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Making more of your Cause Related Marketing




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Making more of your

Cause Related Marketing

Developing a Strategic, Integrated Approach




Based on an extensive literature review of the concept of Cause Related Marketing (CRM) and preliminary research with a multinational company operating in Denmark, the need for a more strategic and consumer oriented approach to CRM was identified. This thesis examines how Danish companies can develop and utilise strategic and sustainable CRM to optimise both consumer and company benefits. The thesis takes a dual perspective and tries to answer the main research question by answering three sub-questions from both a consumer and a company perspective: What CRM is; how to engage in it; and why to do so.

Qualitative empirical data was collected according to the Means-End Chain theory in order to reveal consumers’ motivations for engaging in CRM. It was found that consumers engage themselves in CRM to obtain one or more of eight different values. The values are either internally oriented and related to the consumer’s own gain, identity and appearance or externally oriented and related to the cause, society and its norms. Further, a clear distinction can be made between CRM positive and CRM negative consumers.

It is suggested that companies should focus on the CRM positive consumers in their CRM efforts as negative consumers are opposed to the very core of CRM, the combination of charity and consumption. Further, it was found that consumers are very focused on corporate social responsibility (CSR) as a necessary fundament for CRM. CRM without CSR provided little value to the consumers, and companies are not recommended to pursue this approach.

Additionally, consumers also value the company’s honesty and integrity highly, and it can be determining for CRM success. Seen from a company perspective, CRM can provide several benefits, e.g. increased sales, stronger brand, motivation and attraction of employees, and enhanced corporate image and clout. Furthermore, this thesis proposes a strategic choice of CRM cause, so the success of the cause will contribute to the success of the company and thereby reinforce the benefits for both parties. Finally, the thesis operationalises the integrated and strategic approach to CRM, it suggests. Based on the framework of Smith and Colgate (2007), it is suggested that companies should support the consumer’s value creation in relation to CRM. This can be done trough e.g. information, the actual product, and the purchasing and consumption environment. The approach suggests that different types of consumer values require different types of support.

The thesis concludes that CRM can provide both companies and consumers with great benefits.

It is, however, crucial for companies to approach the concept in a holistic and integrated manner to achieve strategic, sustainable gains.






1. Introduction... 1

1.1. Defining Cause Related Marketing ... 3

1.2. Research Question... 4

1.3. Delimitations... 4

2. Knowledge of Science and Methodology ...6

2.1. Purpose of the Thesis ... 6

2.2. Reasoning Approach... 7

2.3. Research Design ... 8

2.3.1. The Documentary Method... 8

2.3.2. The Questioning Method ... 9

2.4. Structure of the Thesis... 10

3. Literature Review ...11

3.1. Consumers in CRM... 11

3.1.1. Characteristics and Involvement ... 11

3.1.2. Products and Donations... 12

3.1.3. Ethical Concerns... 12

3.1.4. The Cause ... 13

3.2. Companies in CRM... 14

3.2.1. Objectives ... 14

3.2.2. Strategic versus Tactical CRM ... 15

3.2.3. Developing a CRM Campaign... 15

3.2.4. The Right Cause... 16

3.3. Summing up ... 16

4. Theoretical Framework... 18

4.1. Means-End Chain Theory... 18

4.1.1. The Use of MEC Theory... 20

4.1.2. The Laddering Technique ... 20

4.1.3. Analyzing MEC Data ... 22

4.1.4. Critique of the MEC Theory... 23

4.2. Values in a Branding Context... 23

4.3. Summing up ... 25

5. Cause Related Marketing in a Consumer Perspective ... 26

5.1. Methodological Considerations... 26

5.1.1. Reliability and Validity... 28

5.2. Findings of the Interviews ... 30

5.3. Value Analysis ... 33

5.3.1. Externally Oriented Values ... 33

5.3.2. Internally Oriented Values... 36

5.4. Positive versus Negative Respondents... 39

5.4.1. Negative Group ... 40

5.4.2. Positive Group ... 41

5.4.3. Hierarchical Value Maps for the Groups... 42

5.5. Summing up ... 43


6. Cause Related Marketing in a Company Perspective ... 44

6.1. Targeting CRM ... 44

6.2. CRM in a CSR Context ... 45

6.3. Corporate Motivations for CSR Involvement... 47

6.3.1. Increased Sales and Market Share ... 47

6.3.2. Increased Ability to Attract, Motivate and Retain Employees... 48

6.3.3. Strengthened Brand Positioning... 48

6.3.4. Enhanced Corporate Image and Clout... 50

6.4. Strategic CSR and CRM ... 51

6.5. Succeeding with CRM... 52

6.5.1. Information... 53

6.5.2. Products ... 54

6.5.3. Interactions with Employees and Systems... 56

6.5.4. Purchasing and Consumption Environment... 56

6.5.5. Ownership/Possession Transfer... 57

6.6. Summing up ... 60

7. Discussion of Findings ... 61

7.1. An Integrated Approach to CRM... 61

7.2. The Integrated Approach compared to Existing Literature ... 62

7.3. An Expert’s Evaluation of the Findings ... 64

7.4. Pilgrim and Médecines Sans Frontières ... 67

7.5. Summing Up ... 70

8. Conclusion... 71

9. Further Research... 74

10. Bibliography ... 75

10.1. Literature ... 75

10.2. Internet Resources ... 79

11. Overview of Appendices ... 81






Figure 1: Structure of the Thesis... 10

Figure 2: Means-End Chain Theory ... 19

Figure 3: Example of Means-End Ladder ... 21

Figure 4: Hierarchical Value Map ... 32

Figure 5: Four-Part Model of CSR ... 47




ABLES Table 1: Objectives for a CRM campaign... 14

Table 2: Most Common CRM Frameworks... 15

Table 3: Summary of Academic Literature... 17

Table 4: Overview of Respondents ... 26

Table 5: Structure of Interviews... 27

Table 6: Overview of the Negative and Positive Groups... 40

Table 7: Consumer Value Creation Matrix for CRM... 59


1. I


The concept of Corporate Social Responsibility (CSR) started in USA about half a century ago.

The basic idea is that companies have moral obligations that go beyond their legal obligation to the shareholders, and there is thus a clear link to stakeholder theory (Brønn and Vrioni 2000).

