in a companys CRM initiatives. Firms could attempt to build associations
with multiple or single causes. Following associative learning theory, brands and
causes represent nodes (concepts) in memory with which consumers have built
associations with other nodes (concepts) (Till and Nowak, 2000, p. 477). The
associative network for a particular brand is the sum of all these connected nodes. For
instance, a consumer may associate Cadburys with chocolate, childhood,
Birmingham and Quakers. Associative networks will vary between consumers, for
instance some consumers may associate Cadburys with Quakerism but others may be
unaware of the origins of the brand. In CRM, companies attempt to develop additional
associations (with a particular cause). However, this process may be subject to
blocking (the presence of impediments to building an associative link). The larger the
associative network of a brand and the more varied the causes endorsed, the more
difcult it becomes to add additional associations (Till and Nowak, 2000). This
suggests that when perceived ubiquity is high, blocking prevents CRVS initiatives
from stimulating favourable attitudinal change or impact on purchasing intentions, so
that:
H10. Perceived ubiquity will negatively inuence favourability.
H11. Perceived ubiquity will negatively inuence use.
Attitudes to the company captures consumers degree of liking for the organisation.
Basil and Herr (2006), Gupta and Pirsch (2006), Olson (2010) and Sen and Bhattacharya
(2001) all found that attitudes to the company affect responses to CRM initiatives, with
consumers more likely to react favourably to rms they already hold in high regard.
Conversely, negative attitudes to the company/brand will limit the extent to which a
CRM initiative generates favourable attitudinal change (Basil and Herr, 2006). Several
practical cases of failed CRM t with this proposition; for instance, Berglind and
Nakata (2005) ascribe the negative consumer responses generated to a proposed CRM
partnership between the Sunbeam Corporation and the American Medical Association
in part to negative prior attitudes of the rm and its CEO. It is therefore assumed that:
H12. Attitude to the company will positively inuence favourability.
H13. Attitude to the company will positively inuence use.
The relationship between the constructs interest, favourability and use assumes a
hierarchical sequence of effects akin to, for example, the attention, interest, desire,
action (AIDA) model of consumer behaviour. Such hierarchy of effect models suppose
consumers pass through a series of response levels before any potential action the
purchase or use of a product or service (Kitchen, 1999). The adjusted version of this
framework, outlined in the study of Speed and Thompson (2000), species
favourability as an alternative construct for desire, and employs the term use in
place of action. While describing a sequential relationship of
interest . favourability . use, Speed and Thompson (2000), however, model the
three dependent constructs independently of each other. This overlooks the potential
for interest and then favourability to explain variation in the highest order of the model
in this case use. We therefore explicitly model the sequential relationships between
interest, favourability and use, so that:
EJM
47,11/12
1938
H14. Interest will positively inuence favourability.
H15. Favourability will positively inuence use.
Indirect effects
The literature on consumers engagement with charities (Bennett, 2003) and CRM
(Gupta and Pirsch, 2006) suggests the inuence of status of the cause is contingent on
other factors. For instance, Hajjat (2003) identies personal involvement as a mediating
factor. He argues that involvement, dened in terms of personal relevance and where
the cause has signicant consequences for a consumers well-being, amplies the effect
of a high status cause. For instance, nearly all consumers may regard cancer research
as an important cause, but interest in a related CRM initiative will be higher where a
consumer personally or their immediate family has been affected by cancer. This
implies:
H16. Status of cause will positively inuence interest through personal
involvement.
The effect of status of the cause could be weakened if consumers perceive a rms
motives for linking with an important and high prole cause to be insincere (Berglind
and Nakata, 2005). In this case, a rm may be regarded as exploiting the cause for its
own benet (Barone et al., 2007). For example, while no one has questioned its
importance, CRM initiatives linked to breast cancer have received some harsh criticism
for creating a cult of pink ribbons that exploits the cause for corporate gain (Sulik,
2011). However, if a rm is regarded as being sincere in its motives it is likely to
amplify positive responses to CRM initiatives linked to high status causes, so that:
H17. Status of cause will positively inuence favourability through perceived
sincerity.
