Cause marketing
Encyclopedia
Cause marketing or cause-related marketing refers to a type of marketing
involving the cooperative efforts of a "for profit" business and a non-profit organization
for mutual benefit. The term is sometimes used more broadly and generally to refer to any type of marketing effort for social and other charitable causes, including in-house marketing efforts by non-profit organizations. Cause marketing differs from corporate giving (philanthropy
) as the latter generally involves a specific donation that is tax deductible, while cause marketing is a marketing relationship not necessarily based on a donation.
. Marriott’s objective was to generate highly cost-effective public relations and media coverage for the opening of their 200 acre (0.809372 km²) family entertainment center, Marriott’s Great America in Santa Clara, CA. The March of Dimes's objective was to greatly increase fundraising while motivating the collection of pledges by the program’s deadline. The promotion was conducted simultaneously in 67 cities throughout the Western United States. It exceeded all goals to become the most successful promotion in the history of Chapters West of the March of Dimes, while providing hundreds of thousands of dollars in free publicity and stimulating the record-breaking opening of the Marriott entertainment complex.
The program was conceived and directed by Bruce Burtch, who went on to become a nationally-recognized catalyst for cause marketing programs. Burtch is credited with coining the phrase, "Do Well by Doing Good", which was his answer to the CEO of a major corporate foundation when asked what his goal in life was in 1977.
Another of the first examples of a "cause-related marketing" campaign was initiated in 1979 by Rosica, Mulhern & Associates for Famous Amos
cookies. In this campaign, Wally Amos
became the National Spokesperson for the Literacy Volunteers of America. According to the organization, Wally has alerted more people to the illiteracy problem than any other person in history. This strategic cause-marketing tie-in helped to tell the Famous Amos
Cookie story while maintaining visibility and is responsible for many new and expanded literacy programs. This case study is now used in university classrooms nationwide as an example of successful "cause-related marketing". In 1982 Nancy Brinker
, founder of Susan G. Komen for the Cure
was an early pioneer of cause marketing, allowing millions to participate in the fight against breast cancer through businesses that share Komen's commitment to end the disease.
Cause Related Marketing has been in existence for decades, indeed centuries, as the early Lever example indicates. The recent interest in Cause Related Marketing is generally argued to stem from American Express, who apparently coined the phrase in 1983. Following various pilot schemes in 1981, American Express
developed a campaign which donated funds to a number of different non-profit organizations as part of the San Francisco Arts Festival. Essentially every time someone used an American Express Card in the area, a 2 cent donation was triggered and each time new members applied for a card a larger contribution was made. The marketing goals that American Express had for this programme were apparently exceeded. Card usage was reported as having increased significantly and relationships between American Express and their merchants also improved as a result of the promotion. From the charity's point of view, despite being a short-term campaign, $108,000 was raised, making a significant contribution to their work. The terms "cause-related marketing" and "cause marketing" continued to grow in usage since that time. In more recent years the term has come to describe a wider variety of marketing initiatives based on the cooperative efforts of business and charitable causes.
Cause-related marketing is a powerful marketing tool that business and nonprofit organizations are increasingly leveraging. According to the Cone Millennial Cause Study in 2006, 89% of Americans (aged 13 to 25) would switch from one brand
to another brand of a comparable product (and price) if the latter brand was associated with "good cause". The same study also indicated that a significant percentage surveyed would prefer to work for a company that was considered socially responsible
. This can be linked to the increase in workplace giving programs. Earlier studies by Cone indicate an upward trend in the number of Americans who associate their own buying habits with cause marketing as well as an expectation that those companies to be "good corporate citizens". These studies also show a substantial increase from just before to just after the September 11, 2001 attacks
.
Numerous other studies have also been conducted to show that cause-related marketing has helped to increase a company's profits. For example, in the cause marketing campaign by American Express (to which the term "cause marketing" is attributed), the company saw a 17% increase in new users and a 28% increase in card usage.
, improved customer relations
, and additional marketing opportunities.
