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An increasing number of brands in the marketplace are being linked to social causes. Such enhancements are called embedded premiums (EP) and can be quite effective as a sales promotion strategy. Across three experiments, using a nationwide internet panel, we find that (i) at low denominations EP is more effective than an equivalent price discount, (ii) EP benefits an unknown brand more than a known brand, (iii) an identifiable segment of individuals prefer the “other” over “self,” suggesting possible EP optimization and segmentation strategies, (iv) a customization strategy is shown to be more effective than a coverage strategy. These findings have broad implications for brand managers in regard to resource allocation and EP program ROI.

Doing Well While Doing Good. Linking A Social Cause To Product Promotions: Why It Works And How To Make It More Effective