Good cause, not so good business? Sales and operations performance of cause-related marketing

Abstract

Building on prior literature on sales and operations planning, corporate social responsibility, and marketing campaigns, we investigate cause-related marketing (C-RM) effects on sales and operations performance across the retail supply chain. C-RM is a corporate social responsibility marketing campaign, in which a for-profit firm donates proceeds from consumer purchases of a promoted product to a designated nonprofit cause. Using a unique, rich, and proprietary dataset from an actual CR-M campaign, we conduct a quasi-experiment analysis. Our findings suggest positive C-RM effects on retail store sales during the campaign, coupled with enduring negative effects on forecast bias and service levels upstream in the retail supply chain. Although academic studies and the specialized media have thoroughly documented the benefits of C-RM to corporate branding, our findings point to trade-offs in sales and operations performance across the retail supply chain. These findings call for firms to carry out holistic assessments of the strategic value of C-RM involving all of its stakeholders, including sales and operations planners and the nonprofit cause, as well as investments in the development and improvement of their forecasting management competence.