. (Sometimes referred to as integrated marketing
).
platforms. Companies have created programs to help sellers and corporations donate a percentage of their sales to a nonprofit orgranization through the use of auctions. Businesses and nonprofit organizations can also use the program for cause marketing and nonprofit fundraising programs.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
involving the cooperative efforts of a "for profit" business and a non-profit organization
Non-profit organization
Nonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...
for mutual benefit. The term is sometimes used more broadly and generally to refer to any type of marketing effort for social and other charitable causes, including in-house marketing efforts by non-profit organizations. Cause marketing differs from corporate giving (philanthropy
Philanthropy
Philanthropy etymologically means "the love of humanity"—love in the sense of caring for, nourishing, developing, or enhancing; humanity in the sense of "what it is to be human," or "human potential." In modern practical terms, it is "private initiatives for public good, focusing on quality of...
) as the latter generally involves a specific donation that is tax deductible, while cause marketing is a marketing relationship not necessarily based on a donation.
History
One of the first "cause marketing" campaigns occurred in 1976 through a partnership between the Marriott Corporation and the March of DimesMarch of Dimes
The March of Dimes Foundation is a United States nonprofit organization that works to improve the health of mothers and babies.-Organization:...
. Marriott’s objective was to generate highly cost-effective public relations and media coverage for the opening of their 200 acre (0.809372 km²) family entertainment center, Marriott’s Great America in Santa Clara, CA. The March of Dimes's objective was to greatly increase fundraising while motivating the collection of pledges by the program’s deadline. The promotion was conducted simultaneously in 67 cities throughout the Western United States. It exceeded all goals to become the most successful promotion in the history of Chapters West of the March of Dimes, while providing hundreds of thousands of dollars in free publicity and stimulating the record-breaking opening of the Marriott entertainment complex.
The program was conceived and directed by Bruce Burtch, who went on to become a nationally-recognized catalyst for cause marketing programs. Burtch is credited with coining the phrase, "Do Well by Doing Good", which was his answer to the CEO of a major corporate foundation when asked what his goal in life was in 1977.
Another of the first examples of a "cause-related marketing" campaign was initiated in 1979 by Rosica, Mulhern & Associates for Famous Amos
Famous Amos
-History:Wally Amos, an Air Force veteran who worked as a talent agent with the William Morris Agency, would send home-baked chocolate chip cookies to celebrities to entice them to meet with him and maybe sign a deal to be represented by the William Morris Agency...
cookies. In this campaign, Wally Amos
Wally Amos
Wallace "Wally" Amos, Jr. is an American actor and writer from Tallahassee, Florida. He is the founder of the "Famous Amos" chocolate chip cookie brand. He later co-founded Uncle Wally's muffins...
became the National Spokesperson for the Literacy Volunteers of America. According to the organization, Wally has alerted more people to the illiteracy problem than any other person in history. This strategic cause-marketing tie-in helped to tell the Famous Amos
Famous Amos
-History:Wally Amos, an Air Force veteran who worked as a talent agent with the William Morris Agency, would send home-baked chocolate chip cookies to celebrities to entice them to meet with him and maybe sign a deal to be represented by the William Morris Agency...
Cookie story while maintaining visibility and is responsible for many new and expanded literacy programs. This case study is now used in university classrooms nationwide as an example of successful "cause-related marketing". In 1982 Nancy Brinker
Nancy Brinker
Nancy Goodman Brinker is the founder and CEO of Susan G. Komen for the Cure, an organization named after her only sister, Susan, who died from breast cancer in 1980 at age 36. Brinker was also United States Ambassador to Hungary from 2001 to 2003 and Chief of Protocol of the United States from...
, founder of Susan G. Komen for the Cure
Susan G. Komen for the Cure
Susan G. Komen for the Cure, formerly known as The Susan G. Komen Breast Cancer Foundation, often referred to as simply Komen, is the most widely known, largest and best-funded breast cancer organization in the US....
was an early pioneer of cause marketing, allowing millions to participate in the fight against breast cancer through businesses that share Komen's commitment to end the disease.
Cause Related Marketing has been in existence for decades, indeed centuries, as the early Lever example indicates. The recent interest in Cause Related Marketing is generally argued to stem from American Express, who apparently coined the phrase in 1983. Following various pilot schemes in 1981, American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
developed a campaign which donated funds to a number of different non-profit organizations as part of the San Francisco Arts Festival. Essentially every time someone used an American Express Card in the area, a 2 cent donation was triggered and each time new members applied for a card a larger contribution was made. The marketing goals that American Express had for this programme were apparently exceeded. Card usage was reported as having increased significantly and relationships between American Express and their merchants also improved as a result of the promotion. From the charity's point of view, despite being a short-term campaign, $108,000 was raised, making a significant contribution to their work. The terms "cause-related marketing" and "cause marketing" continued to grow in usage since that time. In more recent years the term has come to describe a wider variety of marketing initiatives based on the cooperative efforts of business and charitable causes.
