Local-relevant cause-related marketing reduces piracy consumption in foreign markets

This paper provides a solution to multinational companies (MNCs) who markets branded consumer products in countries where piracy is prevalent. It tests whether corporate social responsibility (CSR) initiatives can become a firm-specific advantage of a foreign company to mitigate some of its liability-of-foreignness (LOF). Specifically, it provides a social identity explanation of using locally relevant cause-related marketing (CRM) campaign to reduce consumer’s intention to participate in counterfeit consumption. In two studies, we demonstrate that foreign companies are more susceptible than domestic companies to counterfeit attack. However, running a CRM campaign that benefits the local people can make foreign companies as strong as the domestic companies to fight against the counterfeit. We reason that consumers in developing countries perceived CRM campaign with local beneficiaries influential to the local community in a positive way; this facilitates local consumers to “recategorize” the foreign companies who run these CRM campaigns from “non-local members” to “local members” (i.e., perceiving them as less foreign), thereby increasing the perceived benefits associated with purchasing the authentic branded products over their counterfeit counterparts. The findings of this paper help practitioners in designing effective CSR program against counterfeit consumption.