Sales effects of social causes
Cause-Related Marketing was born in the 1980s as governments lowered their social commitment and large corporations became more socially conscious
In Cause-Related Marketing (CRM) a corporation partners with a non-profit organization. Typically, part of the receipts from product or service sales are donated to the non-profit organization. Both parties benefit: the non-profit gets additional funding and the company gains brand visibility and improved brand image. In crowded markets where traditional marketing campaigns can fail to garner attention, Cause-Related Marketing is a way to stand out.
American Express was the corporation behind this marketing technique. It partnered with the Statue of Liberty-Ellis Island Foundation during the time the Statue of Liberty was being restored for the American bicentennial. The campaign generated $1.7 million for the foundation and contributed to increases in card membership of 45% and card usage of 28%.
Several global brands followed in American Express’ footsteps. Dollar-Rent-A-Car partnered with Special Olympics; for every case bought, Coca-Cola donated a few cents to Mothers Against Drunk drivers; Briggs and Stratton, a lawnmower manufacturer, joined forces with the National Wildlife Federation by encouraging the public to cut pollution emissions through lawn mower maintenance.
Other examples include M.A.C. Cosmetics which donated 100 per cent of its sales from $14 and $16 lipsticks to various AIDS charities and raised $100 million. Jones Apparel group raised $1.5 million to be split amongst various non-profit organizations for education - this led to higher employee retention for them as most workers deemed children’s causes to be most important.
Most often, CRM is used with well established brands. Once more traditional marketing methods have anchored the brand, CRM is introduced to update the image at a time when the older methods may be wearing out. There are, however, counter-examples. Mecca Cola, a Dubai-based soft drink brand, announced during its product launch stage that 10% of the profit of every Mecca-Cola bottle would go to a Palestinian children’s fund. Within 2 months of the launch, the company had sold 2 million bottles with orders for a further 16 million bottles.
While Indian companies have been funding charitable activities for a very long time, it is really only in this century that the advantages of CRM have dawned on them. One of the first successful campaigns involved the giant Hindustan Unilever Limited (HUL) and its Lifebuoy soap brand. HUL partnered with SOS Children’s Village to develop their rural health education scheme. The initiative reached 80 million people in 30,000 villages across India and no doubt contributed to 20% sales growth in 2003-2004.
Other recent Indian examples include Oberoi Hotels which designed envelopes to help their guests contribute towards Child Relief and You (CRY) which collected about $15,000 (INR 6.50 lakhs) in little over a year. Procter and Gamble joined forces with the Blind Relief society and donated INR 1 for every pack of Whisper, a sanitary napkin, sold. Another member of the Tata Group, Voltas, which sells air conditioners has partnered with The Energy and Resources Institute (TERI) to bring light to those Indian villages that do not have access to electricity. Given the size of the country and the scope of some of its social problems, it would appear that CRM has a future in India.