Background
According to a report published by onPhilanthropy, cause marketing sponsorship by American businesses is rising at a dramatic rate. Citing an IEG, Inc. study, $1.11 billion was spent in 2005, an estimated $1.34 billion will be spent in 2006, and the number is expected to rise further in 2007. As an update, IEG reported that $1.44 billion was spent in 2007 and $1.52 billion in 2008. Due to the recession, growth is expected to slow in 2009 with the projections being $1.57 billion total to be spent on cause marketing.Cause-related marketing is a powerful marketing tool that business and nonprofit organizations are increasingly leveraging. According to the Cone Millennial Cause Study in 2006, 89% of Americans (aged 13 to 25) would switch from one brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
to another brand of a comparable product (and price) if the latter brand was associated with "good cause". The same study also indicated that a significant percentage surveyed would prefer to work for a company that was considered socially responsible
Social responsibility
Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the...
. This can be linked to the increase in workplace giving programs. Earlier studies by Cone indicate an upward trend in the number of Americans who associate their own buying habits with cause marketing as well as an expectation that those companies to be "good corporate citizens". These studies also show a substantial increase from just before to just after the September 11, 2001 attacks
September 11, 2001 attacks
The September 11 attacks The September 11 attacks The September 11 attacks (also referred to as September 11, September 11th or 9/119/11 is pronounced "nine eleven". The slash is not part of the pronunciation...
.
Numerous other studies have also been conducted to show that cause-related marketing has helped to increase a company's profits. For example, in the cause marketing campaign by American Express (to which the term "cause marketing" is attributed), the company saw a 17% increase in new users and a 28% increase in card usage.
Benefits
The possible benefits of cause marketing for nonprofit organizations include an increased ability to promote the nonprofit organization's cause via the greater financial resources of a business, and an increased ability to reach possible supporters through a company's customer base. The possible benefits of cause marketing for business include positive public relationsPublic relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....
, improved customer relations
Customer relationship management
Customer relationship management is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing,...
, and additional marketing opportunities.
Overview
Although originally a marketing strategy that occurred offline, cause marketing has been conducted more and more through online channels in the last decade. This is due in part to the increasing percentage of households with internet connections. As with other types of marketing campaigns, companies can leverage online marketing channels along with other offline channels such as print and mediaMass media
Mass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...
. (Sometimes referred to as integrated marketing
Integrated Marketing Communications
Integrated Marketing Communications is defined as customer centric, data driven method of communicating with the customer. IMC is the coordination and integration of all marketing communication tools, avenues, functions and sources within a company into a seamless program that maximizes the impact...
).
Online charity auctions
In recent years, online auctions have been used in cause marketing strategies using a number of different online auctionOnline auction business model
The online auction business model is one in which participants bid for products and services over the Internet. The functionality of buying and selling in an auction format is made possible through auction software which regulates the various processes involved.Several types of online auctions are...
platforms. Companies have created programs to help sellers and corporations donate a percentage of their sales to a nonprofit orgranization through the use of auctions. Businesses and nonprofit organizations can also use the program for cause marketing and nonprofit fundraising programs.
Types
Cause marketing can take on many forms, including:- Product, service, or transaction specific
- Promotion of a common message
- Product licensing, endorsements, and certifications
- Local partnerships
- Employee service programs
Examples
- One example of cause-marketing would be the partnership of YoplaitYoplaitYoplait is a brand of yogurt produced by a company owned by two French holdings, SODIAAL and PAI Partners.-History:In 1964, 100,000 French farmers merged their regional dairy cooperatives to sell nationally. In 1965, two co-ops, "Yola" and "Coplait", merged, becoming "Yoplait"...
's "Save Lids to Save Lives" campaign in support of the Susan G. Komen for the CureSusan G. Komen for the CureSusan G. Komen for the Cure, formerly known as The Susan G. Komen Breast Cancer Foundation, often referred to as simply Komen, is the most widely known, largest and best-funded breast cancer organization in the US....
. The company packages specific products with a pink lid that consumers turn in, and in turn Yoplait donates 10 cents for each lid.
