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- 1. 1 “Blues and Business”: A profile of the Mahindra Blues Festival audience Nelson Mendoza March 2014 Introduction The Mahindra Group has a tradition of supporting arts initiatives, including the Mahindra Blues Festival, a blues music festival in Mumbai. Although Mahindra backs these initiatives because the company believes they are inherently good for society, recent research on corporate philanthropy reveals that arts and social initiatives like these can actually create business value for those companies that support the arts. I set out, through a survey, to profile the Mahindra Blues Festival audience and understand if the audience develops positive perceptions about companies that support the arts, and whether the audience believes that Mahindra’s giving would influence their purchasing decisions. These are important questions because corporate-‐philanthropy research shows that support for the arts and for other social initiatives benefits companies via the positive impact on those companies’ reputation. Though I cannot establish here that Mahindra’s sales benefit from Mahindra’s arts giving, I do establish that the Mahindra Blues Festival audience’s views of a company’s reputation are shaped by that company’s backing of the arts. We can therefore suggest that the Mahindra Group likely gains business value from its arts giving. Background Several studies have found that corporate giving to the arts and other social initiatives can increase a company’s revenues by influencing consumer behaviors, such as customer loyalty and recommendations. 1 Giving can also help protect a company’s share price 2 and revenues from a negative event and the subsequent negative publicity. 3, 4, 5 Support for the arts might even create positive press: Humana, the American health-‐insurance company, sponsors a five-‐week theatre festival in the U.S., from which 3 plays have gone on to win Pulitzers and which generates media buzz in which the festival and the Humana name are mentioned. 6, 7 In all these studies, giving to the arts or to broader social initiatives benefits the company by creating a positive reputation and positive perceptions about 1 Lev, Baruch and Petrovits, Christine and Radhakrishnan , Suresh, “Is Doing Good Good for You? How Corporate Charitable Contributions Enhance Growth”. 2 Lim, Terence, “Measuring the Value of Corporate Philanthropy: Social Impact, Business Benefits and Investor Returns”. 3 Godfrey, Paul C., “The Relationship between Corporate Philanthropy and Shareholder Wealth: A Risk Management Perspective” 4 Lev, Baruch and Petrovits, Christine and Radhakrishnan , Suresh, “Is Doing Good Good for You? How Corporate Charitable Contributions Enhance Revenue Growth.” 5 Wang, Heli and Cuili Qian, “Corporate Philanthropy and Corporate Financial Performance: The Roles of Stakeholder Response and Political Access”. 6 “Actors Theater of Louisville Humana Festival of New American Plays,” Humana Foundation. 7 Kramer, Elizabeth, “Humana Festival of New American Plays: By the numbers.”
- 2. 2 the company in stakeholders’ eyes. In order to reap those advantages, therefore, corporate philanthropy must create positive perceptions about the company overall. Many businesses have caught on to this strategy: over 41% of the 600 companies surveyed by the Business Committee for the Arts, an American council that promotes the intersection of business and the arts, gave money to or led their own arts initiatives. 8 Additionally, over 47% of companies with revenues of $50 million or more gave to the arts, 9 suggesting that all types of companies detect the benefits. In fact, only 12% of executives or representatives of the companies surveyed said that supporting the arts “does not suit business interests/ is not a priority.” 10 There is a growing trend for arts giving in India as well. For example, the Tata group of companies helped found Mumbai’s National Centre for Performing Arts as far back as 1966, in order to promote and preserve the arts in India. 11 More recently, India’s YES Bank sponsored New Delhi’s huge India Art Fair 2014, and ZEE TV supported the Jaipur Literature Festival (For more information about the arts abroad and in India, see Appendix 2). Clearly, businesses across the world of all shapes and sizes seem to have established, or are convinced, that giving benefits their business. Objective 1) To determine if the Mahindra Blues Festival audience has positive perceptions about companies that support the arts. 2) To determine if the Mahindra Blues Festival audience believes Mahindra’s support for the arts would influence their purchasing decisions. Methodology To determine if a company’s support for the arts influences the Mahindra Blues Festival audience’s perceptions of a company, we conducted a three-‐question survey (Appendix 1) in two locations: 1) The Mahindra Blues Festival. 15-‐16 February, 2014. Mumbai. 2) The Mahindra Blues Festival Facebook page. The survey asked customers to state, on a scale of 1-‐7, how strongly they agreed or disagreed with 3 statements (1=Strongly Disagree; 7=Strongly Agree). The first two statements (Q1 and Q2) tried to determine if a company’s support for the arts would create positive perceptions about that company. In Q1, if an audience member agreed that companies should support the arts, then indirectly we assumed that a company that supports the arts meets that expectation, and thus creates a positive perception. In Q2, we directly asked if a company’s support for the arts creates a positive perception. In Q3, we asked if an audience member will consider Mahindra’s support for the arts specifically when making a purchase in the future. A positive response supports previous research that corporate philanthropy can influence a company’s sales, whether positively or negatively. However, our survey did not determine the type of impact; that is a question for future study. At Mahindra Blues Festival, a surveyor had a table during the festival’s two days, and offered passerby the chance to enter a contest to meet the festival’s artists backstage by taking the paper survey. On the 8 “The BCA National Survey of Business Support for the Arts,” Business Committee for the Arts. 9 Ibid. 10 Ibid. 11 “TATA Group: Our Commitment: Sports and Arts,” TATA.