CSR has increased its importance significantly in the recent years, and consumers are increasingly expecting and demanding that companies focus on other issues than the financial bottom-line. Consumers make their statement through the increased consumption of e.g.

organic and fair-trade products, and this change towards more ethical consumption has been called the biggest change in consumer habits ever (Jeng 2008). It is no longer discussed, whether companies have a social responsibility, but only to which extent they have it (Teilmann and Olesen 2003). CSR can be seen as a core value, and it raises ethical, environmental and social issues (www.csrkompasset.dk). This means that almost all processes in the company can be affected by the values of CSR (see appendix 1).

Cause related marketing (CRM) is a specific approach to marketing within the umbrella of CSR.

It has gradually become more common in Denmark to see CRM attached to different types of consumer products. The Danish Consumer Council is highly concerned about this development as a statement by head of department, Villy Dyhr, suggests: “If companies want to support e.g.

Save the Children, they should just send a part of the profits and not brag about it. Consumers should buy what they need and not a product where they think they also buy a little bit better conscience. It moves the focus from a product’s price and quality” (own translation, Straarup 2004). Despite The Danish Consumer Council’s negative evaluation, companies seem to embrace the concept of CRM, and they continuously launch new campaigns. During the writing process of this thesis, there were several current examples of CRM campaigns in Danish stores.

The Body Shop and MTV are supporting HIV/AIDS through the sales of a lip balm, Pilgrim sells CRM jewellery to support Médecines Sans Frontières, and Cult has lunched a provocative CRM campaign to support breast cancer research (www.thebodyshop.co.uk, www.prilgrim.dk, www.cultfonden.dk).

To improve the author’s knowledge about CRM, how it works in practice and to find inspiration for a research area within the field of CRM, preliminary research was done in relation to a CRM campaign that IKEA ran in November and December 2007. The simple campaign concept was a € 1 donation to UNICEF and Save the Children for each sold teddy bear. A brief survey among 32 customers showed that more than 70 percent found that the teddy bear campaign was positive or very positive. Nevertheless, 60 percent of the respondents


said that a CRM campaign had no influence on their purchasing decision. To see the campaign from the company’s perspective, a short, informal interview was conducted with IKEA’s communications responsible, Thomas Uhd. The interview revealed that the teddy bear campaign had been carried out for several years in the months before Christmas, and it was expected to continue in the future. Nonetheless, IKEA had no idea of customers’ satisfaction with the campaign. There was no specific target group for the campaign, according to Uhd, but the kick-off events were oriented towards children. Further, no research had been conducted to see how the campaign influenced the employees. Generally, it seemed that the cause was important for IKEA. In relation to the company’s production in Southeast Asia, it was important to have good relations to the non-governmental organisations (NGO) and make a proactive effort to create better conditions for their suppliers’ employees. It did, however, seem like there was only little consumer focus in the actual CRM part of IKEA’s CSR1.

The research in IKEA raised relevant issues for further exploration. Most noteworthy was that consumers were generally positive, but at the same time stated that they were not influenced by CRM. Further, the company did not seem very strategic in their CRM efforts. It had not integrated the consumer in the campaign as there was no defined target group and no focus on customer satisfaction and involvement. Customer satisfaction was basically measured in terms of sales, but since the CRM products were standard products and ideal for Christmas presents, it makes little sense to use sales as the only indicator for success.

Based on brief review of other CRM campaigns in Denmark (Junge 2004), it is assumed that IKEA is not unique in this approach to CRM, and the preliminary findings suggest a need to look at CRM in a more strategic manner to increase company benefits. Consumers are considered a crucial aspect in CRM as the donation is dependent on the consumer’s purchase. It is therefore interesting to see how companies can develop more strategic and successful CRM with a stronger focus on and integration of the consumer and her involvement. With a generally positive consumer attitude, it is intriguing that most consumers state that CRM is not influential in a purchasing situation. It is thus interesting to examine what companies can do to make CRM more appealing to consumers, so that it to a greater extent creates benefits for both the company and the consumer.

1 Further information about the preliminary research, the consumer survey and the transcribed interview with



Cause Related Marketing (CRM) is in some contexts also referred to as Cause Marketing or Corporate Societal Marketing. There are many definitions of CRM in the literature, and the differences have significant importance and implications for discussions and conclusions. The main difference lies within the perceived broadness of the concept. Adkins (1999) and others (File and Prince 1998; Till and Nowak 2000; Junge 2004) define CRM rather broadly. Adkins (1999) suggests that CRM can take many different guises, and e.g. sponsorship can be classified as CRM when the supported event is a good cause, and the sponsorship is used to promote the company.

In the seminal paper on CRM by Varadarajan and Menon (1988), it was proposed that the distinct feature of CRM is that the company’s contribution to a cause is linked to the customers’

engagement in revenue-producing transactions with the company (Varadarajan and Menon 1988:60). This very narrow understanding of CRM is shared by Kotler and Lee (2005) and others (Lavack and Kropp 2003; Polonsky and Speed 2001; Pracejus and Olsen 2004). A narrow definition of the concept of CRM allows a more comprehensive and thus useful terminology to develop around the concept. Kotler and Lee (2005) suggest a total of six options for doing good, i.e. cause promotions, CRM, corporate social marketing, corporate philanthropy, community volunteering and socially responsible business practices.

Only few authors have tried to provide a narrow, complete definition of the concept, and many simply refer to the definition proposed by Varadarajan and Menon in 1988:

“Cause-related marketing is the process of formulating and implementing marketing activities that are characterised by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organisational and individual objectives” (Varadarajan and Menon 1988:60).

Both Pringle and Thompson (1999) and Adkins (2000) propose their own definitions of CRM, but they both have the weakness that they do not specify the criterion of customer transaction in CRM. They do, nevertheless, contribute with an important point as both stress the mutual benefit for the company and the cause. Further, Pringle and Thompson (1999) also emphasise the strategic character of CRM.


This paper will use the combination of the literature’s definitions, which seems the most appropriate:

Cause related marketing is a strategic marketing and positioning activity that is characterised by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy the company’s, the cause’s and the customer’s objectives.

This definition acknowledges that the key players in a CRM transaction will always be the company, the cause and the customer. Shareholders, employees and other stakeholders are secondary, but, nevertheless, an important part of the whole picture.


