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Open AccessArticle

Social Representations of “Rounding Up” as a Cause-Related Marketing Practice: A Study of Mexican Millennials

Graduate Department of Management and Marketing, UPAEP University, Puebla 72410, Mexico
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(13), 5278; https://doi.org/10.3390/su12135278
Received: 23 May 2020 / Revised: 15 June 2020 / Accepted: 23 June 2020 / Published: 30 June 2020

Abstract

Nowadays, companies are relying more and more on cause-related marketing (CRM) as an effective corporate social responsibility practice to achieve marketing objectives by consumers’ participation in donations. Specifically, the current study is focused on exploring millennials’ (born between 1980 and 2000) beliefs and understandings of a CRM practice that has received scant attention from marketing scholars despite its effectiveness in raising money: rounding up. For methodological purposes, a structural approach to the theory of social representations is adopted as it facilitates the analysis of interpretations and shared meanings held by a social group about a specific social phenomenon. Thus, drawing on this theoretical approach, the method of free-word associations was chosen and applied to 300 Mexican millennials. Findings indicate that millennials understand the purpose and nature of rounding up and, hence, they are willing to donate money through this practice. However, the mistrust of companies’ practices and intentions by millennials (e.g., tax evasion and misuse of money) affect the credibility of rounding up. Therefore, companies must implement practices to enhance awareness, transparency, and trust in their rounding-up practices.
Keywords: social representations; corporate social responsibility; cause-related marketing; millennials; rounding up; developing countries social representations; corporate social responsibility; cause-related marketing; millennials; rounding up; developing countries

1. Introduction

Cause-related marketing (CRM), referred to as a marketing strategy in which the company donates money to a cause or non-profit organization each time a consumer makes a purchase [1], has been widely adopted by companies as a form of corporate social responsibility practice [2]. Companies engage in CRM due to the benefits it generates, such as positive consumer responses ranging from purchase intentions [3] to evaluations [4] and attitudes towards the brand [5]. However, these responses may vary depending on the social and cultural elements of consumers [6].
Based on the aforementioned, a promising research line of CRM literature is focused on millennials and their responses to CRM practices [7]. Millennials represent an interesting generational cohort for marketers as they have substantial spending power [8]. Moreover, millennials have shown high civic awareness and socially responsible consciousness towards the contemporary economic, social, and environmental problems [9]. On the opposite side, millennials have also been regarded as a selfish and narcissistic generation compared to generation X and baby boomers [10].
Understanding millennials’ beliefs and motivations to CRM will enable companies to develop more effective strategies. Therefore, the current study focuses on this generational cohort and their understandings of a specific CRM practice that has surprisingly been overlooked by scholars despite its effectiveness in raising money: rounding up. This practice has proved to be more effective than other types of donations [11] and it has become a widespread practice for retailers [12]. Besides, the study is undertaken within the context of a developing country (Mexico), which in turn contributes to filling the research gap pointed out by Strizhakova and Coulter [13] on the prevalence of CRM studies based on developed countries’ contexts. Millennials’ beliefs and understandings of rounding up are addressed through the theoretical and methodological lenses of social representation. This approach is suitable to explore the shared meanings and interpretations of a social group about a specific social object or situation [14].
Besides its theoretical and methodological contributions, the study also seeks to provide managerial insights to decision-makers in service businesses to effectively develop and implement rounding-up campaigns. By doing so, companies can generate win-win relationships with non-profit organizations and consumers driven by ethical and social motivations [9]. In the particular context of developing countries, reinforcing the credibility and transparency of the company’s intentions in rounding-up practices may reduce the skepticism of consumers and so improve their willingness to donate money. On the other hand, non-profit organizations, which play an important role in tackling social problems in developing countries, may benefit too from the financial support generated by companies through rounding-up campaigns.
The article is organized as follows. First, a review of CRM literature on millennials and the rounding-up practice is explored. Then, social representation theory and the methodology applied to Mexican millennials are explained. The analysis of the results and discussion sections provide a complete picture of the social representations held by millennials on rounding up. The article concludes with theoretical and practical implications as well as recommendations for future research.

