Cause-Marketing: Companies Look beyond the Bottom Line

By Shelley Donald Coolidge, writer of The Christian Science Monitor | The Christian Science Monitor, March 7, 1994 | Go to article overview

Cause-Marketing: Companies Look beyond the Bottom Line


Shelley Donald Coolidge, writer of The Christian Science Monitor, The Christian Science Monitor


AMERICAN companies - from automakers to fashion designers - are using a unique kind of advertising to stand out from the crowd and increase customer loyalty.

New York-based menswear maker Members Only, for example, designates its entire marketing budget to national antidrug and pro-vote campaigns, says Ed Wachtel, the company's president and chief executive officer.

More and more, companies are linking their names to a social charity or cause - a strategy the marketing industry calls cause-related marketing (CRM). For the past nine years, Members Only has spent all of its marketing dollars on cause-related programs - totaling between $30 million and $35 million, Mr. Wachtel says. At the same time, sales have continued to increase.

"Could we have grown more if we'd shown strictly fashion?" Wachtel asks. "There's no way of ever knowing. But I truly believe the American consumer recognizes our name and thinks of us as a `good guy,' " he says.

"{Cause marketing} doesn't preclude standard brand advertising," says Daniel Pearlman, president of The Pearlman Group, a Los Angeles-based marketing company. "What it does is it adds value to the brand and ... improves consideration for that brand."

In 1989, Mr. Pearlman helped Chrysler's Geo develop the "Geo Tree Program," where the company plants a tree for every car it sells. The program is worth about $400 to $500 in consumers' minds, Pearlman says. In other words, if a consumer is looking at a similar model car at a comparable price, the Geo Tree Program counts as a credit, he says.

CRM is winning favor among consumers, according to a recent survey by Boston-based Cone Communications and Roper Starch Worldwide Inc., a marketing research firm in New York. Of the 2,000 adults surveyed, more than six out of 10 say - price and quality being equal - they would switch brands to buy a product supporting a cause they care about. "The No. 1 thing that came out of our survey was that Americans are saying that business has a fundamental responsibility, alongside government and religious institutions and nonprofits, to help solve social problems," says Carl Cone, chief executive of Cone Communications.

Consumers gave high marks to McDonald's Corporation, Anheuser-Busch Companies Inc. …

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