Based on the preliminary field research and a review of existing CRM literature, the research question was developed. It is a fundamental assumption in this thesis that companies need to keep a strong consumer focus in CRM and that consumers play a crucial role in the success of CRM. It was decided to take a dual perspective to get a more complete picture of the topic and its implications. The purpose of this thesis is thus to answer the following main research question through a number of sub-questions:

How can companies develop and utilise strategic and sustainable CRM to optimise both consumer and company benefits?

1. What is CRM – in a company and consumer perspective?

2. Why engage in CRM – in a company and consumer perspective?

3. How to engage in CRM – in a company and consumer perspective?

The term ‘strategic’ refers to an approach to CRM, which is well considered and sophisticated.

The term ‘sustainable’ refers to an approach to CRM, which focuses on long-term gains that are durable. The findings of the thesis could be valuable to top-management and marketing managers. The preliminary research suggested that Danish companies are not reaping the full benefits of their CRM activities. This thesis aims at providing companies with a simple, yet rewarding approach to CRM.


This thesis will primarily focus on the company and consumer relationship and perspectives in CRM. This and other decisions imply that several other interesting areas will not be analysed thoroughly.


Most significantly, the cause perspective in CRM will not be examined. According to Adkins (2000), CRM can create, what she names, win-win-win advantages. Besides from providing companies and consumers with advantages, CRM can also be of significant importance to NGO’s and their causes. This thesis will leave the benefits for the cause more or less untouched, while it is still acknowledged that the cause plays a crucial role in a company’s success with CRM.

This thesis is written in a Danish context, and this will influence the findings. CRM is traditionally an Anglo-American concept, and several researchers have found that culture influences CRM (e.g. Brønn 2006; Struck 2007). However, the cultural aspect of CRM is not treated specifically in the thesis.

CRM is in this thesis analysed in a business-to-consumer context. CRM is, however, also becoming an increasingly important factor in business-to-business marketing. This will, nevertheless, not be analysed in present thesis.


2. K






This section will introduce the methodological considerations that lie behind this thesis. The purpose of the thesis is, as should be clear from the research question, to examine how companies can optimise CRM efforts to increase both consumer and company benefits. The following will present the methodological choices and considerations that the author has faced during the research and writing process and the implications hereof. Scientific approach, research design, data gathering, and empirical research will all be considered.

The scientific paradigm that a researcher adopts is highly influential on the way her research is conducted and thus also the findings and results. A single definition of the term ‘scientific paradigm’ does not exist, but Guba (1990:17) suggest the following: “A basic set of beliefs that guide action, whether of the everyday garden variety or action taken in connection with a disciplined inquiry.” The chosen paradigm will influence what is observed and examined, which questions are asked and probed, how questions are structured, and how results are interpreted (Kuhn 1996). Gummesson (2000) identifies the two main paradigms that a researcher can rely upon, the positivistic paradigm and the hermeneutic paradigm (Gummesson 2000:178). The positivistic paradigm is often used in natural sciences. It focuses on description and explanation within well-defined frames and is primarily driven by a deductive approach. Objectivity and logic are high priorities, and quantitative data is central in the positivistic paradigm (Gummesson 2000:178). The hermeneutic paradigm is more focused on understanding and interpretation. Research often concentrates on the specific and concrete, but still aims at making generalisations. The approach is often inductive and driven by the empirical data, which is primarily qualitative. Subjectivity is recognised and accepted (Gummesson 2000:178).

This thesis uses a hermeneutic paradigm as a starting point. It was decided that this approach would be superior in revealing the underlying motivations of consumers and their reasoning in relation to CRM. The research question of this thesis could also be answered with a positivistic paradigm, but it is likely that the conclusions would look very differently. This choice of paradigm naturally has consequences for the methodology of the thesis as will be seen in the following.


The purpose of this thesis is characterised by being mainly explorative and explanatory.

Explorative research has the main purpose of examining and studying phenomena or aspects that there only exists little knowledge about (Andersen 1999:24). Based on a comprehensive


review of the existing CRM literature, it became apparent that there only exists very little knowledge about strategic CRM, and the need for an explorative study thus arose. The first two sub-questions to the main research question are related to exploring and understanding the concept of CRM and its ties with consumers and companies.

Explanatory research tries to explain causalities and consequences. This will often be done with the purpose of making generalisations (Andersen 1999:27). The thesis’ findings of the explorative research are used as the starting point for the explanatory research where different aspects of CRM are analysed, interpret and explained. The third sub-question is linked to the explanatory aspects of this thesis. The explanatory parts of the thesis also have some normative characteristics as normative research goes a step further and tries to make relevant recommendations for actions and solutions (Andersen 1999:28). This thesis tries to make specific recommendations for companies in CRM based on the explorative and explanatory parts, and this takes a somewhat more normative character.


The choice of the hermeneutic paradigms entails that it is more natural to use an inductive approach to reasoning. An inductive approach implies that the researcher makes generalisations based on the empirical data. In other words, the researcher moves from empirical data to theory (Andersen 1999). One can never be absolutely certain about inductively found conclusions as they are based on empirical data, which is rarely complete (Thurén 1992:19). Generally, most of this thesis uses an inductive approach as the empirical data is used to make generalisations and recommendations.

With a deductive approach the theory becomes the controlling element, and empirical data is used to support and confirm the theory. Deduction entails that reasoning is always correct when it is logical according to the theory. This does, however, not mean that the reasoning is actually true in real life (Thurén 1992:22). Deductive elements are seen in the thesis as qualitative interviews are conducted according to a theoretical foundation, the Means-Ends Chain theory. The interviews are conducted in a manner that will confirm the theory, and the theory is not questioned. Once the data is collected, the approach to processing it is more inductive.



Research design is the combination of approaches to data gathering (Andersen 1999). Data gathering is determined by the research purpose and question. The research design of this thesis has taken the shape of a case study according to Yin’s definition (Yin 1989 in Andersen 1999:164). A case study is an empirical study that examines a current real-life phenomenon. The borders between the phenomenon and its context are not clear, and it is possible to use several data sources to illustrate the phenomenon. It is central that the design only concerns one phenomenon and that it is non-experimental (Yin 1989 in Andersen 1999:164). With the research question established, the phenomenon has been chosen. Nevertheless, it is difficult to define the limits of the phenomenon, CRM, and several data sources are used to illustrate the phenomenon. Case studies are often associated with qualitative data collection (Yin 1989 in Andersen 1999:164).

