Cause-Related Marketing of Products with a Negative Externality

Gilles Grolleau (), Lisette Ibanez and Nathalie Lavoie

Working Papers from LAMETA, Universtiy of Montpellier

Abstract: Firms increasingly develop partnerships with non-profit organizations (NPO) to support a cause and improve their corporate image. This type of Corporate Social Responsibility, called Cause-Related Marketing, commits firms to fund associations that encourage environmental protection, international development, and other causes by donating part of their profits. In this article, we argue that when cause-related marketing is applied to products with a negative externality, these a priori win-win arrangements can generate adverse and unexpected effects. We consider a vertical differentiation model integrating two assumptions. First, consumers may perceive the firm's contribution to be higher than the actual donation. Second, consumers who value highly socially responsible behavior may prefer not to consume rather than consuming products that aren’t socially responsible. In this set-up we identify several possible counter-productive effects such as the likelihood of increase of the externality and the crowding out of direct contributions. We also draw policy and managerial implications.

Pages: 51 pages
Date: 2016-03
New Economics Papers: this item is included in nep-env and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.lameta.univ-montp1.fr/Documents/DR2016-02.pdf Revised version, 2016 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.lameta.univ-montp1.fr:80 (No such host is known. )

Related works:
Journal Article: Cause-related marketing of products with a negative externality (2016)
Working Paper: Cause-related marketing of products with a negative externality (2016)
Working Paper: Cause-related marketing of products with a negative externality (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lam:wpaper:02-16

Access Statistics for this paper

More papers in Working Papers from LAMETA, Universtiy of Montpellier Contact information at EDIRC.
Bibliographic data for series maintained by Patricia Modat ( this e-mail address is bad, please contact ).