Barone et al. (2007) argues that the relationship between company-cause t and
consumer responses may be more complex than assumed in much previous research.
They argue (2007, p. 439) that suspicions of a companys motive in CRM may
undermine inferences underlying categorization-based evaluative processing. As
such suspicions of motive can diminish the role of t on consumer evaluations of CRM.
Their empirical analysis conrmed that the effects of retailer-cause t were moderated
by consumer perceptions of the retailers motive for engaging in CRM:
H18. Company-cause t will positively inuence favourability through perceived
sincerity.
Overview of UK food retail market and CRVS
Table II presents an overview of the four main grocery retailers in the UK and their
engagement with CRVS. Tesco is the undisputed market leader; its market share is
almost that of the second and third largest chains combined and its prole of shoppers
resembles closely the overall composition of the UK population (Mintel, 2011). It was
the rst grocery retailer to introduce a CRVS, computers for schools, IN 1992. For 12
weeks a year, Tesco shoppers are offered one voucher for every 10 (e11.95) spent (5
spend in smaller, express outlets). These vouchers could initially be redeemed by
schools for computer equipment. In 2005, Tesco launched alongside its existing
Responses to
voucher schemes
1939
voucher scheme, a sport for schools and clubs initiative with similar rules on
accumulation and redemption of vouchers, albeit not restricted to schools. In 2008 these
schemes were merged into Tesco for Schools and Clubs. In 2001, Tescos CRVS
received endorsements from the then British Prime Minister and Minister for
Education but were criticised by the consumer watchdog Which? The latter argued
that 1,000 (<e1,195) worth of computer equipment supplied by Tesco required
vouchers equating to 250,000 (e298,750) of spending by shoppers (Marketing, 2002).
Tesco (2010) reported that in 2009 more than 33,000 schools and clubs participated, and
it donated equipment worth approximately 13.6 million (e16.25 m), amounting to
more than half a million items.
Morrisons is the smallest of the big 4 grocery retailers and was the last to
introduce a CRVS, Lets Grow, in 2008. Under this initiative customers receive one
voucher for every 10 spent. Vouchers can be redeemed by schools for seeds and
gardening equipment. Morrisons designed the Lets Grow campaign to strengthen its
association with fresh food (Barda, 2010). It worked with the National Schools
Partnership to design accompanying teaching resources and lesson plans. In 2009,
direct mail to 10,000 schools and a TV advertising campaign promoted the initiative.
The campaign budget was 2.5 million (e2.99 m) and the company calculated that the
scheme generated 116 press articles with a value of 463,000 (e553,285) (Barda, 2010).
The company reported in 2008/2009 that 18,000 schools registered, of which 15,000
placed orders for gardening equipment (relating to 5.5 million children). Morrisons
donated gardening equipment worth 3.2 million (e3.82 m) and customers collected 39
million vouchers.
Methodology
To understand responses to CRVS, a questionnaire was designed in keeping with the
conceptual framework presented above. Respondents were randomly assigned to
answer either a version of the questionnaire relating to Morrisons Lets Grow or Tesco
for Schools and Clubs.
Appendix lists the items for scales used in the conceptual model. While the
questions in Appendix refer to Morrisons and Lets Grow, the Tesco version of the
questionnaire was identical apart from the difference in cause and company. Status of
the cause, company-cause t, personal involvement with the cause, perceived sincerity
and perceived ubiquity were measured using seven-point Likert scale questions.
Respondents indicated their degree of agreement with each statement. The wording of
Retailer
Market
share
Number of
stores CRVS scheme title
Date of
introduction
Tesco 25.9 2,715 Tesco computers for schools, then sport
for schools and clubs
1992, 2005
J Sainsbury 13.7 934 Active kids 2005
Asda 14.0 385 Go green for schools 2008 only
Morrisons 10.4 439 Lets Grow 2008
Total 64.0 4,473
Source: Own composition, market data from Mintel (2011)
Table II.