An important aspect of the research design is the method for collecting data. Andersen (1990) differentiates between three data collection approaches, i.e. the documentary method, the observing method and the questioning method. These can be combined in different ways to complement any research design. This thesis has used the documentary and questioning methods. The following is based on Andersen 1999:62-72.


This method is based on the indirect study of a phenomenon, e.g. through the use of secondary data. Secondary data has been collected for another purpose than the current, but may still provide useful knowledge. A major drawback of this type of data is that it is fixed and cannot be influenced as it already exists. The documentary method is very useful as it is cheaper and less time demanding than other methods.

In the present thesis, the documentary method has played an important role. An extensive academic literature review was conducted in the beginning of the writing process and helped defining the research question. The author aimed at developing a broad knowledge about CRM and already existing research. The internet has also been used as a documentary method to find information about CRM, previous thesis works on similar topics, and blogs about CRM.

Current and previous CRM campaigns have been studied in detail on the internet.



The questioning method basically consists of asking questions, either in writing or verbally.

Generally, questions are asked to obtain knowledge about the respondent and her habits, attitudes, opinions, and experiences. The questioning method can generally take two different shapes, the quantitative survey and the qualitative interview.

Due to the purpose of this thesis being exploratory and explanatory and the fact that a hermeneutic paradigm is the researcher’s fundament, it was natural to choose a qualitative questioning method. The qualitative method is superior in gaining in-depth knowledge of the respondent’s thinking and reasoning patterns (Kvale 1997). Further, the choice of Means-End Chain theory supported this data collection method as it is mainly linked with qualitative laddering interviews. The methodological concerns related to the qualitative consumer interviews are found in chapter 5.

The questioning method was also used in an expert interview with CRM expert, Niels Heilberg.

This interview was conducted in the final stage of the writing process, and the purpose of the interview was to discuss the findings of the thesis and put them into a context. Interviewing a person in a superior position can create certain challenges for the interviewer. The interviewee will often be used to taking the lead in conversations, he will not feel uncomfortable about the interviewing situation, and it is not unlikely that he will see the interviewer as inexperienced and green and thus acts didactic (Andersen 1999:225). It is therefore critical for the interviewer to take the lead in the conversation from the beginning and focus less on making the interviewee feel comfortable and relaxed. As the interviewer had little interviewing experience, it was difficult to prepare for the challenges. The interview was conducted as a semi-structured qualitative interview. The interview guide was loosely structured around the results that had been reached in the thesis and also aimed at getting new insights on certain topics (see appendix 2 for the complete interview guide). The interview lasted approximately one hour and was conducted at the interviewee’s office. The problems that Andersen (1999) identifies were experienced to some extent, mainly due to the interviewer’s lack of experience. Nevertheless, the interview still generated interesting and useful knowledge for the discussion of the thesis’


The interview was recorded and transcribed by the author afterwards. Three dots (…) were used to indicate pauses in the speech, and it was indicated in Italic when the speech is not clear in the recording. The interview was conducted in Danish. The quotes in the thesis are translated


to the author’s best ability. The transcribed interview can be found on the enclosed CD-rom as appendix 3.A.


Figure 1 gives a graphical illustration of the thesis’ structure.

Figure 1: Structure of the Thesis

PART II:Background, prior research and theoretical foundation

PART III: Empirical findings, analysis and discussion hereof

PART IV: Concluding chapters

PART I:Introducing CRM, the research question and the methodological approach Literature Review

Chapter 3

Theoretical Framework Chapter 4

Consumer Perspective

Chapter 5

Company Perspective

Chapter 6 Discussion

Chapter 7

Introduction and Methodology Chapter 1 & 2

Conclusion and Further Research Chapter 8 & 9


3. L




A large amount of research has been conducted on CRM since the first cases of CRM saw the light of the day. First, this section will start by very briefly presenting one of the earliest examples of CRM2 and subsequently introduce a short overview of the academic literature within the field. The literature will be examined from a customer perspective and a company perspective.

The case of American Express is today considered one of the first examples of CRM. The highly successful campaign was introduced in 1983 with the purpose of contributing to the restoration of the Statue of Liberty. American Express launched a three-month promotion where the company donated 1 cent to the cause every time a credit card was used and 1 dollar for each new card issued. The campaign raised 1.7 million dollars for the restoration of the Statue of Liberty, the use of American Express cards rose by 28 percent and new card applications increased by 25 percent (Adkins 2000).



There exists a vast amount of research on CRM in relation to consumers, and it is often conducted in an Anglo-American context. Some papers have focused on the cultural aspects in CRM (e.g. Lavack and Kropp 2003; Brønn and Vrioni 2000; Junge 2004; Teilmann and Olesen 2003; Struck 2007). Both Teilmann and Olesen (2003) and Brønn and Vrioni (2000) mention the cultural differences and the welfare system in Denmark and the Nordic countries as important aspects in comparisons with USA and United Kingdom. Junge (2004) uses the broader definition of CRM, but the figures can, nevertheless, still give an indication of Danes’

attitude to CSR and cause marketing3 in general. He finds that 61 percent of the respondents are either positive or very positive towards what he defines as CRM. It is also found that younger people and men are more positive than other groups. Further, people with higher educations and higher incomes are more positive as are people living in urban areas (Junge 2004).

However, the gender differences found by Junge contradict research, which suggests that women have more favourable attitudes towards both the cause and the company (Ross et al.

1992; Husted and Whitehouse 2002).

2 For more recent examples of CRM, pls. see appendix 4. It gives a detailed description of the cases that are used in the consumer interviews.

3 Cause marketing is defined as marketing that supports a good cause in some way, e.g. by raising awareness. CRM


Figures generally support the effectiveness of CRM campaigns. Gupta and Pirsch 2006 find that 78 percent of their surveyed consumers state that when price and quality are equal, they would be likely to switch to brands or retailers associated with a cause or issue that they cared about.

54 percent would pay more for a product associated with a cause that they cared for. 56 percent of Australian consumers are willing to switch retailer, where an appropriate good cause will benefit (Endacott 2004).


Consumers will often be more likely to support charity and CRM based campaigns when the product in question is of frivolous rather than of practical nature (Strahilevitz and Myers 1998).

It is suggested that “the altruistic utility offered by the charity incentives may be more complementary with the feelings generated from frivolous products than with the more functional motivations associated with practical products” (Strahilevitz and Myers 1998:444).

