Journal of Retailing 86 (4, 2010) 295–309 Cause-Relating Marketing: The Effects of Purchase Quantity and Firm Donation Amount on Consumer Inferences and Participation Intentions Judith Anne Garretson Folse a,∗ , Ronald W. Niedrich b,1 , Stacy Landreth Grau c,2 a V. Price LeBlanc Professor, E.J. Ourso College of Business, Louisiana State University, 3119C Patrick Taylor Hall, Baton Rouge, LA 70803, United States b Kearny-Jolly E.J. Ourso College of Business Administration Endowed Professor, E.J. Ourso College of Business, Louisiana State University, 3124C Patrick Taylor Hall, Baton Rouge, LA 70803, United States c Department of Marketing, M.J. Neeley School of Business, Texas Christian University, Fort Worth, TX 76129, United States Received 19 August 2008; received in revised form 1 February 2010; accepted 4 February 2010 Abstract A conceptual model for a cause-related marketing (CRM) campaign, which examines the effects of purchase quantity and firm donation amount on consumer perceptions of the firm (i.e., firm motive and corporate social responsibility) and participation intentions, is developed and tested in three separate studies. In Study 1, we find the positive effect of firm donation amount on participation intentions was fully mediated by consumer inferences about the firm and the negative effect of purchase quantity on participation intentions was only partially mediated by these inferences. In Study 2, and consistent with the persuasion knowledge model, we demonstrate that the effects of purchase quantity on firm inferences and subsequent participation intentions are moderated by consumer participation effort where higher participation requirements (e.g., mail-in proof-of-purchase) yield more negative purchase quantity effects. We extend the model in Study 3 to incorporate multiple exchange mechanisms and find that although purchase quantity does affect participation intentions by social exchange, the effects of purchase quantity are primarily the result of the economic exchange. Recommendations for the design of cause-related marketing campaigns and for future research are discussed. © 2010 New York University. Published by Elsevier Inc. All rights reserved. Keywords: Cause-related marketing; Social responsibility; Persuasion knowledge model; Perceived manipulative intent; Inferences; Firm motive; Attitudes; Participation intentions Manufacturers and retailers, including Proctor and Gam- ble, Home Depot, Kay Jewelers, and Ann Taylor, have long been involved with cause-related marketing (CRM) campaigns, making specified donations to non-profit partners each time con- sumers perform a prescribed behavior, such as purchasing the company’s products. For example, Kay Jewelers donates $4 to St. Jude Children’s Research Hospital for each limited-edition teddy bear purchased as part of its annual CRM partnership with the hospital. Such support is expected to continue, as 100% of Fortune 500 manufacturers and retailers indicated they will remain committed to their involvement in CRM, which is ∗ Corresponding author. Tel.: +1 225 578 6539; fax: +1 225 578 8616. E-mail addresses: folse@lsu.edu (J.A.G. Folse), niedrich@lsu.edu (R.W. Niedrich), s.grau@tcu.edu (S.L. Grau). 1 Tel.: +1 225 578 9068; fax: +1 225 578 8616. 2 Tel.: +1 817 257 5251; fax: +1 817 257 7322. expected to represent a $1.60 billion business in 2009 (Hall 2009; PowerPact 2004). While consumers generally infer that altruistic motives prompt firms to engage in CRM, there is the potential for campaign elements to promote skepticism among consumers (Barone, Norman and Miyazaki 2007). Such skepticism is beginning to surface in the marketplace where consumers are receiving warnings about the structure of campaigns (Frazier, 2007; Olsen, Pracejus and Brown 2003; Pracejus, Olsen and Brown 2004). For example, “Pink” campaigns are designed by firms to benefit non-profits promoting breast cancer aware- ness and research, and the “Think Before You Pink” initiative promoted by the Breast Cancer Action advocacy group urges consumers to investigate any “Pink” CRM campaign sponsored during October’s Breast Cancer Awareness Month. The group encourages consumers to ask “critical questions” about the cam- paign tactics, including whether the purchase requirements (i.e., purchase quantity or other conditions) and donation are reason- 0022-4359/$ – see front matter © 2010 New York University. Published by Elsevier Inc. All rights reserved. doi:10.1016/j.jretai.2010.02.005