- 3. 3 Mahindra Blues Festival Facebook page, people who took the survey by clicking a link on a Facebook post were offered the chance to win one of 5 Mahindra Blues Festival merchandise packages. The survey was available for 7 days, and paper and online surveys were identical. Note: Although in the online survey there was a chance for people who did not attend the 2014 festival, or who perhaps had never attended any of the previous festivals, to take the survey, the number of people who had never attended any festival was only 17, less than 10% of the total sample size of 280, so we do not feel like we have to isolate them from our results because of their small numbers. Results: Total sample size: 280 surveys Questions: Q1 I believe it is important for companies to financially support the arts. Q2 I have positive thoughts about companies when they support the arts. Q3 I will consider Mahindra’s support for the arts (Mahindra Blues Festival, Excellence in Theater Awards, etc.) when making purchases in the future. 1 = Strongly disagree 2 = Disagree 3 = Somewhat disagree 4 = Neutral 5 = Somewhat agree 6 = Agree 7 = Strongly agree Average Answer Q1 and Q2 received a high average answer (6.46 and 6.29, respectively). Therefore, the Mahindra Blues Festival audience believes strongly that companies should support the arts, and the audience has good thoughts about those companies; therefore, the audience’s perception of a company is positively enhanced if that company supports the arts. Q3 has a high average answer (5.94) meaning that the Mahindra Blues Festival audience agrees that Mahindra’s support for the arts will influence its purchasing decisions. However, the audience agrees less strongly with this statement than with Q1 and Q2 (6.46, 6.29).
- 4. 4 Average Answer Middle-‐aged people agree most strongly that companies should support the arts (6.6). Young people (6.3) feel less strongly than the middle-‐aged group, but still agree. Average Answer Middle-‐aged people also agree most strongly that they have positive thoughts about companies that support the arts. Young people agree with the statement (6.19), but feel least strongly of all the age groups.
- 5. 5 Average Answer Middle-‐aged people feel most strongly of all age groups that Mahindra’s support for the arts will influence their purchasing decisions (6.28). Young people agree (5.76), but dramatically less than middle-‐aged people. The difference of .52 is, notably, the largest difference in answers between all age groups and genders. Average Answer
- 6. 6 Average Answer Both females and males agree strongly that companies should support the arts (6.62 and 6.42, respectively) and both agree strongly that they would have positive perceptions about those companies (6.36 and 6.29, respectively). However, females feel slightly more strongly about both statements. Average Answer Males believe slightly more strongly than females that support for the arts would influence their purchasing decisions (5.96 vs. 5.88).