2. Literature Review

2.1. Millennials’ Responses to CRM Practices

As a result of multiple corporate scandals and the recent financial crisis, firms have been questioned and called to account by consumers regarding their role in the improvement of community well-being. Moreover, companies have been viewed as significant contributors to most of the contemporary environmental, social, and economic problems [15]. Hence, companies have adopted a more reactive role in addressing these problems through the deployment and implementation of corporate social responsibility (CSR) practices, and one way by which companies engage in these practices is with charity donation [16].
Chen and Huang [17] distinguish two types of CSR campaigns related to corporate donations: corporate philanthropy and cause-related marketing (CRM). While the former comprises the company’s donation of money or time to a worthy cause, the latter may be regarded as a marketing strategy in which the company donates money to a cause or non-profit organization each time a consumer makes a purchase [1]. Despite the relevance of both practices, the current study focuses on CRM since it has become a CSR practice widely adopted by companies [18].
For companies, CRM is a means to achieve marketing objectives through supporting social causes [19], since the source of corporate donations comes from sales instead of the corporate budget [20]. Lafferty [21] pinpointed the birth of CRM in 1983 when American Express launched a campaign aimed at supporting the Statue of Liberty restoration by donating a certain amount of money for every transaction made on the American Express card. The success of this campaign triggered the adoption of CRM by other companies in the following years. Indeed, it is estimated that annual corporate expenditure on CRM in 2017 exceeded $2.05 billion [19].
The great interest of firms in adopting CRM lies in its effectiveness in generating positive consumer attitudes and improving purchase intentions [5,22]. These effects may be explained by the capacity of CRM to provide consumers with the opportunity of expressing their moral and prosocial identities [20]. A growing body of academic research has focused on identifying and analyzing consumer responses to CRM strategies [3,23,24,25]. Yet, there are still potential research areas that need further investigation in order to gain more understanding of this particular topic of CRM. Especially, more research is needed regarding millennial consumers and their responses to CRM strategies [7].
Millennials, also referred to as generation Y, are a generational cohort of people born between 1980 and 2000 [10]. Millennials are distinguished from other generations by their constant engagement and commitment to social causes and ethical consumption [9]. However, millennials also have been labeled as a “selfish generation” without any loyalty to a specific cause or non-profit organization [26,27]. Therefore, this contrasting nature of millennials requires that companies gain more understanding of the motivations and responses of millennials to CRM strategies. Besides, the millennial generation represents a promising audience for CRM as they have a substantial buying power compared to other generations [8].
Research on millennials’ responses to CRM strategies has yielded interesting findings. Human and Terblanche [28] found that millennials have positive responses towards CRM strategies, although it depends on knowledge about the donation recipient. Gorczyca and Hartman [10] identified that high awareness of millennials towards CSR contributes to a more positive response to CRM strategies. Other findings have shed light on the relevance of the company’s reputation for millennials at the moment of supporting CRM practices [9] and the effectiveness of social media as a tool to draw millennials’ attention towards CRM practices [7].

