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Neural Correlates of Consumer behavior:
Bad News Management Effect Of Cause-related Marketing
Anna Jo1
, Jiyoung Ryu1
, Jaesung Jeong1
1
Korea Advanced Institute of Science and Technology (KAIST), Daejeon, South Korea
AbstractAbstract
• Six pictures of logos of familiar multinational corporations in
South Korea and product-related/social CM and product-
related/CM-related/unrelated bad news were chosen for visual
presentation(McDonald's, Adidas, Levi’s, Toyota, PepsiCo,
Samsung).
• The experiment used 5-point scale to assess corporate
reputation and purchase intention, and a button box rested in
the participant’s right hand. 20 healthy, right-handed subjects
recruited from local communities.[M:F(13:7); mean age 25.7,
range 22-30 years, SD:2.13] for behavioral study, then seven
subjects participated in fMRI study[M:F(4:3); mean age 25.9,
range 22-30, SD:3,2]
• The subjects were responded the questions for six companies
three times, respectively: before CM news headlines, after CM
news headlines, and after negative corporate events. The
control group were asked to evaluate the companies vice versa:
before negative untold events, after negative untold events, and
after CM news headlines.
• Behavioral analysis using eye-tracking machine confirmed to
observe of time on task as a measure of fMRI(1.5T Philips)
study.
• Cause-related marketing(CM) is the process of implementing
marketing activities to contribute a specified amount to a
designated cause based on a corporate social responsibility.
• Recent studies have investigated the BOLD signal in ventral
medial prefrontal cortex(VMPFC) and empathy-related insula
activation correlated with the subjective value of voluntary
donations.
• Little is known about (1) why CM effectively attracts people to
get good reputation and to promote purchase intention and (2)
whether CM thwarts negative publicity in response to obvious
business mismanagement(e.g. product-related/social mishaps).
• In the present study, we empirically assessed the effects of
CM on consumers’ attitude toward the 6 companies and
demonstrated heightened activity in reward-related brain area.
• To identify brain regions specifically involved in the CM effect
versus business mismanagement, and vice versa, contrasts
were computed. The BOLD activity in anterior insula and
anterior cingulate cortices was shown to increase.(x=8, y=40,
z=-2, p < 0.001)
• The evoked activity in OFC reflecting motivation counteracting
empathy was associated with letting altruistically punish moral
hazard corporations.(x=-20, y=52, z=6, p < 0.001)
• Proactive CM alleviates overall consumers' disappointment in
reaction to corporate disasters by decreasing insular activity with
whether emotionally aversive or not.
• Anterior Cingulate Cortices are sensitive to the magnitude of
loss/gain associated with the type of CM and Corporate
misfortunes.
• Further study should eliminate individual difference effectively
and investigate the classification between corporate reputation
and consumers’ purchase intention underlying neural
mechanisms of social reward.
Brain Dynamics Laboratory
MethodsMethods
ResultsResults
ConclusionsConclusions
Fig 1. Task time line for session I for fMRI study
Fig 2. The averaged difference of corporate reputation(Q1) and
purchase intention(Q2) between proactive CM(Group A) and
reactive CM(Group B) from consumers’ perspective
Fig 3. Brain responses for proactive CM : Reading CM news
headlines – Reading negative corporate event. (a) conflict
monitoring (b) altruistic punishment
MethodsMethods
Fig 1. Task time line describing CM context, and bad News for session 1
ResultsResults
• Subjects’ ratings of corporate reputation and purchase
intention were examined using categorized CM head lines and
bad news. Judgments were not highly sensitive to the
companies.
• The directions of bad news management effect of CM on
consumers were consistent with strategic corporate
philanthropy classification on consumer perception of brand
equity variable as identified by the 2x2 schema: two categories
of philanthropic activity(directed vs. general) and strategic
implementation(reactive vs. proactive).