Good Causes Deliver for Brands: Do Companies Gain from Being Socially Responsible? Tania Mason Reports on How Cause-Related Marketing Impacts the Bottom Line. (Analysis)
Mason, Tania, Marketing
So Christmas is over, and with it the season of giving and goodwill. January is the time for most people to get back to their daily grind of making as much money as possible for the company that employs them.
It sounds callous, but let's face it, that is the reality for most workers. Unless you are a social worker or charity employee, there aren't too many opportunities to make a real difference in the world.
Except, that is, if you are in marketing. Those whose job it is to find innovative new ways of attracting consumers to a product are in the unique position of being able to both boost the bottom line and make a positive impact on society.
Those brands that already incorporate cause-related marketing in their marketing mix, such as Tesco, Walkers, British Gas and Avon, will be aware of the brand-building and financial benefits of tying up with a charity or cause. The primary reason cited by those who haven't yet embraced it, according to Cohn Buckingham, chairman and chief executive of Research International, is that" there is no clear business argument".
But new research by marketing services company dunnhumby demolishes this excuse. By analysing the sales impact of three cause-related marketing programmes using the Tesco Clubcard database, dunnhumby reinforces the view of Walkers president Martin Glenn that "shareholders, as well as the community, win".
Raising market share
The first scheme, a partnership between Unilever brand Persil and Comic Relief, set out to "emotionally engage consumers, enhance brand image, and increase sales". A donation was made to Comic Relief from every special edition pack of Persil sold, the amount depending on the pack size.
Lever Faberge also produced information packs and raised awareness through national TV, press and poster ads. More than [pounds sterling]300,000 was raised for Comic Relief in six weeks, and Persil was able to grab back the market share it had lost owing to a rival's heavily discounted price promotion.
Manor Bakeries cake brand Mr Kipling relaunched itself as "more fun and contemporary" with a scheme that donated 5p from the sale of each 'Red Nose' Cherry Bakewells pack for the six weeks of the campaign. Sales rocketed by 450% during the promotion and stayed up by 40% for about 12 weeks after the campaign. A [pounds sterling]320,000 donation to the fund exceeded expectations by [pounds sterling]70,000.
And in the tenth year of Tesco's Computers for Schools scheme, 538,000 out of nine million shoppers showed "substantial increase in spend" during the programme.
Clive Humby, chairman of dunnhumby, says all the programmes achieved similar or better results than discounted price or '20% extra' promotions. And just in case marketers are worried about impacting traditional ways of giving to charity, he adds that the research shows that cause-related marketing initiatives reach audiences that don't traditionally give to charities.
Many believe that the attacks of September 11 have made us all question what is important, and have highlighted the interdependence of business and society. Corporate social responsibility is not another 'fashionable' business issue that will fizzle out in a few months or years, but is essential to the future business practice.
As Vernon Ellis, international chairman of Accenture, said at The New Statesman lecture in London in July: "Global business is not something apart from society: its health and even its long-term survival depend on the global environment in which it operates. Most analysts now believe that the end of the world would have a very depressing effect on company profits."
There is no shortage of consumer research to press the point home. Business in the Community (BitC) findings show that, where pricing is equal, more than 80% of Western consumers would change brands and have a better perception of a company that does something to make the world a better place.
Recent polls by MORI reveal that 71% of people in the UK believe industry and commerce don't pay enough attention to their social responsibilities, while 67% want to see more businesses engaging in cause-related partnerships.
There are signs too that top-level business people are waking up to this. In Corporate Survey II, a BitC report based on research among almost 400 business leaders, 70% of chief executives say that corporate social responsibility is essential to their business. Some 89% of marketing directors believe that businesses should be involved in addressing social issues, compared with 81% in 1998. And two-thirds of all respondents predict that cause-related marketing will increase in importance over the next two to three years.
Sue Adkins, director of BitC's Cause Related Marketing Campaign, says a link with a charity or cause is the easiest and best way for a business to demonstrate its corporate social responsibility. But more than that, says Tesco marketing director Tim Mason, who chairs the campaign, it makes good business sense. "It is not good old-fashioned corporate giving. It is accessing new money that can be used by causes."
He adds: "It is said that one in ten people is a corporate social responsibility activist. If that is right then all of us should have it as part of our agenda because it is too big a part of the market to ignore."
Through its Toddler Club tie-up with I-CAN, the charity for children with speech and language difficulties, Tesco has pledged to raise [pounds]125,000 toward I-CAN's goal of [pounds sterling]2m to set up 20 early-years centres offering education and therapy to toddlers and their families. In light of Tesco's [pounds sterling]lbn profit last year, this may seem a little tight-fisted, but I-CAN is thrilled with the deal.
"We are grateful to Tesco," insists Gill Edelman, I-CAN's chief executive. Tesco's Baby and Toddler Club has 550,000 members and more than five million parents with kids under five visit Tesco stores each day. "The value of generating awareness is just as important to us as the funds raised."
If there is any risk in going down the cause-related marketing route, it is that initiatives can be seen to be cynical if they are not done well. Those who have done it successfully say it is imperative that the chosen cause is a good fit with the brand. Walkers' Glenn says its Free Books for Schools scheme works because "Walkers would do that". "It's a bit brash. If you are a down-to-earth brand like Walkers and you adopt a pious tone, it jars."
And then there is the inevitable criticism from consumer groups that brands, even though they are doing something, are still not doing enough.
The Which? Report released last month, which investigated both the Tesco Computers for Schools and the Walkers schemes, says, in a nutshell, that the brands benefit substantially more than the causes they claim to champion.
Given Tesco's and Walkers' vast profits, this may be a valid point. But as Mason points out, "the involvement of commercial companies is the reason we can talk in a scale of millions, not thousands". In the ten or so years that Walkers' and Tesco's schemes have been operating, more than [pounds sterling] 100m has been raised for schools.
Marketers are already acutely aware of their impact on the financial health of their employer companies. Perhaps January might not seem so bleak once they wake up to their potential to boost the bottom line by influencing the health of society too.
RELATED ARTICLE. WALKERS TIPS
Walkers president Martin Glenn's
* Keep it simple
* Do it big
* Believe in it
* Make it work throughout the whole organisation
* Make it a significant offering
* Communicate it brilliantly, modestly and without brand posture
* Deliver all your promises
* Do it with passion
* Try to get everything
* Make it pay back…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Good Causes Deliver for Brands: Do Companies Gain from Being Socially Responsible? Tania Mason Reports on How Cause-Related Marketing Impacts the Bottom Line. (Analysis). Contributors: Mason, Tania - Author. Magazine title: Marketing. Publication date: January 4, 2002. Page number: 11. © 2003 Haymarket Business Publications Ltd. COPYRIGHT 2002 Gale Group.
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