- An example of a nonprofit certification of a product (business) includes the American Heart AssociationAmerican Heart AssociationThe American Heart Association is a non-profit organization in the United States that fosters appropriate cardiac care in an effort to reduce disability and deaths caused by cardiovascular disease and stroke. It is headquartered in Dallas, Texas...
's stamp of approval on CheeriosCheeriosCheerios is a brand of breakfast cereal by General Mills introduced on May 1, 1941 as the first oat-based, ready-to-eat cold cereal. Originally named CheeriOats, the name was changed to Cheerios in 1945 because of a trade name dispute with Quaker Oats. The name fit the "O" shape of the cereal pieces...
, the popular breakfast cereal. The American Heart food certification program grants use of its "Heart Check" icon and name to dozens of cereals and juices meaning that that product meets the Associations' low-fat, low-cholesterol standards
- In 2007, Singapore Airlines launched a cause marketing campaign attracting over 35 million unique visitors across 23 countries to bring awareness to Doctors Without Borders. With the launch of the world's first A380, Singapore Airlines—with the assistance of Vonality Inc—launched an online auction for all seats on the historic first flight all in support of charity.
- Launched in early 2006, Product RedProduct RedProduct Red, styled as RED, is a brand licensed to partner companies such as Nike, American Express , Apple Inc., Starbucks, Converse, Bugaboo, Penguin Classics , Gap, Emporio Armani, Hallmark and Dell...
is an example of one the largest cause-related marketing campaigns to date given the number of companies and organizations involved as participants as well as its reach worldwide. It is also an example of a cause marketing campaign that is also a brand on its own. Product Red was created to support The Global Fund to Fight AIDS, Tuberculosis & MalariaThe Global Fund to Fight AIDS, Tuberculosis & MalariaThe Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing organization that aims to "[a]ttract and disburse additional resources to prevent and treat HIV and AIDS, tuberculosis and malaria." A public–private partnership, the organization has its secretariat in Geneva,...
(aka "The Global Fund") and includes companies such as Apple ComputerApple ComputerApple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad...
, MotorolaMotorolaMotorola, Inc. was an American multinational telecommunications company based in Schaumburg, Illinois, which was eventually divided into two independent public companies, Motorola Mobility and Motorola Solutions on January 4, 2011, after losing $4.3 billion from 2007 to 2009...
, Giorgio ArmaniGiorgio ArmaniGiorgio Armani is an Italian fashion designer, particularly noted for his menswear. He is known today for his clean, tailored lines. He formed his company, Armani, in 1975, and by 2001 was acclaimed as the most successful designer to come out of Italy, with an annual turnover of $1.6 billion and a...
, and The GapGap (clothing retailer)The Gap, Inc. is an American clothing and accessories retailer based in San Francisco, California, and founded in 1969 by Donald G. Fisher and Doris F. Fisher. The company has five primary brands: the namesake Gap banner, Banana Republic, Old Navy, Piperlime and Athleta. As of September 2008,...
as participants.
- Since 1998 the UK-based AquAid Water Coolers has been donating 5.5% of turnover to supply clean drinking water to people in Africa via the two charities Christian Aid and Pump Aid. To date they have donated more than £5,000,000 and their business success has led to a number of their competitors setting up other schemes to bring water to people in the Third World
See also
- Corporate imageCorporate imageA corporate image refers to how a corporation is perceived. It is a generally accepted image of what a company stands for. Marketing experts who use public relations and other forms of promotion to suggest a mental picture to the public...
- Foundation (charity)Foundation (charity)A foundation is a legal categorization of nonprofit organizations that will typically either donate funds and support to other organizations, or provide the source of funding for its own charitable purposes....
- List of marketing topics
- MarketingMarketingMarketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
- Non-profit organizationNon-profit organizationNonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...
- PhilanthropyPhilanthropyPhilanthropy etymologically means "the love of humanity"—love in the sense of caring for, nourishing, developing, or enhancing; humanity in the sense of "what it is to be human," or "human potential." In modern practical terms, it is "private initiatives for public good, focusing on quality of...
- Public relationsPublic relationsPublic relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....
- OpenERPOpenERPOpenERP is an open source comprehensive suite of business applications including Sales, CRM, Project management, Warehouse management, Manufacturing, Accounting and Human Resources. OpenERP has separate client and server components...