2.2. Rounding Up as a CRM Practice through the Lens of Social Representation Theory

It is worth noting that most of the CRM studies have focused on millennials’ responses to CRM practices related to product donation (a donation of a portion of the product sales or a one-for-one donation of the product). However, there is a specific CRM practice that has surprisingly been overlooked by scholars despite its effectiveness in raising money: rounding up. Giebelhausen et al. [29] put rounding up under the umbrella term “checkout charity”. The authors define this term as a donation solicitation made by front-line employees to consumers during the payment process. Rounding up, as a form of checkout charity, has gained broad acceptance by companies that have adopted this practice successfully [30].
Through rounding up the total bill to the nearest dollar and donating the difference to charity, consumers may experience stronger prosocial behaviors compared to flat donation requests [12]. Nonetheless, there are mixed opinions regarding this controversial practice as consumers may experience feelings of guilt if they decide not to donate [31]. Therefore, the current study addresses the responses of millennials to the practice of rounding up through the theory of social representations. The adoption of this theory for the current study lies in its usefulness to gain deeper insights about common collectively shared knowledge of a particular social group regarding a social object or practice [32]. Despite individual differences, members of a social group hold similar social norms and values through which they interpret reality. Hence, social representation theory can be considered as an appropriate framework to explore how a CRM practice is perceived and understood by a social group and which elements are part of its representation.
The theory of social representation has been previously used by Urbain et al. [14] to comprehend the social representations of generation Y towards giving money to charity and non-profit organizations. This theoretical approach is suitable to explain the beliefs and mindsets of social groups such as generational cohorts. Parment [33] contends that individuals belonging to a particular generation share common values stemming from experiencing environmental events during their “coming of age” moment in life. In the case of millennials, they have been shaped by events such as the 2008 financial crisis, terrorism and climate change, which in turn have generated values such as multiculturalism and social consciousness.
In sum, the main objective of the study is to comprehend how millennials perceive and understand the CRM practice of rounding up. Social representation theory is used to gain insights about millennials’ beliefs and mindsets regarding donating money via this practice. In the next section, a thorough explanation of the theory of social representation, the context of the study and the steps to follow during the methodology process are provided.

3. Materials and Methods

Social representations are shared and socially constructed knowledge held by a social group about a social object or situation [34]. As a form of “common sense knowledge” [35,36], social representations enable a particular social group to have a common understanding of reality. Social representations are integrated by cognitive and social components [37]. From this perspective, social representations are based on beliefs, social norms, experiences (individual and collective), knowledge (scientific and naïve), and emotions related to a social object [38].
The current study draws on the central core theory derived from the structural approach of social representations [32,37,39]. The foundation of this theory lies in the organization of any social representation in a dual system integrated by a central core and a peripheral system. The main purpose of this system is “to maintain the stability of the representation within the group which conveys it” [40]. According to Abric [37], the central core dictates the significance and structure of the social representation. The central core is stable and non-negotiable, so that a change in this component may jeopardize the representation itself. On the other hand, the peripheral system occupies a major role in facilitating the functioning and dynamism of the representation by allowing the central core to adapt to the changing context. In contrast with the central core, the peripheral system is negotiable and may vary from individual to individual [41].
Therefore, the central core theory provides a useful framework to analyze the structure of the social representations held by millennials regarding the CRM practice of rounding up. The method selected to fulfill this purpose was free word association, which facilitates, in a more effective way than other methods, access to the constitutive elements of social representations [14]. This study was based on a convenience sample of 300 participants who were born between 1980 and 2000 and lived in the central region area of Mexico and who agreed to participate by answering the questionnaire. This sampling technique was chosen because of its frequent use in empirical research of social representations [14,42] and for its ease of contact with participants. As a developing economy, Mexico is an ideal context to expand the knowledge on CRM practices, since most of the research has been undertaken in developed economies such as the USA, Canada, Australia, and Europe [10,13,43].
The questionnaire using the free word association method (Appendix A) was elaborated in Spanish and began with a first question to the participant: Do you know what the giving practice of rounding up is? If the answer from the participant was positive, then he/she was asked to complete a free word association task. This task was divided into two sections. The first section was related to demographic questions. In the second section, an example explaining how to fill in the next questionnaire sections was provided. The third section consisted of asking the participants to write the first 5 words that came to their mind when thinking about rounding up and then to rank these words from the least important (1) to the most important (5). In the fourth section, participants were asked to evaluate the positive or negative attitudes each word elicited from them. The scale of evaluation ranges from −3 (totally negative) to +3 (totally positive).
The structures of the social representations (central core and peripheral system) were examined through prototypical analysis, which evaluates two specific criteria: frequency of the word and ranking order [44]. Based on these two dimensions, a 2 × 2 table with four quadrants was generated (see for example Rodrigues et al. [45]). According to Abric [39], the elements with high frequency and high importance are placed in the first quadrant, which represents the central core of the social representation. The elements with high frequency but low importance are positioned in the second quadrant (first periphery). The third quadrant encompasses the contrasting elements with low frequency but high importance. Finally, the fourth quadrant represents the second periphery, that is, the elements with low levels of frequency and importance.
Cut-off points for frequency and importance were established in order to generate the table with the four quadrants. The frequency cut-off point was obtained by dividing by half the most frequent category of words [45]. On the other hand, the importance cut-off point was obtained by identifying the median from the importance scale set in the study [46]. An attitudinal element for the interpretation of social representations was added as attitudes play a significant role in changing giving behaviors [47]. Hence, a polarity index (see Rodrigues et al. [45]) was adopted to measure the positive or negative valence of each word elicited by the participants regarding the social representation of rounding up.

