THE USE OF CAUSE MARKETING & THE MEDIATING EFFECT OF PUBLICITY ON CUSTOMER RETENTION By EHIAGHE RITA OMOVBUDE PAU/SMC/PT3/110030 A dissertation submitted to the School of Media and Communication, Pan-Atlantic University in partial fulfillment of the requirements for the award of the degree of Master of Science of Pan-Atlantic University July 2013.
This is a dissertation on The Use of Cause Marketing and the Mediating Effect of Publicity on Customer Retention. Findings from the research conducted would be very useful to academics, marketing and marketing communication practitioners.
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THE USE OF CAUSE MARKETING & THE
MEDIATING EFFECT OF PUBLICITY ON
CUSTOMER RETENTION
By
EHIAGHE RITA OMOVBUDE
PAU/SMC/PT3/110030
A dissertation submitted to the School of Media and Communication, Pan-Atlantic
University in partial fulfillment of the requirements for the award of the degree of
Master of Science of Pan-Atlantic University
July 2013.
2
ABSTRACT
The overall goal of this research is to find out how Cause-‐Related Marketing
influences Customer Retention of a highly publicised brand. This was answered both
conceptually and empirically. Based on the circuit of power theory, the model of the
relationship between Cause Marketing and Customer Retention was developed
thereby generating seven hypotheses. A semi-‐inductive approach in the form of
mixed method was used to conduct the research. Interviews were conducted
between seven Public Relations Managers of over four years of practice, this was
audio recorded and analysed manually. Findings from the interviews therefore,
informed the design of the questionnaire for quantitative analysis and hypotheses
testing. Out of one hundred and twenty questionnaires distributed between
Marketing and Marketing Communications Practitioners, ninety-‐two responded and
using Chi-‐square to test each of the seven hypotheses against responses from the
questionnaire, significant levels of relationships were derived, therefore making the
hypotheses acceptable. The study therefore, resolved that the use of Cause
Marketing influences customer retention of a highly publicised brand. Findings of
this research adds to the body of knowledge on Cause Marketing and is beneficial to
Marketing and Marketing Communications practitioners across various industries,
as well as Not-‐for Profit organisations who seek to pitch companies.
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ACKNOWLEDGMENT
I would like to say a big thank you to GOD for every single day I was able to make it for
classes despite my crazy work schedule and for supplying the funds necessary to
complete my MSc programme. To my mother I say a big thank you for your earnest
prayers, love and support. My sisters Omoye, Gladys and Margaret, my brothers Irabor
and Eromosele and of course my little nephew Osareme whose unconditional love have
kept me going.
I also say a big thank to the SMC faculty most especially my supervisor Dr. Otubanjo for
guiding me through the process of putting my dissertation together. Obianuju and Ndidi,
thank you for effectively mediating between the students and faculty.
Dr. Tam George, for making theories of communication easy to grasp therefore making
application to this study seamless.
I appreciate my best friend Obinali Okoli for encouraging and supporting my quest for
knowledge. To Bridget and Eduvie I say a big thank you for your support in times of
need. I love you all.
I also acknowledge my past and present employers as well as my senior colleagues, Mr.
Temitayo Adereti for supporting me in achieving my goal.
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DEDICATION
I dedicate this study to my Late Father, Barrister David Osuan Omovbude, who
throughout his lifetime etched in the walls of my heart the importance of education.
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CERTIFICATION
I certify that this work was carried out by EHIAGHE RITA OMOVBUDE in the School
of Media and Communication, Pan-Atlantic University, under my supervision
Supervisor
Dr. Tayo Otubanjo (Senior Lecturer, Marketing)
School of Media and Communication
Pan-Atlantic University
Lagos, Nigeria.
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DECLARATION
I hereby declare that all the work in this dissertation is entirely my own, unless referenced
in the text as a specific source and included in the bibliography.