Prole of main grocery
retailers in the UK and
engagement with CRVS
EJM
47,11/12
1940
items for personal involvement drew on those proposed by Grau and Folse (2007).
Company-cause t was measured on a ve-item scale. The scale avoids implying any
particular basis for t but rather, following the associative learning model, abstract
notions of similarity, appropriateness and logical connection (Fleck and Quester, 2007).
The battery of items for status of the cause, perceived sincerity and perceived ubiquity
follow the validated scales of Speed and Thompson (2000). Semantic differential scales
captured attitudes to the company following items presented in Mitchell and Olson
(1981). These have been used by, amongst others, Folse et al. (2010)
(e.g. unfavourable/favourable, bad/good).
Respondents also indicated the extent to which the CRVS initiative sparked an
interest in the company and its promotions (interest), affected their longer-term
attitudes toward the company (favourability), and caused a higher willingness to buy
the companys products (use). Interest, favourability and use were all measured on a
seven-point Likert scale in which respondents were instructed to assign their level of
agreement to three items for each construct. These measures were also adopted from
Speed and Thompson (2000).
The dataset comprised a total of 401 responses. Data collection took place in two UK
cities: Newcastle upon Tyne (n 204) and Plymouth (n 197). All respondents were
adults of working age (18-65), although not necessarily in employment, and undertook
food shopping. To avoid prior exposure/non-exposure biases, only those familiar with
the stores in question (though not necessarily regular customers of Morrisons and
Tesco) were included in the study. Questionnaires were collected using street level
intercepts, conducted on different days and at varying times in selected locations. Bush
and Hair (1985) noted that consumer data from street interviews are of equivalent or
superior quality to that of alternative methods.
Table III summarises the key characteristics of the sample. 62.8 percent of
respondents are female, reecting, in part, the requirement for respondents to be
responsible for food shopping. Regarding the age prole, the sample over-represents
those aged between 21 and 30 and under-represents those aged over 41. This perhaps
mirrors the student demographic of both Plymouth and Newcastle upon Tyne as
signicant university cities the latter has a student body of approximately 57,700 out
Mean n % of sample
Male 149 37.2
Female 252 62.8
Under 21 24 6
Aged 21-30 213 53.1
Aged 31-40 85 21.2
Aged 41-50 38 9.5
Aged 51-60 32 8
Aged 61-65 9 2.2
Mean % of total grocery shopping accounted for by Asda 8.5
Mean % of total grocery shopping accounted for by Morrisons 21.6
Mean % of total grocery shopping accounted for by J Sainsbury 20.1
Mean % of total grocery shopping accounted for by Tesco 22.8
Mean % of total grocery shopping accounted for by others 26.6
Table III.
Characteristics of the
sample
Responses to
voucher schemes
1941
of a total population of 277,800 (ONS, 2010). The equivalent gures for Plymouth are
47,600 students and a total population of 255,600 (ONS, 2010). The four main UK
grocery retailers account for 73 percent of the samples total food spending. This
compares against a national market share of 73.3 percent (Table I). In the sample,
Tesco is the market leader but its share is lower compared to the national gures, while
Morrisons and J Sainsbury perform better in the sample. Morrisons strength in the
north-east and Sainsburys position in the south of England inuences this pattern.
Analysis
Conrmatory factor analysis (CFA)
The CFA followed the process of specication, estimation, modication and
re-estimation, recommended by Brown (2006). The objective was to validate each of
the nine constructs in keeping with standard practices of unidimensionality (Anderson
and Gerbing, 1988). Data were analysed using Mplus 6.1 (Muthen and Muthen, 2010).
The t of the initial CFA model was slightly below recommended criteria (Hu and
Bentler, 1999). The goodness of t indices were: comparative t index (CFI) 0.93,
Tucker Lewis index (TLI) 0.92 and root mean square error of approximation
(RMSEA) 0.07.