4. Results

As a first step of the analysis, a process of lemmatization and triangulation was undertaken in order to obtain a set of elements from the inductor expression. In this case, a total of 10 elements were obtained from the expression rounding up (Table 1).
Then, cut-off points of the inductor expression (rounding up) were determined. For frequency, the cut-off point was 9.5 and for importance, the cut-off point was 3. Therefore, elements with a frequency higher than 9.5 were placed in the high-frequency category, while elements with a frequency below 9.5 were placed in the low-frequency category. Likewise, elements with an importance score above 3 were classified in the high-importance category, while elements with an importance score below 3 were classified in the low-importance category. Table 1 shows the frequencies of the identified elements. In Figure 1, the same elements are positioned in their respective quadrants according to their frequency and importance scores.
The top-left quadrant (central core) represents the elements with high frequency and high importance. For this quadrant, the elements donate and help were included. On the other hand, the top-right quadrant represents the elements with high frequency but low importance. This quadrant is known as the first periphery, which encompasses the secondary elements of the social representation. During the analysis, only one element was identified as belonging to the top-right quadrant: money. The bottom-left quadrant represents the elements with low frequency and high importance. Also referred to as the “contrasting zone”, this quadrant “… can reveal the existence of a subgroup carrier of a different representation” [45] p. 30. This quadrant consisted of five elements: charity, tax avoidance, misuse of money, steal and, Oxxo (Mexican convenience store). Finally, the bottom-right quadrant represents the second periphery, in which two elements with low frequency and low importance were identified: charitable foundations and supermarkets.
Regarding the polarity indexes (Table 2 and Figure 2), the results display an even distribution of elements assessed as positive and negative by participants. The elements perceived as positive by millennials were charity, help, charity foundations, donate, and money. On the other hand, the elements perceived as negative were Oxxo, supermarkets, tax avoidance, misuse of money, and steal. It is worth mentioning that most of the elements evaluated with positive attitudes by millennials were placed in the central core (top-left quadrant) and the first periphery (top-right quadrant). In contrast, most of the elements evaluated with negative elements were located in the contrasting area (bottom-left quadrant). In the case of the second periphery (bottom-right quadrant), charitable foundations had a positive valence, while supermarkets had a negative valence.