Hamlin and Wilson (2004) note that case studies show that CRM is almost solely used with products connected with low involvement decision-making behaviour, i.e. FMCG and services.

CRM with high-involvement products is very rare and not very likely to succeed as consumers are often more brand loyal for other reasons (Van den Brink et al. 2006).

Further, research has explored the relationship between donation and discount in price. When the discount/donation becomes larger compared to the purchase price, the majority prefers the discount, especially when the product is practical. When the discount/donation is smaller, 1-5 percent of the price, the majority would choose a donation (Pracejus and Olsen 2004).


Many consumers thus only prefer a donation when the amount in question is small. On the other hand, consumers are often more sceptical and believe that the cause is being exploited when the donation is smaller (Webb and Mohr 1998; Drumwright 1996). Perceived cause exploitation has a negative impact on customer purchasing intention. Barone et al. (2000) examine purchasing intentions in relation to the tradeoffs in price and performance that the customer is required to make, and the customer’s feelings about the company and its intentions.

It is found that the company’s CRM motivation influences the consumers’ choice when moderate tradeoffs in either price or performance are required (Barone et al. 2000). That is supported by Van den Brink et al. (2006) who claim that customers evaluate the motives of the company in a CRM setting. A company with intrinsic motivations believes that the CRM programme can be rewarding in itself, whereas an extrinsically motivated companies search for


rewards from the environment. The first motivation is more altruistic, while the latter is more egoistic and concerned with self-interest. It is argued that consumers respond more positively when they judge the motivation to be intrinsic (Van den Brink et al. 2006).

3.1.4. THE CAUSE

Consumers often perceive the brand/cause fit to be a measure of the company’s intentions and motivations behind a CRM campaign. Pracejus and Olsen (2004) study the fit between brand and cause and find a strong relationship. A company can charge more for a CRM campaign product when the perceived fit is higher. A high-fit campaign has 5-10 times the impact than a low-fit campaign has (Pracejus and Olsen 2004:640). Kotler and Lee (2005) also support the idea of fit. Hamlin and Wilson (2004) also look at the brand/cause fit, but find more scattered results. They find that good fit show superiority compared to a low brand/cause fit, but it is also found that the purchasing intentions for some products decrease with any CRM campaign and increase for other products regardless of fit. Nan and Heo (2007) also partly reject the concept of fit with another survey, which concludes that “the addition of a CRM component, whether it involves a high or low brand/cause fit, to a regular ad message is beneficial in that it enhances the sponsoring company’s overall image” (Nan and Heo 2007:70). It is still suggested that the effect of CRM may be increased with a good fit compared to a less appropriate fit (Nan and Heo 2007).

Broderick et al. (2003) and others (Kotler and Lee 2005) find that the individual consumer’s own relationship with and involvement in the cause have significant influence on the purchasing intention. The concept of fit thus extends to a matter of fit between the company/product, cause and the customers. Consumers tend to feel that their personal role as contributor is very important in a CRM purchase situation (Broderick et al. 2003). The nature of the cause is therefore rather important. The consumers’ involvement in the cause varies according to personal experience, relevance of the cause and the degree of emotional involvement in the cause (Broderick et al. 2003:601). More controversial causes or charity organisations can create resistance and alienate some customers or even lead to boycott (Kotler and Lee 2005; Webb and Mohr 1998). It seems difficult to determine what consumers consider a good cause in a CRM context. Good causes differ highly from country to country and over time. Some of the common causes across borders are related to health, combating poverty/homelessness, environmental issues/nature and children/education (Endacott 2004).

World events like 9/11 can change consumers’ opinions about “a good cause” (Endacott 2004).

There is also a preference for local causes over national causes (Ross et al. 1992; Welsh 1999;


Varadarajan and Menon 1988). 70 percent actually give a local donation a higher degree of importance (Husted and Whitehouse 2002).



Varadarajan and Menon published a seminal work on CRM in 1988, and twenty years later with much research conducted this paper still stands as one of the corner stones in CRM literature.

Varadarajan and Menon refer to CRM as “doing better by doing good” and view it as the alignment of corporate philanthropy and enlightened business interest (Varadarajan and Menon 1988:59). According to Varadarajan and Menon, there can be a range of different objectives for a CRM campaign. They are listed in table 1.

Table 1: Objectives for a CRM campaign

Gaining national visibility

Enhancing corporate image

Thwarting negative publicity

Pacifying customer groups

Generating incremental sales

Promoting repeat purchases

Promoting multiple unit purchases

Promoting more varied usage

Increasing brand awareness

Increasing brand recognition

Enhancing brand image

Reinforcing brand image

Broadening customer base

Reaching new market segments and geographic markets

Increasing level of merchandising activity at the retail level for the brand

Other, more intangible objectives have since been added, e.g. being seen as a good corporate citizen, helping the local community, communicating the essence of the company’s mission and motivating staff (Endacott 2004). It is, nevertheless, still stressed by several that CRM is business and marketing with the main objective of making money for the company. It is not and should not be considered philanthropy (Welsh 1999; Husted and Whitehouse 2002; Lavack and Kropp 2003). Further, it is suggested that the effects of unethical behaviour can be reduced through a CRM campaign (Webb and Mohr 1998) and that “CSM4 programmes may provide a reservoir of goodwill that will help deflect criticism and overcome negative publicity from unexpected events” (Hoeffler and Keller 2002). This also links to the fact that in some cases the brand will benefit substantially more than the causes they are trying to help (Endacott 2004).

Source: Varadarajan and Menon 1988:60



Keeping the multiple objectives for a CRM campaign in mind, it is important to consider the fundamental understanding of what CRM is or should be. The issue of strategic versus tactical use of CRM is addressed in several studies (Van den Brink et al. 2006; Varadarajan and Menon 1988), while others take it for granted that it is either a tactical tool (Polonsky and Speed 2001;

Nan and Heo 2007) or a strategic tool (Barone et al. 2000; Husted and Whitehouse 2002). Van den Brink et al. (2006) have developed a simple model that focuses on four aspects to determine the nature of a CRM campaign. Purely tactical CRM is characterised by a low level of congruence between the cause and the company’s core competency, short duration of the campaign, few invested resources and little management involvement. A high level of congruence, longer duration, more invested resources and management involvement defines completely strategic CRM. A CRM campaign can, however, be a mix of the two with both tactical and strategic aspects. Van den Brink et al. (2006) conduct a comparative survey of tactical and strategic CRM and relate the findings to brand loyalty. The main hypothesis, i.e.

strategic CRM creates higher brand loyalty than tactical CRM, is generally supported. The difference in brand loyalty when strategic and tactical CRM is compared, is, however, only significant for low-involvement products (Van den Brink et al. 2006).