Name: Ehiaghe Rita Omovbude
Matric No: PAU/SMC/PT3/110030
Signed:
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Table of Contents
ABSTRACT ................................................................................................................................................2 ACKNOWLEDGMENT .............................................................................................................................3 DEDICATION ............................................................................................................................................4 CERTIFICATION ......................................................................................................................................5 CHAPTER ONE: INTRODUCTION........................................................................................................8 1.0 BACKGROUND..................................................................................................................................................8 1.1 STATEMENT OF THE PROBLEM .....................................................................................................................13 1.2 OBJECTIVES OF THE STUDY............................................................................................................................14 1.3 SCOPE OF STUDY..............................................................................................................................................14 1.4 OPERATIONAL DEFINITION OF TERMS.........................................................................................................15 1.5 SIGNIFICANCE OF THE STUDY ........................................................................................................................16 1.6 RESEARCH QUESTIONS ...................................................................................................................................17
CHAPTER TWO: LITERATURE REVIEW........................................................................................ 18 2.0 INTRODUCTION................................................................................................................................................18 2.1 THEORETICAL FOUNDATION .........................................................................................................................18 2.2 STRENGTHS AND WEAKNESSES INHERENT IN THE USES OF CRM LITERATURE..................................24 2.3 CONCEPTUAL FRAMEWORK...........................................................................................................................25
CHAPTER THREE: METHODOLOGY ............................................................................................... 31 3.0 INTRODUCTION................................................................................................................................................31 3.1 RESEARCH DESIGN ..........................................................................................................................................31 3.2 TYPES OF SAMPLING.................................................................................................................................32 3.2.1 POPULATION AND SAMPLE PROCEDURE..................................................................................................34 3.2.2 DATA ANALYSIS PROCEDURE.....................................................................................................................34
CHAPTER 4: PRESENTATION OF FINDINGS AND ANALYSIS .................................................. 36 4.1 QUALITATIVE FINDINGS .............................................................................................................................36 4.2 QUANTITATIVE FINDINGS..........................................................................................................................41 4.2.1 HYPOTHESES TESTING............................................................................................................................58
CHAPTER 5: CONCLUSION AND RECOMMENDATION .............................................................. 63 5.0 INTRODUCTION................................................................................................................................................63 5.1 FINDINGS ..........................................................................................................................................................63 5.2 IMPLICATIONS..................................................................................................................................................64 5.2.1 IMPLICATIONS TO THEORY.........................................................................................................................64 5.2.2 IMPLICATIONS TO PRACTITIONERS ..........................................................................................................65 5.3 RECOMMENDATIONS ......................................................................................................................................66
The result of the variables tested is significant. Therefore, the hypothesis Building a good brand image is a major rationale for the ‘use of CRM’ is accepted. H2: Achieving set sales target is a major rationale for the 'use of CRM'
This hypothesis seeks to find out if achieving a set sales target is a major reason for the use of Cause-Related Marketing. Chi-square test was run using responses from -Cause Marketing is good for achieving set sales target, I will stick to a brand that supports a cause only if the brand is of good quality against the question publicity of a brand that supports a cause is not necessary. See the result below
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Table 2: Hypothesis test Customer Retention Publicity
The result of the variables tested is significant. Therefore, the hypothesis Achieving set sales target is a major rationale for the ‘use of CRM’ is accepted. H3: The desire to achieve brand equity is a major rationale for the 'use of CRM' This hypothesis seeks to find out if achieving brand equity is a major reason for the use Cause-Related Marketing. Chi-square was run using responses from Cause Marketing is good for achieving brand equity, I will stick to a brand that supports a cause I am emotionally connected to against responses for publicity of a brand that supports a cause is neither important nor necessary. See the result below Table 3: Hypothesis test Customer Retention Publicity
Df P(α=0.025) Comment Df P(α=0.025) Comment CRM for Brand Equity
9 0.269 Significant 9 0.050 Significant
The result of the variables tested is significant. Therefore, the hypothesis Brand equity is a major rationale for the ‘use of CRM’ is accepted. H4: The desire to reinforce a brand’s positioning is a major rationale for the 'use of
CRM'
This hypothesis seeks to find out if achieving a brand’s positioning is a major reason for the use Cause-Related Marketing. Chi-square was run using responses from Cause Marketing is good for reinforcing a brand’s positioning, I will stick to a brand that
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supports a cause against responses from publicity of a brand that supports a cause is very important. See the result below Table 4: Hypothesis test Customer Retention Publicity
Df P(α=0.025) Comment Df P(α=0.025) Comment CRM for Brand Positioning
12 0.092 Significant 12 0.604 Significant
The result of the variables tested is significant. Therefore, the hypothesis Reinforcing a brand’s Positioning is a major rationale for the ‘use of CRM’ is accepted. H5: Corporate Transformation is a major rationale for the ‘use of CRM’: A new
contribution to literature by author
This hypothesis, which is a new contribution to literature, seeks to find out if Corporate Transformation is a major reason for the use of Cause-Related Marketing. Chi-square was run using responses from Cause Marketing is good for Corporate Transformation, I will stick to a brand that supports a cause against responses from publicity of a brand that supports a good cause is very important. See result below Table 5: Hypothesis test Customer Retention Publicity
The result of the variables tested is significant. Therefore, the hypothesis Corporate Transformation is a major rationale for the ‘use of CRM’ is accepted.