5. Discussion

The analysis of the structure and constitutive elements of the social representations held by Mexican millennials about the practice of rounding up yielded interesting findings. In order to steer the discussion towards an appropriate direction, it is arranged according to the four quadrants of the social representation determined in the central core theory: central core, first periphery, contrasting elements, and second periphery. Each quadrant plays a specific role in the formation and continuance of the social representation in the collective mind of a particular social group. Hence, the interpretation of the elements will vary depending on its position in one of the four quadrants.
The central core of the social representation of rounding up is formed by two elements: help and donate. These elements provide stability to this social representation and act as consensual elements or shared knowledge for Mexican millennials. Given that rounding up is represented as a type of donation aimed at helping a social cause, it can be assumed that millennials consider this practice as a prosocial appeal, which in turn leads to prosocial behaviors [48]. Based on the polarity index, the elements from the central core generate strong positive attitudes, which means that overall, there is a positive representation of rounding up among Mexican millennials.
This representation seems to be reinforced by the only significant element identified in the first periphery: money. Even though the polarity index yields a low positive score to this element (+0.16), it seems that money works more as a complement for the central core than a stand-alone component. Mexican millennials acknowledge that rounding up involves a monetary donation, which sets this practice apart from other types of donations, such as time (volunteering) and used goods [49]. The adequate comprehension of millennials about the purpose of rounding up differs from the common misconception that consumers refuse to round up because of their unfamiliarity with the practice (see Evans [50]).
While the central core and first periphery of the social representation of rounding up feature positive elements, the contrasting quadrant portrays a different type of representation. Indeed, most of the negative elements identified in the whole social representation belong to the contrasting quadrant. Contrasting elements are susceptible to change and are part of the central cores of subgroups [45]. In this case, particular subgroups of Mexican millennials associate steal, tax avoidance, and misuse of money with rounding up. These findings are aligned with Gorczyca et al.’s [10] observation about the relevance of transparency for millennials when deciding to donate via CRM programs.
Another contrasting element identified in the analysis is Oxxo, the most important chain of convenience stores in Mexico [51]. Indeed, Oxxo made popular the rounding-up practice after launching its program “Redondeo Oxxo” in 2002. Despite the relative success of the program, consumers have sharply criticized it due to reasons akin to the contrasting elements mentioned above. Hence, convenience stores must focus their efforts on generating awareness about the purpose of the donation and increasing transparency during the process in order to effectively apply the rounding-up practice. In the case of Tesco [50], most of the consumers’ complaints came from the lack of explanation of and permission to round up their bills.
The last quadrant (second periphery) contains elements that are modulated by the social context and are idiosyncratic by nature. According to Rodrigues et al. [45], the elements of the second periphery are not very important and, thus, can disappear easily from the social representation. Nonetheless, the authors find it worthwhile to integrate the elements from this quadrant into the discussion and comprehension of the social representation of rounding up. The elements supermarkets and charitable foundations were placed in the second periphery and denoted a kind of understanding for millennials about the main actors of the practice. Based on the polarity index, supermarkets elicited negative attitudes while charitable foundations elicited positive ones.
In sum, the social representation held by Mexican millennials about rounding up presents important lessons for service companies willing to adopt rounding up as a CRM program. First, rounding up seems to be widely regarded by millennials as a good practice to support a social cause. Hence, companies must understand that the reluctance of some consumers to not engage in this practice lies more in its application than in negative perceptions towards it. Second, awareness and transparency are key aspects that companies must embrace in order to effectively apply rounding up. These aspects can counteract the negative contrasting elements mentioned by millennials about rounding up. Third, rounding up is still perceived as a practice performed by supermarkets and convenience stores. However, other service companies such as restaurants and department stores can also adopt rounding up [12].

6. Conclusions

The present research explored the social representations held by Mexican millennials about the CRM practice of rounding up. Drawing on a structural approach to social representations, the free word association method was selected and then applied to 300 Mexican millennials (aged between 20 and 40 years old). The findings showed that millennials have a positive perception of rounding up and are aware of the nature and purpose of this practice. Yet, the application of rounding up by convenience stores and supermarkets has not been effective as consumers assume that companies take advantage of this practice for their own benefit (i.e., tax avoidance and embezzlement). Hence, policymakers, NGOs, and companies must work together to implement mechanisms able to increase awareness, transparency, and trust in the rounding-up practice. These actions can lead to better social representation and more support from millennials towards rounding up.
At a theoretical level, the study expands CRM literature by analyzing the rounding-up practice. Despite the broad adoption of rounding up by companies [30,52], scholars have lagged behind in understanding the benefits and limitations of effectively applying this CRM practice in diverse contexts and service sectors. Moreover, the study contributes to knowledge on millennials’ responses to CRM practices in developing countries since developed countries-based studies have widely dominated CRM research. Regarding practical implications, the findings yield useful insights for decision-makers in service companies. First, transparency must be a priority in the implementation of rounding-up practices. Managers must properly inform customers of the supported social cause and the intended amount of money to be gathered. Second, firms could opt to involve non-profit organizations in the design and implementation of rounding-up campaigns. This action may give more credibility to the company’s intentions and reinforce the trust between and commitment of both actors in the pursuit of solving social problems. Lastly, effective communication of the rounding-up campaign is crucial to its success. Hence, companies must train front-line employees to effectively inform consumers about the purpose and benefits of the rounding-up campaign.
The study is not exempt from limitations, which in turn can generate promising areas of research worth exploration. First, it would be interesting to compare the social representations of millennials with ones from generation Z. This generational cohort has remained unexplored by marketing scholars despite its future relevance for the comprehension of new consumption patterns and dynamics [53]. Second, more research is needed regarding the barriers front-line employees face when asking customers to round up. Unfortunately, there is a misconception among managers that customers do not like being asked to donate at the register, which in turn limits the effectiveness of rounding up [29]. Hence, studies focused on analyzing this point of interaction between front-line employees and consumers may shed more light on the dynamic nature of rounding up. Third, the findings obtained from the social representations of millennials can be reinforced by other quantitative methods to generalize the results. Rounding up must be brought to the forefront of discussions on CRM practices and the authors hope that the contributions of the study can help to achieve that purpose.

