Understanding the effects of negative celebrity endorser publicity on cause-related marketing
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Corporations worldwide have embraced socially responsible business practices due to their well-documented benefits, both for organizations and their stakeholders. In doing so, cause-related marketing (CRM) has emerged as one of the most popular means of demonstrating corporate social responsibility. It has therefore become necessary for organizations to adopt strategies, such as using celebrity endorsers, to distinguish themselves in the market and promote their products more effectively. However, according to the literature, the use of celebrity endorsers poses many risks to organizations due to the consequences of negative publicity. This dissertation opens up a novel area of inquiry by examining the extent of this threat on consumer attitudes and purchase intentions within the CRM context. It also investigates the moderating effect of organization-public relationships (OPR) on these reactions. The following theoretical frameworks form the basis of this study: relationship management theory, the meaning transfer model, elaboration likelihood model, and schema theory. The hypothesized relationships were tested using a 2 (Endorser-Product-Cause Fit) × 2 (Cause Involvement) × 2 (Scandal Type) pretest-posttest factorial design. The study was conducted through self-administered online surveys with a sample of 500 Millennials recruited from a large Southeastern university. The results indicated that negative celebrity endorser publicity elicits unfavorable consumer attitudes toward endorsers, CRM products, and sponsoring organizations. It also lowers purchase intentions. Also, endorser attitudes have both direct and indirect predictive effects on purchase intentions through product and organizational attitudes. Moreover, the results suggest that product and organizational attitudes override the influence of fit on consumer attitudes. Cause involvement was also found to be a less powerful predictor of consumer reactions in this context. Finally, it was revealed that positive OPRs mitigate the effects of CRM endorser misdeeds on consumer reactions. This dissertation demonstrates the value of public relations for organizations. It also holds insights for corporations engaged in (or considering) celebrity-endorsed CRM initiatives. Moreover, it builds on the body of knowledge on relationship and crisis management, celebrity endorsement, and CSR. Finally, among other things, it opens avenues for further inquiry into the functions of fit, cause involvement, and consumer attitudes in forming reactions to celebrity-endorsed CRM initiatives.