When CRM is defined narrowly, the donation is dependent on a customer’s purchase for the donation to take place. Kotler and Lee (2005) suggest various different ways to set up a CRM campaign. The most common frameworks for CRM donations are listed in table 2.

Table 2: Most Common CRM Frameworks

Further, the campaign can be specific for just one product or for a whole line of products, and the company can choose to set a ceiling for its contribution. Finally, there can be a timeframe for the campaign or it can be open-ended (Kotler and Lee 2005). Welsh, on the other hand, states in relation to CRM that “every promotion should have a clearly defined point of closure”

(Welsh 1999:24). However, others (Varadarajan and Menon 1988; Bulletpoint 2004) focus on the long- or medium-term perspective of CRM. Van den Brink et al. (2006) also support a long-

A specified amount donated for each product sold

A specified amount donated for every application or account opened

A percentage of the sales of a product or transaction donated

The company matches the consumers’ contribution or a percentage of net profit from sales of a product

Source: Kotler and Lee 2005:83

Table 2 (source: Kotler and Lee 2005)

Table 2 Table 2 (source:

Kotler and Lee 2005)


term perspective as this was found to be the most important factor in making strategic CRM more useful in improving brand loyalty compared to tactical CRM. Furthermore, a long-term perspective makes good sense financially as it has been found that even a high fit CRM campaign costs more in donations than can be achieved in short-term sales (Pracejus and Olsen 2004).


One of the most important aspects of a CRM campaign is the choice of cause and charity.

Many of the objectives that Varadaranjan and Menon (1988) list require some transfer of associations from the cause to the company, which makes it extremely important to consider, which associations are desirable for the company (Hoeffler and Keller 2002). It is also necessary to consider the consumers’ own values and how they link with the cause. If the cause is not relevant for the consumers, then transfer of associations is not very valuable nor easily conducted. Relevance can be created if a local cause is chosen. Further, it is worth noting that it may be difficult to get the right attention with a very popular cause. More than 300 companies currently associate themselves with breast cancer (Hoeffler and Keller 2002).

Hoeffler and Keller (2002) differentiate between two types of strategies for choosing a cause.

Commonality involves choosing a cause that shares similar associations with the brand and will serve the main purpose of reinforcing these associations. Complementarity is a more difficult approach, but it can be useful if the company is trying to differentiate itself from similar companies. It creates new brand associations through a cause with very different associations, and this can be difficult for competitors to copy.


CRM is a part of the concept of CSR. It has mainly been used during the last 20 years and primarily in an Anglo-American context. Table 3 tries to structure the most important findings of the literature in relation to the research questions of this thesis.


Table 3: Summary of Academic Literature

Consumers Company

What is CRM? - Making small donations through purchase - Low involvement products

- Frivolous products

- Strategic tool - Tactical tool

- Business, not philanthropy

Why engage in CRM?

- Satisfaction of self-actualisation need - Important role as contributor - Care for cause

- The right cause

- Gaining national visibility - Enhancing corporate image - Thwarting negative publicity - Pacifying customer groups - Generating incremental sales - Promoting repeat purchases - Promoting multiple unit purchases - Promoting more varied usage - Increasing brand awareness - Increasing brand recognition - Enhancing brand image - Reinforcing brand image - Broadening customer base - Reaching new market segments and geographic markets

- Increasing level of merchandising activity at the retail level for the brand

- Motivating staff

- Being a good corporate citizen - Communicating essence of brand

How to engage in CRM?

- Switch brands and retailer - Pay more

- Improve brand and company perception - Evaluating company motivation

- Donation frameworks - Time perspective of CRM - The right cause – fit

- Commonality vs. complementarity - Level of integration with other aspects - Tactical vs. strategic approach

Own creation


4. T




The academic literature provides a fundament for understanding CRM, but still leaves a key area almost totally uncovered. Through the literature review, the need to examine a more strategic and consumer oriented CRM approach arose. In 1988, Varadaranjan and Menon suggested that CRM can make a contribution to a brand building process, but many Danish case studies show that this is rarely the reality when branding is considered to be something durable and long-term (Junge 2004; Andersen 2005). In order to answer the research questions of this thesis, the gaps in the existing academic literature will be examined. It is reasoned that consumer motivation is essential for understanding how companies can succeed in strategic CRM. Therefore, this chapter will firstly introduce the theory of Means-End Chains as it is considered relevant and appropriate for examining the consumers’ motives for engaging in CRM and their cognitive structures behind such an engagement. Relevant aspects of the theory are presented with a focus on aspects that will be used in the subsequent data gathering and analysis.

Furthermore, according to the academic literature CRM can have a positive impact on a company’s brand. To develop CRM for the purpose of strengthening strategic branding processes, it is necessary to consider how a brand is built up and what role CRM can take in such a process. Ellwood’s (2002) framework of emotional output in brand consumption is presented briefly as it compliments the findings of a MEC analysis.


The fundamental belief behind the Means-End Chain (MEC) theory is that consumers engage in consumption to achieve a desired end-state. Consumers purchase products or engage themselves in other activities because they will provide some attributes that will create certain consequences, and in the end the consequences will fulfil some essential values for the consumers. Consumption of a product is thus simply a mean to reaching a higher end-goal (Søndergaard 2003). The two main assumptions in the theory are that all consumer actions have consequences and that consumers are able to link the actions they take with their consequences (Gutman 1984). Further, it is assumed that the relationship between the product’s attributes, consequences and values is organized in a hierarchically manner, starting with the concrete attribute of the product or an activity and ending with the consumer’s terminal values that are fulfilled through the consumption. The means-end chains connect the consumer’s product knowledge with the consumer’s self-knowledge (Walker and Olson 1991). Figure 2 gives an overview.