In this initial model, four items were identied as the cause of the poorly tting
measurement model. These were traced using the Lagrange modication indices and
by checking for areas of strain through inated standardised residuals. Concurrent
with the ndings of Speed and Thompson (2000), from which the measure is adopted,
two indicators in the perceived ubiquity construct did not converge with their
underlying factor (i.e. low factor loadings). As such, this company is clearly focused
on certain causes and this company is very selective in what causes it sponsors were
removed. To retain the congeneric measurement properties of the model, two further
items were found to be problematic. In the company-cause t measure, CCF4 (the
company and the cause stand for similar things) was found to cross-load on an
alternative construct (i.e. status of the cause), without being more substantively
explainable. In the perceived sincerity scale, PS4 (this company would probably
support the cause even if it had a lower prole) was found to load on its corresponding
factor at a level below recommended thresholds demonstrating low internal validity
(Brown, 2006). Consequently, both items had their factor loading parameters set to zero
(Anderson and Gerbing, 1988).
The model was re-estimated. Each of the factor loadings for every construct was
found to be signicant, at an acceptable level for interpretation (Table IV). The t of
the re-estimated model was still slightly below universally ideal thresholds (Hu and
Bentler, 1999), but demonstrated both a substantively explainable solution and indeed
a better tting model than in the rst attempt of tting the measurement model to the
data. The goodness of t indices were CFI 0.94, TLI 0.93 and RMSEA 0.06.
Next we performed a multi-group CFA to test for invariance in our measurement
model across the two CRVS programmes (Tesco and Morrisons). This was undertaken
to conrm whether adjoining cases into a single measurement model was empirically
appropriate. We specied a baseline model in which no equality constraints were
upheld (x
2
1,298.55; df 526) and compared this to a constrained model in which
factor loadings, variances and covariances were equal (x
2
1,317.76; df 543). A x
2
difference test revealed that freeing equality constraints did not signicantly improve
EJM
47,11/12
1942
model t (x
2
19.21; D df 17; p . 0.1). Further we tested a second model in which
intercepts were held equal (x
2
1,335.76; df 560). Once again, no signicant
differences were found between this and the constrained model (Dx
2
18; df 17;
p . 0.1). Similar to De Luca and Auhene-Gima (2007), we compared mean differences
across the two CRVS for each latent construct. Only three signicant mean differences
were observed (namely perceived sincerity, status and attitude) whereby Morrisons
scored slightly below Tesco. Given these results we proceeded with the aggregated
measurement model and tested for construct validity.
Factors Standardised estimates Standard errors Signicance ( p)
Company-cause t (CCF)
CCF1 0.718 0.029
*
CCF2 0.774 0.025
*
CCF3 0.815 0.023
*
CCF4 Eliminated
CCF5 0.801 0.024
*
Personal involvement (PI)
PI1 0.542 0.047
*
PI2 0.865 0.041
*
Attitude towards the company (AC)
AC1 0.933 0.008
*
AC2 0.949 0.006
*
AC3 0.931 0.008
*
AC4 0.923 0.009
*
Perceived ubiquity (PU)
PU1 Eliminated
PU2 0.865 0.058
*
PU3 0.616 0.050
*
PU4 Eliminated
Perceived sincerity (PS)
PS1 0.618 0.035
*
PS2 0.869 0.019
*
PS3 0.835 0.021
*
PS4 Eliminated
Status of cause (SC)
SC1 0.782 0.030
*
SC2 0.644 0.039
*
Interest (INT)
INT1 0.872 0.015
*
INT2 0.921 0.011
*
INT3 0.887 0.014
*
Favourability (FA)
FA1 0.919 0.009
*
FA2 0.955 0.006
*
FA3 0.937 0.008
*
Use (USE)
USE1 0.914 0.010
*
USE2 0.943 0.007
*
USE3 0.943 0.008
*
Note: Signicant at:
*
p , 0.01 level
Table IV.
Measurement model
estimates
Responses to
voucher schemes
1943
Construct validity
We assessed convergent and discriminant validity and Fornell and Larckers (1981)
method for average variance extracted (AVE) was used for both. AVE assumes that
the average variance explained by each latent construct is greater than its
corresponding residual error 50 percent of total variance must be explained. As such,
factor loadings are squared, summed, and divided by the error. Discriminant validity
assumes that the amount of variance explained by each factor is higher than the
squared correlation of that factor with all other constructs in the model (Fornell and
Larcker, 1981).