- 7. 7 Conclusion Based on our results, we conclude that the Mahindra Blues Festival audience will develop positive perceptions of companies that support the arts, and that Mahindra’s support for the arts will influence their purchasing decisions. On Q1, the audience expressed the expectation that companies should support the arts; therefore, companies that do, win the approval of the audience. In Q2, the audience very clearly agreed that they have positive thoughts about those companies. We can therefore infer that the Mahindra Blues Festival audience most likely develops positive perceptions about the Mahindra Group itself, since Mahindra supports the arts. Additionally, though we cannot confirm this with our survey, it is likely that Mahindra’s arts initiatives activate the benefits of corporate giving, via an enhanced corporate reputation, as discussed in our introduction (i.e. higher revenues, insurance against loss in share price, etc.). We discuss a few interesting results: 1) The audience agreed least with Q3: I will consider Mahindra’s support for the arts (Mahindra Blues Festival, Excellence in Theater Awards, etc.) when making purchases in the future. Unfortunately, it is not clear if the agreement was lowest because it mentioned Mahindra specifically, or because people are generally skeptical that corporate giving would influence their buying behavior. However, even if the audience does not believe Mahindra’s giving would influence their purchasing, the positive reputation and brand positioning created by the arts initiatives might indirectly or subtly factor into their decisions, as suggested by the background research we discussed. We must follow up on this with further study, perhaps by tracking purchases made by people who participate in or know about Mahindra’s arts initiatives. Of course, perhaps people who view the Mahindra brand favorably already, or who often buy Mahindra products, are probably more likely to engage with the arts initiatives, so it is important to control for that factor in studies that track purchasing decisions. 2) Middle-‐aged people agreed most strongly out of the three age groups with all statements. Youth agreed least. We can only speculate about these differences: perhaps youth know less about Mahindra products because most Mahindra products are geared towards an older crowd with more purchasing power (auto, tractors, real estate, etc.). However, youth may also be more skeptical of companies’ intentions behind corporate giving. Perhaps the Mahindra Group should consider this implication when deciding which arts initiatives to support (i.e., focusing on arts initiatives for an older audience), or which products to promote at these events. The Skoda Prize, a large monetary award for young artists sponsored by the Skoda auto company, is a cautionary tale; many artists publicly resisted and were opposed to a company promoting its name by supporting an art prize. 12 Skoda decided to discontinue its sponsorship in 2013. 3) Men agreed slightly more than women that support for the arts would influence their purchasing decisions. Although the difference was slight, we should conduct further studies to determine which demographics the Mahindra Blues Festival, or Mahindra’s other arts initiatives, should target. Some people may claim sample bias in our survey, and therefore question our results, because all of our audience participated in or was interested in the festival in some way. The audience’s participation would suggest that it could not possibly be opposed to corporate support for the arts. However, the most important question for us was whether arts initiatives influence participants’ perceptions of the 12 Kramer, Elizabeth, “Name dropping”.
- 8. 8 companies that support those initiatives. We cannot clearly determine that simply by looking at whether people attended the festival or not, and therefore, we needed to conduct the survey. Additionally, we decided not to ask the audience in Q1 and Q2 if they believed Mahindra, specifically, should support the arts, or if Mahindra’s support for the arts influenced their perceptions of the company (instead, we asked about companies in general). Although asking a more general question limited our conclusions (we cannot decisively say whether the audience develops positive perceptions about Mahindra based on the Mahindra Blues Festival), this was a deliberate decision; we do not wish to make our audience skeptical about the blues festival’s intentions by asking such specific questions. Also, asking the questions in such a way would not have been in the style of our other communications with the blues festival audience. Therefore, we must be satisfied with hypothesizing that because our audience develops positive perceptions about companies in general that support the arts, they most likely now think positively about Mahindra’s reputation. Although many questions remain, we established quite firmly with this survey that for the Mahindra Blues Festival audience, corporate support for the arts creates a positive reputation for a company. By extension, this may mean that Mahindra’s reputation benefits from its arts initiatives, and that probably its sales, share price, customer loyalty, and other business measures may benefit as well. We also established that, overall, the audience believes that Mahindra’s support for the arts would influence their purchasing decisions. In further studies, we should determine, by tracking their purchases, whether this influence is positive or negative. However, this survey suggests that the Mahindra Group is not only creating social good with its support for the arts, but is enhancing and protecting its reputation. Stage at Mahindra Blues Festival 2014
- 9. 9 References “Actors Theater of Louisville Humana Festival of New American Plays,” accessed February 11, 2014, http://www.humanafoundation.org/partnerships/actors_theatre.asp. “The BCA National Survey of Business Support for the Arts,” Business Committee for the Arts, accessed February 20, 2014, http://www.partnershipmovement.org/upload/web-‐ files/BCA_Survey_V6_Single.pdf. Ghose, Anindita, “Name dropping,” The Caravan, August 01, 2013, accessed February 28, 2014, http://caravanmagazine.in/perspectives/name-‐dropping. Godfrey, Paul C., “The Relationship between Corporate Philanthropy and Shareholder Wealth: A Risk Management Perspective,” The Academy of Management Review, 30.4 (2005): 777-‐798, accessed February 12, 2014, http://www.jstor.org/stable/20159168. Kramer, Elizabeth, “Humana Festival of New American Plays: By the numbers,” The Courier Journal, February 23, 2014, accessed February 28, 2014, http://www.courier-‐ journal.com/story/entertainment/arts/2014/02/23/humana-‐festival-‐of-‐new-‐american-‐plays-‐by-‐the-‐ numbers/5683863/. Lev, Baruch and Petrovits, Christine and Radhakrishnan , Suresh, “Is Doing Good Good for You? How Corporate Charitable Contributions Enhance Revenue Growth,” (September 1, 2008). Available at SSRN: http://ssrn.com/abstract=920502 Lim, Terence, “Measuring the Value of Corporate Philanthropy: Social Impact, Business Benefits and Investor Returns” (February 22, 2010). Available at SSRN: http://ssrn.com/abstract=1571910 or http://dx.doi.org/10.2139/ssrn.1571910 “TATA Group: Our Commitment: Sports and Arts,” TATA, accessed March 15, 2014, http://www.tata.in/ourcommitment/articlesinside/A-‐homage-‐to-‐heritage. Wang, Heli and Cuili Qian, “Corporate Philanthropy and Corporate Financial Performance: The Roles of Stakeholder Response and Political Access,” The Academy of Management Journal, 54.6 (2011): 1159-‐ 1181, accessed February 12, 2014, doi: 10.5465/amj.2009.0548.