Figure 2: Means-End Chain Theory

The advantage of MEC is that it will take the focus beyond simple product attributes and also study the personal values of the consumer. Gutman (1982) uses the definition of values proposed by Rokeach (1973): “A value is an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence”

(Rokeach 1973, in Gutman 1982:63). Two types of values have been defined, i.e. terminal and instrumental values. Terminal values are preferred end-states of existence (e.g. security or happiness), whereas instrumental values are related to behaviour (e.g. honest or brave) and the instrument to reach the terminal values (Gutman 1982:63). Every means-end chain will be unique as it describes the individual consumer’s own perception and values, but it is very common that there are similarities and overlaps in the chains (Søndergaard 2003).

In the literature, there are two main approaches to what MEC can be used for (Grunert and Grunert 1995; Søndergaard 2003). The motivational approach focuses on how MEC can provide insight into consumers’ shopping motivations and buying behaviour. The consumer will reflect on her own motivation for consumption, but this qualitative reflection is determined by the situation. The cognitive structure approach aims at understanding the cognitive structures in human memory in relation to consumption, i.e. the structures that determine how consumption-related knowledge is stored and organized (Søndergaard 2003). For the purpose of this thesis, it is found not to be of significant importance to take a stance in the discussion of the motivational approach versus the cognitive structural approach. They are interrelated and linked and as a vast amount of the academic literature does not even differentiate between the two, it has been decided to use a combination.

Source: Walker and Olson 1991 Concrete


Abstract attributes

Terminal values

Functional consequences

Psychosocial consequences Instrumental

values PRODUCT





MEC theory has traditionally been used for especially advertising purposes, but has also proved to be useful in other areas. The “Means-End Conceptualization of the Components of Advertising Strategy” has been used to develop advertising strategies and test the effect of advertisements (Søndergaard 2003; Bech-Larsen 2001). The focus of this type of advertising strategy is the individual customer and the specific product. The fundamental assumption is that product attributes that are linked to the consumers’ values have a stronger impact on product preferences than product attributes with no value attachment (Bech-Larsen 2001). MEC has also proved useful in product development (Vriens and Hofstede 2000; Søndergaard 2003).

Vriens and Hofstede (2000) suggest that MEC can provide the crucial information, which can contribute to formulating the essential core benefit proposition of a new product (Vriens and Hofstede 2000:8). Furthermore, it has been found that MEC can be helpful when conducting market segmentation. Analysis of means-end chains can be used when grouping consumers into different segments (Reynolds and Gutman 1988; Vriens and Hofstede 2000). Finally, MEC can be used in the assessment of brands. Knowledge of the values consumers use within a certain product category is vital when assessing a brand (Vriens and Hofstede 2000). Consumers search for a match between own values and brand values, and the knowledge that a MEC analysis provides is thus highly valuable. This approach raises brand assessment above the level of product attributes and can create a sustainable competitive positioning.


The laddering technique is the most common and fundamental way to gather MEC data (Søndergaard 2003:23). It basically refers to the manner in which a one-on-one in-depth interview is conducted. The technique should help the respondent construct meaningful associations that in the end will constitute means-end chains or ladders. The interviewer should continuously probe the statements of the interviewee to get to the underlying reasoning and associations and through this create meaningful chains and hopefully reach the value-level in some cases. The question will often be: “Why is this important to you?” whenever the interviewee makes a statement. The general notion is to make the respondent respond and thereafter react to and reflect over her response (Reynolds and Gutman 1988). Figure 3 shows an example of how a ladder can develop from attributes through consequences to value. The example also shows that the respondent may not necessarily go through all the stages of concrete and abstract attributes, functional and psychosocial consequences and instrumental and terminal values.


Figure 3: Example of Means-End Ladder

MEC data is thus traditionally collected through qualitative interviews where the respondent’s natural flow of speech is not restricted. This approach is called soft laddering. Hard laddering refers to strictly structured interviews or questionnaires and computerized data collection devices. The hard laddering approach may not be as effective in allowing the cognitive pattern and reflections of the respondent be revealed, but possible bias created by the interviewer are avoided. On the other hand, the respondent will often be uncomfortable not knowing the answer to a simple question and may start answering in a strategic manner. In the interview situation, the interviewer is able to observe this change in the respondent’s behaviour and take the necessary precautions (Grunert et al. 1995). Grunert and Grunert (1995) argue that soft laddering is the most appropriate when the respondent is expected to have a weak cognitive structure either due to low involvement or little experience. When the involvement is expected to be high and the respondent is an expert in the area, the cognitive structure is assumed to be elaborate, and the use of soft laddering is also recommend. Hard laddering can be used in cases with average involvement and experience (Grunert and Grunert 1995:217).

The technique demands a lot from the interviewer as a facilitator as the whole laddering process is dependent on the interviewer knowing which statements to probe and pursue and which to leave. Further, in some cases the interviewer may have to ask what seem to be obvious and stupid questions to move to higher levels. Another common problem is that the respondent really does not know the answer as e.g. the consequence is so important to the respondent that she has never considered the reasoning behind it. In this case, it can be helpful to turn the question around and pursue negative laddering and thus ask what would happen if e.g. this consequence would not be provided. An alternative solution may be to frame the consequence in a situational context and e.g. ask when was the last time this consequence was experienced (Reynolds and Gutman 1988). Experience shows that one of the most challenging aspects of MEC interviewing is when to stop probing. When the respondent really does not know the answer to a probing question, he will often start using a strategic perspective in answering the questions (Grunert et al. 1995:10). This is not very beneficial for uncovering values and consequences as the interview has then become a task of problem solving for the respondent (Grunert et al. 1995:10). It is therefore essential for the interviewer to realise this development in the interviewing process and to accept that not all attributes will create a ladder to value level.

Flavoured chips  Strong taste  Eat less  Do not get fat  Better figure  Self-esteem

Source: Reynolds and Gutman 1988:12



In order to analyse the obtained MEC data, coding should be conducted. Coding means grouping together different answers, which are regarded as similar (Grunert and Grunert 1995).

Statements that appear similar are placed together in one category with a unifying title. The purpose of coding is to structure the data in a transparent and organized manner, so that it can be used in the further analysis.