Table V presents the factor correlation matrix with estimates for convergent and
discriminant validity. Convergent validity was sufcient in all factors all were above
the 50 percent (0.50) threshold (Fornell and Larcker, 1981). Similarly, discriminant
validity was conrmed by the square-root of AVE scores exceeding corresponding
factor correlations.
Structural equation modelling (SEM)
Each of the exogenous factors specied in the conceptual model (Figure 1) were tested
via SEM). As three indirect paths were hypothesized in our model we rst tested the
conditions of mediation (Baron and Kenny, 1986; Prussia and Kinicki, 1996). Using the
approach of Aryee et al. (2002), three conditions were assessed. Initial evaluation of
factor correlation coefcients (Table V) indicated that independent variables were
relatively strongly associated with outcome variables (i.e. status of cause with interest
and favourability; company cause t and favourability). Similarly, independent
variables were found to correlate to a similar extent with hypothesised mediator
variables (i.e. perceived involvement and perceived sincerity). Lastly we specied the
hypothesized relationships in our model to include fully mediated (status of cause on
favourability through perceived sincerity) and partially mediated (status of cause on
interest through personal involvement; company cause t on favourability through
perceived sincerity) parameters[2]. The results are shown in Table VI.
We found support for all of our mediated paths (H16, H17, H19) although not for
the direct path between company cause t and favourability (H5) suggesting full
mediation through perceived sincerity rather than partial mediation. In fact of the
direct effects in the model, 13 of our 15 hypothesised predictions were conrmed
( p , 0.05). The only other non-signicant path was between perceived ubiquity and
favourability (H10). The largest predictor of interest was status of cause (b 0.43), for
favourability was interest (b 0.60), and for use was favourability (b 0.73). The
exogenous constructs were found to explain variance (R
2
) in the primary endogenous
factors to a high level (i.e. interest 54 percent; favourability 73 percent; use 70
percent).
Discussion
This study is the rst to model the relationships between, and predictors of, three
endogenous constructs (interest, favourability, use), providing the basis for a more
complete understanding of how CRVS works. All but two of the hypothesized path
relationships were conrmed and the percentage of explained variance for the primary
endogenous variables compares favourably against previous models (Folse et al., 2010;
Olson, 2010).
EJM
47,11/12
1944
1
2
3
4
5
6
7
8
9
C
o
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p
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y
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s
:
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t

f
a
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s
;
d
i
a
g
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n
a
l

A
V
E
(
p
A
V
E
)
Table V.
Factor correlation matrix
Responses to
voucher schemes
1945
H
P
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5
)
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r
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5
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5
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s
;
F
M

f
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;
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p
a
r
t
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(
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;
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0
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)
Table VI.
Research model
parameter estimates for
hypothesised paths
EJM
47,11/12
1946
Managers indicate that important benets sought from CRM campaigns are enhancing
corporate reputation and increasing sales (Docherty and Hibbert, 2003). The analysis
indicates that CRVS can stimulate favourable attitudinal change and behavioural
intentions. Consumer responses are thus not limited to CRVS being perceived merely
as a good thing and the results are encouraging for the retailers concerned and, more
widely, those interested in creating a CRVS. Attitudes to the company, perceived
ubiquity and favourability were identied as signicant predictors of the construct
use.
In selecting a cause, rms need to think carefully about the status of the cause and
its degree of t with the company. Consumers perceptions of the status of the cause
matter as they are a signicant predictor of interest, personal involvement and
perceived sincerity. If the cause is perceived as important, it is more likely to stimulate
consumer interest and view the companys actions in a positive light.