-
H6: The use of CRM contributes significantly to customer retention at a time publicity is used to make a brand visible
This hypothesis seeks to find out if the use of Cause Marketing significantly contributes to customer retention at a time when publicity is used for brand awareness of visibility. Chi-square was run using responses from Cause Marketing is good for brand image, Cause Marketing is good for achieving set sales target, Cause Marketing is good for achieving brand equity, Cause Marketing is good for reinforcing a brand’s positioning, Cause Marketing is good for Corporate Transformation against responses from Publicity of a brand that supports a cause is very important and I will stick to a brand that supports a cause. See the results below Table 6: Hypothesis test Customer Retention Publicity
Df P(α=0.025) Comment Df P(α=0.025) Comment CRM for Brand Image
12 0.000 Significant 12 0.006 Significant
CRM Sales Target
12 0.000 Significant 12 0.030 Significant
CRM for Brand Equity
9 0.002 Significant 9 0.012 Significant
CRM for Brand Positioning
12 0.092 Significant 12 0.604 Significant
CRM Corporate Transformation
12 0.005 Significant 12 0.050 Significant
The result of the variables tested is significant. Therefore, the hypothesis is accepted.
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Cause Related Marketing contributes significantly to customer retention at a time publicity is used to make a brand visible.
H7: The use of CRM contributes significantly to customer retention
This hypothesis seeks to find out if the use of Cause Marketing significantly contributes to customer retention. Chi-square was run using responses from Cause Marketing is good for brand image, Cause Marketing is good for achieving set sales target, Cause Marketing is good for achieving brand equity, Cause Marketing is good for reinforcing a brand’s positioning, Cause Marketing is good for Corporate Transformation against responses from I will stick to a brand that supports a cause. See the results below
Table 7: Hypothesis test Customer Retention
Df P(α=0.025) Comment CRM for Brand Image
12 0.000 Significant
CRM Sales Target
12 0.000 Significant
CRM for Brand Equity
9 0.002 Significant
CRM for Brand Positioning
12 0.092 Significant
CRM Corporate Transformation
12 0.005 Significant
The result of the variables tested is significant. Therefore, the hypothesis Cause Marketing significantly influences customer retention is accepted.
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CHAPTER 5: CONCLUSION AND RECOMMENDATION
5.0 Introduction
The objective this research is to find out if building a good brand image is a major
rationale for the ‘use of CRM”, if achieving set sales target is a major rationale for the
'use of CRM’, if achieving brand equity is a major rationale for the 'use of CRM’, if
reinforcing a brand’s positioning is a major rationale the 'use of CRM’, if Corporate
Transformation which is a new addition to literature by the author is a major rationale for
the 'use of CRM’, how the use of Cause Marketing influences customer retention of a
highly publicized brand and if the use of CRM contributes significantly to customer
retention. After an extensive presentation of findings in the previous chapter, it is only
sacrosanct that this chapter analyzes the implications of these findings to theory and to
practice.
5.1 Findings
It was proposed that findings from this study will not only add to existing literature but
also assist Brand Managers, Business Category Managers, Marketing Communications
Practitioners and Marketing Directors in making informed decisions as regards the ‘use
of CRM’ for customer retention. In addition, this will be a valuable resource material for
non-profits seeking to pitch a partnership with for-profit organizations.
Findings from this study therefore is very relevant to Marketing Communications
Practitioners and Marketing Directors saddled with the responsibility of developing
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solutions to recruit and retain customers. It confirms findings from previous literature
which are CRM for building brand image, CRM for sales, CRM for brand equity, CRM
for brand positioning and contributes a new literature to knowledge which is CRM for
Corporate Transformation.
