An online monthly research publication by the Ivey Business School 

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Volume 15, Number 9
September 2009

Believe it!

More and more firms are aligning their brands with good causes. Allison Johnson’s research shows that these efforts can backfire if they’re not perceived as genuine.

Yoplait, the popular yogurt brand, has given millions of dollars to breast cancer through programs such as “Save Lids to Save Lives” and “Run for the Cure.” Recently it became known that its yogurt contained milk from cows injected with a growth hormone linked to cancer. After being accused of “pinkwashing”, Yoplait announced that it would no longer use the milk.

Cause-related marketing is on the upswing, a trend accelerated by the growing concern for the environment. This has clear benefits for everyone, says Ivey Professor Allison Johnson, but there are risks to firms that make a misstep along the way. Altruistic claims are judged more harshly than other brand claims, because they are seen to be for the greater good. “If consumers see a company’s claim as being opportunistic or not genuine in some way, it can result in a backlash.”

Johnson’s research focuses on inferences that consumers make about brands. Consumers believe in a brand when they see it as authentic. In one of her recent studies she looked at how consumers perceive claims of corporate social responsibility (CSR). The challenge for firms is to present their CSR initiatives in a way that is perceived by consumers as genuine.

The study, which was survey-based, distinguished between causes that had a “high fit” with a company’s competencies and those with a “low fit.” For example, a children’s toy company supporting literacy for children would be a high fit. On the other hand, a cleaning product that donates money toward the cause of breast cancer would be a low fit.

Johnson found that the rewards for a firm are greater when its CSR initiative is closely linked to what the firm actually does. But that comes with a caveat. “When everything goes well and the outcomes are positive, high fit is better than low fit,” says Johnson. “But when things do not go well, high fit is worse than low fit.”

It’s important for managers to think about “fit” if they are concerned with potential outcomes or following through with an initiative. “High fit can be a good bet, because consumers tend to assume that you accomplished what you said you would,” says Johnson. “But even genuinely altruistic initiatives can be very damaging if you are caught in a negative outcome, where things don’t turn out as you’d planned.”

In a related study, Johnson and Ivey Professor Matthew Thomson looked at how consumers perceive authenticity in a brand. They investigated how consumers can believe in the brand’s story, looking past the fundamentally commercial nature and motivation of a branded product offering. “This is especially interesting for companies that use a CSR positioning strategy and present a brand story of altruism and charity, such as The Body Shop,” says Johnson. “However, authenticity is relevant to all brand stories, even those that one might see as, not immoral, but amoral.” Walmart, for example, can be seen as authentic because it does what it says it does – sells products for a low price.

In her study Johnson and her colleagues identified five influences that predict authenticity for brands. The first two conditions are framed in the negative: a company cannot be perceived as dishonest, nor can it be perceived as a copycat.

It’s also important that a brand reflect a positive value if it’s to be perceived as authentic. It can be a moral value, such as American Apparel’s pledge not to use sweatshop labour, or economic, such as Walmart’s commitment to low prices. It could also reflect a lifestyle value, such as the anti-establishment leanings of snowboarding brands.

Another predictor of authenticity is tradition. “Coke was not the original brand of Cola, but it’s often thought of in that way because it evokes a sense of nostalgia,” says Johnson. “A company doesn’t have to be old to reflect tradition, but it should display some respect for what has gone before in the industry.” It’s also important that the brand have a cultural context. Volkswagen, for example, is an icon because of the Beetle and the VW van, and their link with the culture of the 60s.

Johnson’s two studies carry a clear message for brand managers. A firm must be seen as honest, and do what it says it will do. “If your motivation is genuine, consumers will perceive it that way, and that will create authenticity,” says Johnson. “When you have brand authenticity, consumers set aside the commercial nature of the brand and believe in the brand’s story as a narrative, suspending disbelief and becoming transported by the authentic brand meaning.”

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