Cause Marketing
Image borrowed from econpreneurist.com
The phrase "cause-related marketing" was first used by American Express in 1983 to describe its campaign to raise money for the restoration of the Statue of Liberty.
American Express made a one-cent donation to the Statue of Liberty every time someone used its charge card; the number of new cardholders soon grew by 45%, and card usage increased by 28%.
In 1997, Coca-Cola donated 15 cents to Mothers Against Drunk Driving for every case of Coca-Cola bought during a 6-week promotion in more than 400 Wal-Mart stores. Coke sales in these stores increased 490% during the promotion. The trend to link causes to merchandise gained momentum in 2004 with the $1 LIVESTRONG bracelet, the sale of which benefited the Lance Armstrong Foundation, which focuses on a cure for cancer.
A year later, the (Product) Red campaign by U2 frontman Bono and his wife, began in Britain and has since linked with several major retailers from Starbucks to Gap in an effort to raise money for Aids prevention and treatment in Africa, through a self-sustaining business model.
Many businesses currently partake in cause marketing campaigns through partnerships with organizations such as the Susan G. Komen Breast Cancer Foundation, Toys for Tots and (Product) Red. Additionally, corporations across the country and around the world have Corporate Social Responsibility (CSR) divisions that focus some of the corporation's resources on benefitting the greater good.
According to retail executives, consumers are putting more value on corporate citizenship, partially due to a series of high-profile business scandals. According to a 2007 survey of 1000 adults conducted by Cone Inc., over 66% of Americans consider a company's business practices when deciding what to buy, 92% stated they have a more positive image of a company that supports a cause they care about and 87% are likely to switch from one brand to another if quality and pricing is the same, but the other brand is associated with a good cause. Even niche markets, such as the nation's college students, now show a striking preference for brands they believe to be socially responsible. According to a newly released College Explorer study from Alloy Media, nearly 95 percent of students say they are less likely to ignore an ad that promotes a brand's partnership with a cause.
Just days after Bath and Body Works made a $16.50 candle with ten percent of each sale going to the Elton John AIDS Foundation available on their website, the company received over 85,000 orders for the candle. Philanthropy has become a competitive advantage in a weak retail environment. In tough economic times, consumers are even more concerned about where they are spending their discretionary income, and giving consumers the opportunity to do good along with a purchase makes them feel less self-indulgent. As a result, retail executives and philanthropy experts have agreed that "charity is no longer an option, it is a requirement for stores". "It is a cost of doing business today," said John Morris, a stock analyst at Wachovia Securities who tracks retailers. Retail executives of corporations such as Wal-Mart and Toys R Us who collected millions for charities such as the Salvation Army and Toys for Tots in 2005 said the money was a priceless investment for their reputation.
Consumers support cause marketing and businesses benefit from it. Retailers support for causes such as AIDS treatment and Breast Cancer Research has helped to bring these causes to the conscience of consumers. With knowledge that support for this type of collaboration between business and social causes exists, we hope to bring the global water crisis to the forefront of charitable issues. We will target not only retailers who can attach our cause to products, but other businesses such as hotels, restaurants and concert arenas who can attach our cause to their events.
If consumers and sellers of products are in support of cause marketing, then there is reason to believe cause marketing would be just as appealing to consumers and sellers of services.
ADFT will not only create collaborations with retailers but also plans to penetrate the service market, which could equally benefit from cause marketing.
To learn more about cause marketing, check out these articles:
- How To Use Cause Marketing Without Causing Chaos
- Cause Marketing Can Result In Sales Lift
- 72% Of Consumers Have Made Purchase Based On Cause Marketing
"After decades of treating charity as an afterthought and using cheap trinkets as an incentive for shoppers to give retailers across the country are putting philanthropy at the center of their product lines, whether it is clothes, books or shoes. In the process, executives say, stores are transforming charity from a crush of donation requests every season into a sustainable, year-round business model,"
writes Michael Barbero in his 2006 article "Candles, Jeans,
Lipsticks: Products with Ulterior Motives".
