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Cause related marketing


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Genesis and role of Cause Related marketing

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Cause related marketing

  2. 2. WHAT IS CAUSE RELATED MARKETING? “Cause Related Marketing (CRM) is a marketing strategy that targets the social concerns of consumer groups. A company connects its own marketing and sales goals to a social cause, or charity, to the mutual benefit and promotion of both partners. The business goal: to develop customers’ trust and loyalty, improve corporate reputation and ultimately increase sales.” “The public association of a profit company with a non-profit organization for the purpose of promoting the company’s product or service while raising money for the charitable organization.” “Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a "for profit" business and a non-profit organization for mutual benefit. The term is sometimes used more broadly and generally to refer to any type of marketing effort for social and other charitable causes, including in-house marketing efforts by non-profit organizations.” CRM campaigns can range in complexity from the simple donation of a percentage of a purchase price, to complicated arrangements including special projects and long term, integrated relationships. CRM is proving itself to be the first step towards profitably combining social and commercial marketing goals. People might think Corporate Social Responsibility (CSR) and Cause Related Marketing (CRM) to be quite similar. But there is a very fine line between CSR and CRM. CSR is when the firm tries to give back to the society what it gains from it, whereas cause related marketing is when it invests time and money towards a particular cause. Many a times these organizations end up supporting an NGO which is directed towards a particular cause. This approach can be used by the firm to enhance its images as well to show positive brand associations. Marketers can use cause related marketing with 2 benefits – Better social responsibility or better commercial advantages because of associations or both can results from cause related activities. In fact if an organization supports a cause all out it can further increase its brand equity through recognition. Thus a marketer needs to understand what benefit will cause related marketing have towards the organization as well as the shareholders before implementing it. CRM programs are driven by clear marketing objectives: Building corporate, brand and product awareness Increasing sales and income Developing trial and repeat purchases Promoting a new product Promoting differentiation Adding value.
  3. 3. The “Tata Tea Jaago re” campaign is a cause related marketing campaign and is a perfect example of cause related marketing. The campaign is completely against corruption. The ads generally show ministers accepting bribes or college authorities accepting bribes for admissions. We can therefore say that the TATA is carrying out cause related marketing activity, i.e. they are supporting a cause. This has increased the brand equity of TATA brand as well because corruption is a cause against which voice need to be raised. Examples of CRM also include Mercedes Benz donating a percentage of sales totaling a contribution of approximately $1 million to help find a cure for cancer, and Estee Lauder's donation of a percentage of sales totaling $500,000 for breast cancer research. HISTORY One of the first examples of Cause Related Marketing was back in 1887, when the Royal National Lifeboat Institution received a gift of a Sunlight Number 1 lifeboat from the proceeds of a Sunlight Soap Competition in the UK. However, the term was not coined until the American’s began to use it as an experimental marketing strategy a century later. When American Express launched a campaign to raise funds for the restoration of the Statue of Liberty, donating money to the cause each time a customer used their charge card, modern day CRM was born. The term ‘Cause Related Marketing’ was actually coined during a 1983 campaign by American Express. In that campaign, every time an American Express Card was used anywhere by anyone, the company donated one cent to the Statue of Liberty Restoration Project. It is worth noting that during that campaign, American Express saw a 17% increase in new users and a 28% increase in card use. CAUSE RELATED MARKETING IS A PART OF SOCIETAL MARKETING SPECTRUM There are different marketing strategies available for companies who want to appeal to the increasingly socially responsible consumer and meet business objectives at the same time. The graphic below illustrates roughly where to place the different marketing strategies in the overall context of commercial selling, goodwill and social responsibility.
  4. 4. The three marketing strategies - Cause Related Marketing, Social Marketing and Sponsorship - are different forms of so-called ‘social responsible marketing’, or societal marketing, because they all consider gaining profit, satisfying the consumer and helping society to be of equal value. “Societal marketing is a principle of enlightened marketing which holds that a company should make marketing decisions by considering customers’ requirements, the company’s objectives, consumers’ long-term interests and society’s long-term interests” WHAT ARE THE ADVANTAGES OF CAUSE RELATED MARKETING? 1. Cause-related marketing can directly enhance sponsor sales and brand. 2. Cause-related marketing is respected and accepted business practice. 3. Cause-related marketing can heighten customer loyalty. 4. Cause-related marketing can boost a company's public image and helps distinguish it from the competition. I would add that it can also give corporate PR officers a new story to tell. 5. Cause-related marketing can help build employee morale and loyalty. 6. Cause-related marketing can improve employee productivity, skills and teamwork. WHAT ARE THE DISADVANTAGES OF CAUSE-RELATED MARKETING? There is always the possibility that one of the entities involved (nonprofit or corporation) will do something that hurts its reputation. In that case, the other party may be perceived negatively as well. For that reason, corporations and nonprofits should choose their partners wisely. A company with a very good reputation in the market can be at a disadvantage by associating itself with a non profit organization which does any unethical or controversial activity. So, instead of promoting the products and increasing the brand affinity, the people will start doubting the intentions of the company. At the same time, care should be taken such that the people should not feel that tying up with a charity is just a marketing tool to increase the
  5. 5. product sale. The companies face the challenge of convincing the people their good intentions behind getting involved in charitable activities. Any kind of negative publicity is also detrimental for the interests of the non-profit organizations as their existence directly depends on the faith which people have in them. Creating such an organization requires hard work, consistency of several years and a deep feeling of philanthropy. However, the reputation can be disturbed in a single day if any practices of corruption or misuse are found out. In addition there has been considerable concern about nonprofits lending their good names to for-profit activities. Does it weaken the trustworthiness of a nonprofit? Does it blur the lines between business and philanthropy? Could a nonprofit "sell out" by lending its support to products that are less than benign for the public? Today, there is also a potential problem given that there are so many cause-related marketing programs. FEW EXAMPLES OF CAUSE RELATED MARKETING UNITED COLORS OF BENETTON These controversial photographs were released by UCB against torture of prisoners and racial discrimination. These photographs were not released to increase the sales. From the handcuff picture, we cannot come to conclusion which one is the cop and which one is the thief. UCB wanted people to think on these issues. They claimed that these were released to make people realize the burning issues in the society.
  6. 6. SOCIAL ACTIVISTS AGAINST BOTTLED WATER IN USOFA Here is the example of CRM, which campaigns against bottled water. The various bad effects of bottled water are 2.5 million tons of carbon dioxide was generated last year due to bottled water manufacturing. Manufacturing bottled water in America uses 17 million barrels of crude oil every year. BASKIN-ROBIN FOR FEEDING THE POOR Baskin-Robbins is incentivizing consumers to try its new Iced Cappy Blast™ beverage by linking its purchase to a donation to Feeding America. Additionally, for every new “Like” received on its Facebook page during the month- long campaign to help fight hunger, another meal donation will be made to the charity, up to a total of one million meals
  7. 7. DAWN DISH WASH TO SAVE WILDLIFE This ad represents a portion of revenue directed towards wildlife saving, on purchase of the dish wash. The above mentioned are the examples of cause related to marketing. In the present ERA the cause related marketing are oriented towards social activities. The corporates relate themselves as socially responsible. Hence, by this both the company becomes profitable and also the society gets benefits. REFERENCE 1., 2. 3.