Another important contribution is that the ndings shed new light on the
importance of personal involvement, conrming the relationships between personal
involvement and interest and favourability and its moderating role on the relationship
between status of the cause and interest. Conventional CRM activities typically involve
the company choosing to partner with a single cause. CRVS provide customers with
greater exibility, allowing them to choose to which organisation they donate
vouchers. For instance, 18,000 schools registered for Lets Grow and one may expect
personal involvement to be higher if a customer can benet a local school and/or the
educational establishment which the customers children or grandchildren attend
compared to a distant school with which the customer has no direct connection. The
greater exibility CRVS provide to customers is likely to enhance personal
involvement and hence improve the effectiveness of CRM activities.
No direct relationship between company-cause t and favourable attitudinal
response is observed but, in keeping with the results of Olson (2010) and Ellen et al.
(2006), company-cause t is a signicant predictor of perceived sincerity. A high
degree of t appears to inhibit scepticism as consumers regard the company cause
alliance as natural and genuine. In contrast, low t arouses consumer suspicions about
the motives of the rm with the danger that the initiative appears opportunistic and
purely guided by a desire for prot. Thus, as Simmons and Becker-Olsen (2006, p. 164)
contend, a well-liked cause is not enough to ensure a good outcome, a poor t
between cause and company can lead to a negative outcome if it heightens consumer
cynicism.
CRVS will be more successful where consumers believe companies have the
interests of the cause at heart (high perceived sincerity). In other words, to use the
terminology of Ellen et al. (2006) companies must demonstrate that the CRVS is other
centred, caring for customers and communities, rather than purely self-centred. The
results are thus consistent with those of Olson (2010) and Lafferty (2007), who found
that the effect of CRM on consumer attitudes and purchase intentions was signicantly
stronger in the case of rms with high perceived sincerity/corporate credibility.
Importantly, perceived ubiquity is identied as a signicant predictor of
behavioural intentions (use). This highlights the worth of focus in operating a CRVS
and consistency in communication. Partnering with too many varied causes and
activities weakens the effectiveness of CRVS. The results are thus in harmony with
Integrated Marketing Communications theory, with CRVS being more effective when
Responses to
voucher schemes
1947
applied consistently. For instance, while Morrisons partners with thousands of
educational establishments as part of Lets Grow it does so in a coherent and focused
manner, linking gardening equipment for schools with the companys objective of
being perceived by customers as offering fresh food.
Some advocates of CRM write as though it can aid all rms, turning around a
negative brand image and business performance (Adkins, 1999). However, in keeping
with the ndings of Basil and Herr (2006), the importance of the construct attitudes to
the company indicates that CRVS are likely to garner more positive outcomes where
attitudes to the rm are already positive. This suggests that CRVS work best as a
strategic tool to enhance already favourable attitudes toward the company. Executives
seeking to address unfavourable attitudes should address rst the root cause of such
negative perceptions rather than hoping that a CRVS can provide the basis for any
turnaround in fortunes.
Limitations and further research
This study draws on examples of actual CRVS initiatives. While care was taken to
ensure that all respondents were familiar with the grocery retailers in question, to
avoid prior non-exposure/exposure biases, respondents will vary in terms of the degree
of prior exposure and the information they possess about the companies. Nonetheless
we are able to conrm that intercept scores for observed variables do not differ
signicantly amongst our two CRVS conrming measurement invariance. However,
further research using real cases of CRVS in different contexts (countries, products,
companies) could verify/augment the conceptual framework and ndings presented.
The research identied attitudes to the company as a signicant predictor of both
favourability and use. In this study, attitudes to the company were measured using the
veried scale of Mitchell and Olson (1981). Recent work in a CRM context
(Bigne-Alcaniz et al., 2012) distinguishes between corporate ability (CA) associations,
which relate to a companys record in producing goods and services, and CSR
associations which refer to notions of a companys value system and character. Both
CA and CSR may inform consumer attitudes to a company. Having demonstrated the
importance of attitudes to the company as a predictor, future modelling of responses to
CRM initiatives may benet from distinguishing between CSR and CA associations of
the rm.
The paper contributes to the literature by unpacking the relationships between
interest, favourability and use. This assumes a hierarchical sequence of effects, as
indicated (but not modelled) by Speed and Thompson (2000). While this ts with the
AIDA model of consumer behaviour, it may be that for varying products/shopping
experiences other sequences prevail, for instance use . interest . favourability for an
experiential product.
