Persuasive Advertising - J. Scott Armstrong [100]
Coupons can also build on the endowment theory. In two experiments, 136 subjects were asked to make choices among restaurants given that they had received coupons for some of the restaurants. They tended to overvalue those restaurants for which they had coupons (Sen and Johnson 1997).
In a small-scale field experiment, of those customers randomly selected to receive a free chocolate sample when visiting a candy store, 84 percent purchased candy of some type. The corresponding purchase rate for those who received no candy was 59 percent (Lammers 1991).
5.13. Causes
Causes might help an advertiser to establish a link with customers who might otherwise resist their appeals. Causes can be of a general nature, such as donations to charities, or they can show how the product purchases contribute to the social good. Cause-related marketing has been growing rapidly.
5.13.1. Support popular causes
Some customers will go out of their way to buy from firms that support worthwhile causes. Hence, a company could both increase profits and be a source of pride to its employees—not to mention helping the cause.
When true, ads could inform people that the firm supports popular causes, such as, “This ad was printed on recycled bio-degradable paper.” In 2005, Honda advertised that: “Every car company is concerned about the people inside its cars. But what about the people outside?” The ad showed how the Honda design protects pedestrians.
To show their support for causes, phrases such as “Fair trade certified,” “Fairly traded,” “Certifiable sustainable,” and “Local” are used by sellers. Sometimes these terms are supported by a third party, such as “Rainforest Alliance Certified.” The causes appeal to customers even when they do not understand the benefits. For example, at one time, “cage-free eggs” sold for three times the price of regular eggs. They taste the same as regular eggs, and some reports claim that raising cage-free chickens is no more humane because they are twice as likely to die either from disease or by pecking each other to death (McLaughlin, 2005).
What might appear to be a good cause to one set of customers might be irrelevant, or even negative, to another. For example, few firms would want to support groups that either favor or oppose abortion rights, because either position would offend many people.
Do not violate popular causes. For example, avoid advertising that creates litter, and encourage people to properly dispose of used flyers.
Judging from anecdotes, cause-related advertising is effective. For example, Whole Foods in Boston was able to charge high prices for coffee with labels saying, “purchased in accordance with fair-trade standards,” and Sainsbury’s, the British supermarket, sold “fair-trade bananas” at four times the price of conventional bananas (McLaughlin, 2004).
Evidence on the effects of cause-related advertising
Results from five studies showed that ecological appeals increase consumer willingness to pay for various types of foods. In addition, 285 apple buyers were asked about their willingness to pay for eco-labeled apples. On average, respondents were willing to pay an additional 5 percent (Loureiro, McCluskey, and Mittelhammer 2002).
Surveys found that 83 percent of U.S. respondents would have a more positive image of a company if it supported a cause that they respect, and that