Cause related marketing in the German retail sector: Exploring the role of consumers’ trust

Abstract

Cause related marketing (CrM) has become one of the most dynamic marketing tools. CrM allows companies to signal their overall business culture regarding Corporate Social Responsibility (CSR) at the point of sale. More recently retail chains in Germany have started to use CrM as a strategy to differentiate themselves and their products and to secure customer loyalty in highly competitive markets. For consumers the information necessary to assess the fairness of the terms of a CrM campaign is in general not available. Thus, trust becomes an important issue. The aim of our study is to understand the role of trust for the success of a CrM campaign. We consider consumers’ trust in a retailer’s CrM campaign for the success of a specific campaign as well as the role of consumers’ general trust in CrM and thus of potential spillover effects. The empirical study is based on a standardised online consumer survey carried out in Germany. Our hypotheses are tested using structural equation modelling (SEM). The results reveal that consumers’ trust in a retailer’s CrM campaign increases consumer’s loyalty in the retailer. We, in addition, show that general trust in CrM campaigns, a factor external to the influence of the retailer, has a significant influence on trust in a specific campaign. Based on our results we derive market and policy recommendations.