Mechanisms of power and action for cause‐related marketing

Abstract

PurposeThis study aims to examine why cause‐related marketing (CRM) can develop, and how can the social system and enterprise link with nonprofit organization (NPO) to form a closed path to prompt the maximization for three parties' benefits, in order to provide a general framework to explore the mechanisms of power and action for CRM.Design/methodology/approachThe logic deduction approach was used for an overview and conceptual paper based on research experience.FindingsThe paper stresses CRM should be a good marriage between a nonprofit and its sponsorship firm both organizations stand to benefit. Its mechanism of power is the result of the combined effect by the enterprise's push, NPO's pull and social system's supervision, and mechanism of action is under the social system's supervision, enterprise linked with NPO to form a closed path.Research limitations/implicationsA major weakness is that the influences of CRM on the enterprise and the NPO are only explained qualitatively, there are short of some data to test the validity of theories above. Further, investigation into this construct in the context of CRM would be helpful in understanding what are the role and the impact of CRM on firm and NPO in this domain. The main implication is that, this study presents an example and direction of how the enterprise, NPO, and social system are able to maximize their economic and social benefits.Originality/valueThis study contributes to examine the inter mechanisms of CRM from the perspectives of enterprise and NPO. The findings of this study are useful to and provide managerial implications for administrators of enterprise, NPO and social system aiming to make optimal decisions under the dual driven of institutional rationality and economic rationality.