- 10. 10 Appendix 1 Mahindra Blues 2014 Survey *Answers DO NOT affect chances of winning Please your answer: Age: under 30 31-‐50 51+ Gender: F M Do you live in India? Y N What years have you attended the Mahindra Blues Festival? 2014 2013 2012 2011 On a scale of 1-‐7, how strongly do you agree or disagree with the following statements. 1 = Strongly disagree 2 = Disagree 3 = Somewhat disagree 4 = Neutral 5 = Somewhat agree 6 = Agree 7 = Strongly agree I believe it is important for companies to financially support the arts. 1 2 3 4 5 6 7 I have positive thoughts about companies when they support the arts. 1 2 3 4 5 6 7 I will consider Mahindra’s support for the arts (Mahindra Blues Festival, Excellence in Theater Awards, etc.) when making purchases in the future. 1 2 3 4 5 6 7 Please write your answer: What activities or ideas do you suggest for improving Mahindra Blues Festival, our social media, etc.? Optional: Please enter your name if you wish to be entered for gift drawing. circle
- 11. 11 Appendix 2 Additional information about corporate arts initiatives around the world. The Humana Festival of New American Plays, USA 13 The Humana Festival of New American Plays is a 5-‐week theater festival in Louisville, Kentucky that produces and showcases about 6 plays every year. The festival is sponsored by The Humana Foundation, the philanthropic arm of Humana, a Louisville-‐based health-‐insurance company. The festival intends to create opportunities for rising American playwrights, and nourish contemporary American theater. Though the festival does not award prizes, many of the plays shown at the Humana Festival have won other prestigious awards: 3 Humana Festival plays have won the Pulitzer Prize, 8 have won the Steinberg/ATCA Award for New Plays, which comes with a $25,000 award, and 8 plays have been adapted into film or TV shows. Such outcomes fulfill the festival’s objective of opening doors for new American plays. The festival has been a tremendous success. In 2013, over 33,000 patrons from over 44 American states and 8 countries attended the festival. Since 1980, Humana has given over $20.5 million to the festival in what is the longest continuous partnership between a company and a theater, the Actors Theater of Louisville, which organizes the festival. Though Humana has not released studies or figures that measure the business or social impact of this festival, international and national media outlets cover the event every year. This press likely boosts positive perceptions of Humana as a socially responsible company, which is an especially important value addition given the many negative associations with American health insurance companies. For all these reasons, it is no surprise that Human continues to sponsor the festival. JSW Foundation, India 14 The JSW Foundation, the philanthropic arm of the JSW steel and oil conglomerate, sponsors many arts initiatives. Perhaps the foundation’s largest project is Kaladham, a 10-‐acre “arts village” in Karnataka meant to become a center for the arts in India. The village has an outdoor theater pavilion for plays, dance performance spaces and studios, art galleries, and a museum, all places where overseas and local artists can work and exhibit their pieces. JSW Foundation especially intended for the space to help support local artists in order to keep local heritage alive. In addition to Kaladham, JSW Foundation also sponsors Art India magazine, one of India’s most prominent arts magazines, and has supported the restoration of the Krishna Temple in Hampi, and funds Rajasthani folk music workshops for schoolchildren in Rajasthan. Finally, JSW Foundation also published an English-‐language translation of Chilean Nobel laureate, Gabriella Mistral’s collection of poems. The JSW Foundation also has not released studies on the impact of their work, but may, like Humana, appreciate the positive press around the initiatives given the negative associations with the oil and steel industries. 13 “Actors Theater of Louisville Humana Festival of New American Plays,” accessed February 11, 2014, http://www.humanafoundation.org/partnerships/actors_theatre.asp 14 “JSW Foundation: Art, Culture, and Heritage,” accessed March 11, 2014, http://www.jsw.in/Foundation/inner_page.php?id=10&mid=2&