The answers sort out for the seven hypotheses generated were found and conclusions
drawn from the findings and results. From the results, all seven hypotheses were accepted
therefore adding to existing literature on Cause-Related Marketing.
5.2 Implications
This section seeks to specifically analyze the consequence of findings of this study to
theory and practice.
5.2.1 Implications to theory
The research question this study sort to answer is how the use of CRM influences
customer retention of a highly publicised brand. Based on findings from this research, it
is clear that Cause-Related marketing is a powerful tool for influencing consumer’s
decisions to stick to a brand. The influence of Cause Marketing on Customer retention is
high and the influence of Cause Marketing on a brand that enjoys publicity is positively
significant too. We therefore cannot over emphasize the power of Cause Marketing as an
effective strategic marketing tool. There are however customers who will stick to a brand
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with a cause that they are emotionally connected to and customers who will stick to a
brand that is of good quality and supports a cause at the same time.
5.2.2 Implications to Practitioners
Marketing and Marketing Communications practitioners are constantly saddled
with the responsibility of developing ideas that will not only recruit new customers
but retain as well. This study shows therefore that there are various uses of Cause
Marketing, thus if you seek to build image, hit sales target, reinforce a brand’s
positioning, achieve brand equity or bring about corporate transformation that Cause
Marketing can my used as a strategic tool to achieve customer loyalty or retention.
However, there are two things to put into consideration, ensure that the cause is one that
connects emotionally to target consumers and that the brand in question is of good
quality. In addition, for brands that require long-term solutions, CRM is a powerful tool.
Coordinators of Not-for-profit organisations are also constantly saddled with the
responsibility of raising funds for charity causes and faced with opportunities to pitch
their cause to corporate organisations without a truly mutually beneficial offer to the
organization or brand in question. It is therefore clear that Cause Marketing is a powerful
tool and is used to a large extent in developed countries, however based on findings in
this research, Cause Marketing is in its teething stage in Nigeria. Therefore Not-for-profit
organisations can use these findings for the mutual benefit of both their charity cause and
the goal of the brand at hand.
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5.3 Recommendations
Further research that can evolve from this dissertation is the effect of the conceptual
model of the relationship between CRM and Customer Retention on specific
industries. In addition, the model of the relationship between CRM and Customer
Retention could be studied and further developed.
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APPENDIX
INTERVIEW SCHEDULE
Opening
My name is Rita Omovbude, I’m conducting a research on ‘how the use of Cause
Marketing influences customer retention of a highly publicized brand’ and since you
interact constantly with clients of companies who require CSR interventions like Cause
Marketing, I’d like to know what clients you work for, your opinion about Cause
Marketing in Nigeria and its significance to customer retention. I hope to use the
information to understand CRM in Nigeria better. This interview will only take
15minutes.
1. What PR Company do you work for and what clients do you manage?
2. What do you consider to be Cause Marketing?
3. Can you tell me about a Cause Related Marketing Campaign or Activity you’ve
been involved in, experienced or observed?
4. Would you proffer ‘the use of CRM’ to you clients?
a) If yes or no why?
5. Is building a good brand image a major reason you would ‘use of CRM’? If yes
how, if no why?
6. Is achieving set sales target a major reason you would use CRM? If yes how, if no
why?
7. Is achieving brand equity a major reason you would 'use of CRM’? If yes how, if
no why?
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8. Is reinforcing a brand’s positioning a major reason you would 'use of CRM’? If
yes or no why is this so?
9. Is Corporate Transformation a major reason you would 'use of CRM’? If yes or
no please explain the reason.
10. Does the use of CRM contribute significantly to customer retention? If yes or no
please state why this is the case?
11. In what way does the use of CRM especially during company publicity activities,
contribute or influence customer retention?
Conclusion
12. Is there anything else you would like to add?
i) Summary of the points made
ii) Thank you for your time.
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A QUESTIONNAIRE SEEKING TO UNDERSTAND HOW THE USE OF CAUSE MARKETING INFLUENCES CUSTOMER RETENTION OF A HIGHLY
PUBLICISED BRAND.
Thank you for choosing to take part in this survey. This research is a partial fulfillment of academic work at the School of Media and Communication, Pan Atlantic University. The aim of this project is to find out if Cause marketing, which is a strategic marketing tool influences customer retention of a highly publicised brand.
Your sincere opinion will help various stakeholders in more effective communication, thereby affecting society positively.