Businesses the help of traditional marketing tools like telephone,

Businesses
are increasingly realizing their social responsibility in addition to their
fulfillment of profit generating goals. Viewing the rising concern of society
towards social issues and declining sources of funds of NPOs, corporates have
collaborated with NPOs to initiate CRM activities for the mutual benefits of
organizations and society. It is, therefore, vital to know the factors that
contribute towards effective implementation of CRM and its impacts on purchase
intention of consumers.

 

1.1. Transition from Traditional Marketing
tools to Innovative Ones

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In
today’s competitive business environment, merely providing products and
services is not sufficient to build a brand identity. A company needs to be
innovative with its products to attract new customers and retain existing
customers. Apart from superior products and services, companies also need to
look into the marketing tools used. An innovation in the marketing tools should
also be done to improve the customer relationships. Traditional marketing
included strategies that were used earlier to attract and retain customers with
the help of traditional marketing tools like telephone, newspapers, magazines,
radio and TV broadcast. But the marketing tactics and strategies have changed
(Stanislaw, 2014). Also, the media has emerged in a new form. Businesses have
emerged with innovative marketing tools in the recent years. Digital marketing
and web marketing are so much in buzz these days. Majority of the businesses
use innovative marketing tools to attract customers (McKinsey & company,
2014). But not all new marketing techniques are effective for all types of
businesses. Traditional business owners still use traditional marketing tools
to advertise their products. 

In
the past, almost all individuals used to read newspapers and magazines in their
daily lives, but now a large number of people prefer online news and social
media to gain information about products. In this world of changing technology,
business owners are shifting from traditional to innovative tools of marketing
as innovative marketing opens up many opportunities (Forbes, 2013).

1.2. Rising concern of consumers for Social
Issues

Webb
et al. (1998) discussed that businesses use social causes for advertisements to
attract customers and enhance their businesses. The increasing concern of
consumers towards social issues has led to their inclination towards products
and businesses that support social causes. Consumers consider themselves to be
accountable for social and environmental issues. Consumers also expect
businesses to contribute towards the social causes. Apart from making profit,
consumers believe the companies to act responsibly towards social issues.

Consumers demand for responsible products and support because related
marketing. They believe that their purchase should make a positive and significant
impact to reduce social issues. They also have an understanding about how their
buying behavior can impact the social environment and are optimistic about
their purchase that is related to the social cause. Consumers have started
believing that can also play an important role in resolving social issues and
are willing to even reduce their consumption to contribute more to the social
issues. Moreover, consumers are also willing to buy unbranded products that are
supporting social causes. They seek to directly involve with the companies’
efforts to contribute to the social issues by spending on a product that is
associated with a cause (Sustainable brands, 2015). Consumers are willing to
donate and volunteer for the social causes and would voice their opinions to
the company about Corporate Social Responsibility (CSR) activities. Although
many companies still use traditional form of marketing the aim of attracting
customers and is well associated to the product itself (Mishra et al., 2013).

 

1.3. Importance of Cause Related Marketing

Consumers,
companies and not-for-profit organizations are showing interest in the CRM
activities due to the growth of CRM over past three decades. Adkins (1999)
defined CRM as “activity by which
businesses and charities or causes form a partnership with each other to market
an image, product or service for mutual benefit”. CRM is tying the
sales with contributions that belong to nonprofit organizations (Dean 2004;
Varadarajan and Menon 1988).

Declining
sources of funds by non-profit organizations is one of the reasons why it is
important for companies to initiate CRM activities. Non-profit organizations
primarily work for social causes and rely on donations to fulfill their
responsibilities. Competition and non-availability of funds have hindered the
activities of NPOs. Individual funds have declined and availability of funds
has decreased. It has become necessary for NPOs to join hands with corporates
to increase the availability of funds. It is important for NPO to adopt market
based revenue generating approaches to operate efficiently and meet service
demands (Eikenberry, 2013). Sponsorships
from corporations promote the potential gains for both NPOs and companies. The
lack of donation to NPOs and changing marketing tools has led corporations and
NPOs to form a strategic alliance so that both organizations benefit (Grau
& Folse, 2007). Alliance between NPOs and companies help NPOs to gain
donations and companies to popularize the business and develop a brand image.

Also,
people believe themselves to be accountable to address social issues and they
completely support companies that are involved in resolving and reducing social
issues. Therefore, they also expect companies to fulfill their social
obligations and contribute towards social causes for which consumers are even
willing to sacrifice their luxuries. Many companies have initiated CSR
activities to fulfill their responsibilities and build an image in the eyes of
consumers. CSR activities pursued by the companies help to build company image
and confidence among consumers (Weber, 2008). Consumers develop positive image
of a business when it supports a social cause (Nan & Heo, 2007).

Corporations, in recent
times, have collaborated with non-profit organizations for worthy causes for
mutual benefits. Corporations do these campaigns with a profit motive while
such contributions also benefit non-profit organizations. Competition for
public funds has increased while their availability has decreased which has
made non-profit organizations rely on corporates for funds. CRM is a practice
by which non-profit organizations raise fund through corporations marketing the
cause. CRM has become necessary for the survival of non-profit organizations.

CRM also helps corporations to fulfill their social responsibility for which
they are pressurized often. Political participation among consumer groups is
possible with ethical consumption, which is a result of CRM. CRM encourages
consumer purchases and hence, trigger donations for the developmental causes
(Hawkins, 2012). Other benefits of CRM involve creating brand image, curbing
negative publicity, increasing sales as well as employee loyalty. Also, there
are risks involved in CRM activities such as financial risk, losses, and risk
of damage to the brand image of the corporation if the NPO doesn’t perform
well. The benefits of NPOs include increased donations and marketing resources,
developing brand awareness and increasing connections as the NPOs work is being
recognized. On the other hand, there is possibility of failure of CRM
initiatives which may result in tarnished reputation of NPO, reduced donors,
wastage of NPOs resources and shifting of focus of NPOs towards corporate
partnership and their success rather than NPOs own motives.

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