This study does not investigate consumers knowledge of the nancial value of
CRVS to supported causes. For instance we do not measure expectations regarding the
worth of the vouchers to schools and clubs in terms of redemption options. In the cases
studied here, neither Tesco nor Morrisons in promoting the scheme focus on the
number of vouchers required for receiving particular equipment by schools. Folse et al.
(2010) identify that the level of rm donation impacts positively on participation
intentions. It would be interesting to verify in this case if providing respondents with
information on their real worth alters outcomes.
EJM
47,11/12
1948
Finally, Morrisons and Tesco both market their CRM schemes as providing top up
resources to schools/clubs. It would be fruitful to analyse consumer responses if CRVS
provided core resources such as textbooks and teachers. This may generate a more
fundamental debate on the engagement of companies with what are typically regarded
as essential public services. Such research could generate an understanding of what
consumers regard as appropriate boundaries, if any, between public sector provision
and retailers CRM activities.
Notes
1. For consistency, Speed and Thompsons (2000) terminology of use is retained here but
purchase intention may be considered to be a more accurate label for the construct.
2. Although not hypothesized in our model we also ran an alternative model in which a direct
effect was specied between status of cause and favourability. This was included to conrm
that this relationship (H17) was best explained as a mediated path through perceived
sincerity. An insignicant path conrmed this assertion.
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Appendix. Description of measures
Corresponding author
Matthew Gorton can be contacted at: matthew.gorton@ncl.ac.uk
Mean (all on
seven point
scales)
Independent measures
Status of cause (SC)
SC1: this is a signicant cause 4.15
SC2: this cause is important to where I live 4.08
Company-cause t (CCF)
CCF1: there is a logical connection between Lets Grow and Morrisons 3.81
CCF2: the image of Lets Grow and the image of Morrisons are similar 3.53
CCF3: Morrisons and Lets Grow t well together 3.82
CCF4: Morrisons and Lets Grow stand for similar things 3.28
CCF5: it makes sense to me that Morrisons backs Lets Grow 4.14
Personal involvement with the cause (PI)
PI1: I am a strong supporter of this cause 5.47
PI2: this cause is important to me 4.26
Perceived sincerity (PS)
PS1: this cause would benet the grassroots level 4.57
PS2: the main reason Morrisons would be involved is because it believes the cause deserves
support 3.72
PS3: Morrisons is likely to have the best interests of the cause at heart 3.60
PS4: Morrisons would probably support the cause even if it had a much lower prole 3.94
Perceived ubiquity (PU)
PU1: Morrisons sponsors many different causes 3.85
PU2: Morrisons sponsorship is clearly focused on certain causes 4.21
PU3: Morrisons is very selective in what causes it sponsors 4.20
PU4: it is very common to see Morrisons sponsoring different causes 3.73
Attitude to the company (AC)
AC1: what is your attitude to Morrisons? bad-good 4.70
AC2: what is your attitude to Morrisons? Dislike like 4.72
AC3: what is your attitude to Morrisons? Negative positive 4.64
AC4: what is your attitude to Morrisons? Unfavourable favourable 4.62
Dependent measures
Interest (INT)
INT1: this initiative makes me more likely to notice Morrisons 4.01
INT2: this initiative makes me more likely to pay attention to Morrisons advertising 3.71
INT3: this initiative makes me more likely to remember Morrisons promotions 3.96
Favourability (FA)
FA1: this sponsorship makes me feel more favourable toward Morrisons 3.95
FA2: this initiative improves my perception of Morrisons 3.97
FA3: this initiative makes me like Morrisons more 3.84
Use (USE)
USE1: this initiative makes me more likely to buy Morrisons products 3.42
USE2: this initiative makes me more likely to consider Morrisons products the next time I
buy 3.52
USE3: I am more likely to buy from Morrisons as a result of this initiative 3.30
Table AI.
Responses to
voucher schemes
1953
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