Too Good to be Nice: The interplay between the Cause marketing and information acquisition

Abstract

Cause marketing (CM) has become an important tool for firms to fulfill their social responsibility strategies. However, in reality, although some consumers have responded positively to the firm’s CM strategies, others have doubts due to their lack of trust in the effectiveness of the firm or business. Therefore, in this paper, we consider a case that the supplier is a dual-purpose corporation that engage in a CM campaign and the consumer social preference is uncertainty and is unknown initially but can be resolved by the retailer’s acquisition behaviour. By examining the two information acquisition strategies: committed acquisition and contingent acquisition. We find that, under either strategy, the retailer would like to acquire information only when the cost of information acquisition is small. Moreover, compared to contingent acquisition, the retailer is more willing to prefer committed acquisition. Additionally, we show that the supplier always prefers the committed acquisition strategy. However, the retailer’s preference toward these two information acquisition strategies is related to the acquire cost. Specifically, when acquisition cost is small or large, the retailer is indifferent between these two strategies, when acquisition cost is in an intermediate range, the retailer will shift her strategy from the contingent strategy to the committed strategy. We also use numerical studies to illustrate main results. These findings provide theoretical support and management insights for managers to integrate CM into business transactions.