There are several issues that should be considered when coding empirical data. It can be difficult to determine whether a certain statement is an attribute, a consequence or a value, e.g.

healthy. The most important factor for this issue is to take the context and the meaning behind the wordings into account (Søndergaard 2003). This is also an aspect that the interviewer should keep in mind throughout interview as probing should be used to ensure that the answers and their meanings are clear. Another very important aspect is the aggregation level and the “right”

level of abstraction (Grunert et al. 1995; Reynolds and Gutman 1988). The main issue is how to construct categories that are broad and abstract enough to cover several respondents’ answers without loosing too much information from their answers. Further, the coding process is highly dependent on the researcher and can easily become very subjective, but complete and objective procedures for this aspect still remain to be developed in the academic literature (Søndergaard 2003).

Based on the coded data an implication matrix should be developed. The matrix should contain all the coded data and show the connections between attributes, consequences and values (Søndergaard 2003). The matrix should show the number of times each element leads to another specific element.

The implication matrix then serves as the base for building the Hierarchical Value Map (HVM).

The HVM illustrates the most important connections between the attributes, consequences and values (Søndergaard 2003). According to Grunert et al. (1995), the HVM can be perceived as an estimate of the cognitive structure of the respondents group. At the individual level, the data is not rich enough to give a complete picture as the ladders will only reveal some fragments of the respondent’s cognitive structure. However, when ladders from a homogeneous group of respondents are merged, a more complete picture of this group’s cognitive structures can be estimated (Grunert et al. 1995:15). In order to achieve a useful and clear map, it is in most cases necessary to reduce the number of categories. Most researchers are therefore using a cut-off level to determine which categories to exclude and include. The cut-off level indicates the


number of times a connection between two categories should be stated by the respondents to be included in the map (Søndergaard 2003). There are no statistical or theoretical criteria that can help determine the cut-off level, so it is mainly based on the compromise between retaining information on one hand and creating a manageable map on the other hand (Grunert et al.

1995). It is this shift from the qualitative nature of dealing with the interviews to the quantitative manner in which the interviews are analyzed, which distinguishes laddering from other qualitative research methods and makes it unique (Reynolds and Gutman 1988).


The important critique of the theory questions the theory’s basic assumptions, i.e. that hierarchical structures exist in the mind of the consumer and that consumers are able to retrieve and verbalised these (Søndergaard 2003). The laddering technique is accused of forcing the respondent to construct ladders that reach the value level, even though these ladders may not even exist in the mind of the respondent. The respondent may feel uncomfortable if she cannot answer and will invent appropriate answers. It can be argued that the ladders do exist, but the respondent has just not been aware of their existence until they are verbalised in the interview (Søndergaard 2003).

Grunert and Grunert (1995) make several critical points about the role of the interviewer/

researcher. The importance of the interviewer’s cognitive structures is stressed and is expected to be highly influential on the way the interview precedes and the results of the coding process.

To avoid these issues and raise the quality of the MEC data, it is important that the interviewer is experienced and has a good knowledge of MEC and how to handle various problems that might arise during the interview session. The raw data should thus more be a result of the respondent’s cognitive structures and processes than the interviewer’s cognitive structures and processes (Grunert and Grunert 1995:212).


To increase the value of CRM to the company, it should be considered how it relates to the brand and the brand’s values. Values are an essential aspect of a brand, and it is thus necessary to understand the relationship between the brand and CRM.

Consumers manage their self-identity and fulfil intangible needs through the use of branded goods that coincide with their personalities and values (Ellwood 2002). When consumers develop and express their identity through brand consumption, they will look for a fit between


their own identity and the brand’s identity. According to Aaker (2002), the brand identity is a unique set of brand associations that represent what the brand stands for (Aaker 2002:68). The brand identity can be seen as being built up by a core identity and an extended identity. The core identity is the essence of the brand, which remains constant over time, products and markets. The extended identity adds the details and texture and makes the identity complete.

The product itself, the slogan and the brand personality will often be a part of the extended brand identity (Aaker 2002). Brand personality is both distinctive and enduring and includes both values and more specific characteristics (e.g. gender and age). The personality is created through the influence of many different factors, both product-related (e.g. category, packaging, and price) and non-product-related (e.g. user imagery, sponsorships, and symbols) aspects (Aaker 2002). CRM could potentially become a non-product-related aspect of the brand personality and could add values that would appeal to the consumer.

Ellwood (2002) defines four different types of pleasures, which are the consumer’s non- functional output of brand consumption, i.e. ideological, psychological, sociological and cultural pleasures. Brands will often try to use one or combine two of the dimensions for its core, while it is not likely that a brand can provide the consumer with all the pleasures.

Ideological brand pleasure relates to the meaning that the brand embodies. Ideological beliefs work on the highest level of the consumer’s values and are often strongly internalised.

Ideological beliefs can be related to the consumer’s class and education and will often be difficult to change. Psychological pleasures derive from the feeling of personal achievement that the brand can create with the consumer. Examples of psychological pleasure include personal satisfaction, performance, and mental stimulation. This kind of pleasure is fully personal as it fulfils the needs for individualisation. Sociological brand pleasure will arise as the consumer gets satisfaction from group association and recognition through the brand consumption. This type of pleasure will satisfy the need for socialization and belonging. It plays a strong role in the creation of group identity. Cultural brand pleasure is created through the consumption of brands that lead their category and have been able to create some kind of cult around them. For the consumer, the brand can give them the feeling of a cult identity status. A company should support the consumer’s pleasure creation and as these are linked to values and emotions, CRM can play a crucial role in this process.



The previous sections have given a picture of MEC theory and branding theory relevant for MEC. MEC is according to the literature a useful tool that can reveal consumers’ motivations and underlying cognitive structures. The main assumption in MEC theory is that consumers search for a non-product-related output when they purchase a product. It is expected that MEC will prove to be a valuable theoretical framework that can assess the motivations and reveal the cognitive structures that influence the consumption of CRM products. This knowledge can be helpful for companies that wish to use CRM.

According to branding theory, consumers are looking for a match between their own identity and the brand’s identity. The single most important aspect of brand identity is values. MEC can be an excellent tool to evaluate, which values CRM can contribute with. The brand identity is influenced by the brand personality, and an important aspect of brand personality is suggested to be community involvement and thus CRM. A brand will offer a value proposition to the consumer, i.e. both product and non-product related values that can be achieved through product consumption. This is strongly tied to MEC as it also presupposes a similar means-end relationship between product attributes and values. Further, four different types of emotional pleasure are suggested to be the consumer’s output of brand consumption. These pleasures are also closely related to fulfilment of the higher needs that the MEC theory defines as the real ends for consumption.



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