The Effectiveness of Donation Promises in Charity Auctions As a Cause-Related Marketing Strategy

A donation promise is the amount to be donated by sellers as part of cause-related marketing transactions. We study the relationship between donation promise and charity auction revenue. Using charity auctions we determine consumers’ willingness to pay for different donation promises. Results of two controlled field experiments indicate that higher donation promises lead to increased selling prices, but at a diminishing rate. Furthermore, relative donation promises influence bidders’ perceptions and selling prices by serving as comparison frames and contrast to target donation promises. We observe significant overpayments for low donation promises, suggesting that sellers can profit from charitable associations.

Citation:

Leo Wong and Peter Popkowski Leszczyc (2011) ,"The Effectiveness of Donation Promises in Charity Auctions As a Cause-Related Marketing Strategy", in AP - Asia-Pacific Advances in Consumer Research Volume 9, eds. Zhihong Yi, Jing Jian Xiao, and June Cotte and Linda Price, Duluth, MN : Association for Consumer Research, Pages: 296-297.