OVERESTIMATION OF DONATION AMOUNT IN CAUSE-RELATED MARKETING

Abstract

Research evidence suggests that people are generally inclined to overestimate the effectiveness of their contribution to the public good. In the context of cause related marketing (CRM) campaigns, cognitive bias resulting from the complexity of the judgmental task involved in interpreting the donation information can lead to overestimation of the donation amount. However, previous research in this area of CRM has mostly been focused on CRM campaigns where a firm ties in with a single cause. This study aims to extend research in this area to further explore the impact of CRM portfolio characteristics (framing and size) on cognitive bias in consumer judgment and decisions. The experiment investigates whether the degree of consumer overestimation of the CRM donation amount varies with an increase in the size of a cause portfolio, as well as the impact of portfolio evaluation framing on overall consumer overestimation of the donation. Results revealed no significant effect of portfolio size nor portfolio framing in overestimation. However, there were indications that some interactions with regards to overestimation may exist between small and large portfolio sizes under medium negative affect conditions.