Author Contributions

F.R.C.-V. developed the idea, conceptualization, investigation, and writing (original draft, review, and editing); J.C.-A. contributed to the methodology part. Both authors performed the formal analysis of results. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Conflicts of Interest

The authors declare no conflict of interest.

Appendix A. Questionnaire

Good morning/afternoon, this questionnaire is intended to know your point of view on the practice of rounding up your bill in supermarkets.
  • Section I.
  • Age: _________ (Only answer the rest of the questionnaire if you were born between 1980 and 2000)
  • Sex: Female___ Male __
  • Place of residence: _________
  • Occupation:  Student   Professional   Household occupations Entrepreneur   Other
  • Section II.
  • Below is an example to correctly answer the following survey,
  • 1. Please write 5 words that come up to your mind when you hear the word “automobile”.
  • Sample response:
  • 1. Speed 2. Travel 3. Need 4. Comfort 5. Transfer
  • 2. Now, after writing the related words, evaluate them in order of importance, where 5 is the most important, 4 is less important, 3 is regular, 2 is unimportant, and 1 is not important at all.
  • Sample response:
  • 5. Transfer 4. Comfort 3. Need 2. Speed 1. Travel
  • 3. Then rate the words you mentioned according to what you consider to be positive or negative in relation to the word automobile, in a range where −3 is completely negative and +3 is completely positive.
    WordRating
    Speed+3
    Travel+2
    Need−1
    Comfort+1
    Transfer−2
  • Section III.
  • Please answer the following questions based on the example previously described. Remember to just mention words that from your point of view are related to the given word.
  • 1. Please write 5 words that come up to mind when you hear “rounding up”.
                        
  • 2. Evaluate the words that you already mentioned in order of importance, where 5 is the most important, 4 is less important, 3 is regular, 2 is unimportant, and 1 is not important at all.
    5.   4.   3.   2.   1.   
  • Section IV.
  • 1. Rate the words you mentioned according to what you consider to be positive or negative, in a range where -3 is completely negative and +3 is completely positive.
    WordRating

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Figure 1. The four representation zones of rounding up.
Figure 1. The four representation zones of rounding up.
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Figure 2. Polarity index of evoked elements.
Figure 2. Polarity index of evoked elements.
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Table 1. Categories and main words (the three more frequently evoked) in each category.
Table 1. Categories and main words (the three more frequently evoked) in each category.
Word CategoryMore Frequently Evoked Words in the CategoryFrequency
HelpHelp, Collaboration, Support16
DonateDonate, Contribute, Give14
MoneyMoney, Cents, Pesos19
CharityCharity, Altruism, Generosity7
Oxxo (Convenience store)Oxxo9
Tax avoidanceTax avoidance, Tax evasion, Tax-exempt9
Misuse of moneyMisuse of money, Embezzlement, Corruption4
StealSteal, Fraud, Abuse5
Charitable foundationsCharitable foundations, NGO, Association4
SupermarketsSupermarkets, Retail stores, Wal-Mart3
Table 2. Polarity index by quadrants.
Table 2. Polarity index by quadrants.
QuadrantsP
Core
Help0.93
Donate0.79
First periphery
Money0.16
Contrasting elements
Charity0.95
Oxxo (convenience store)−0.22
Tax avoidance−0.5
Misuse of money−0.63
Steal−0.92
Second periphery
Charity foundations0.83
Supermarkets−0.36
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