Marketing Assignment Help online : Reflection paper on Cause related marketing
Introduction
Marketing is a management process which essentially involves understanding the needs and requirements of the customer and meeting them profitably. Long gone are the days when companies would manufacture a product and it would easily sell in the market; now, consumers are aware of the choices they have and are ready to switch to a new product at the slightest inconvenience. (Kotler, 2007) This is the reason why companies spend millions of dollars on analysing the consumer to serve them better. Noted scholar Philip Kotler devised a five step formula to craft a successful marketing strategy
R STP MM I C
R = Market Research
STP = Segmentation, Targeting, and Positioning
MM = Marketing Mix (Product, Price, Place and Promotion)
I = Implementation
C = Control (evaluating results with feedback) Source: (Kotler, 1999)
After the market research has been done and target market has been identified, the company decides on the 4ps of marketing, out of which one is Promotion. Cause related marketing is a type of promotional tool used by companies to place their product in the minds of the consumer. The aim of this report is to critically analyse all the aspects of cause related marketing with the help of real life examples.
What is Cause Related Marketing
A formal definition of cause related marketing is a “commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product or service for mutual benefit” (Adkins, 1999)
What I could decipher from this definition is that companies associate themselves with some noble cause in order to gain publicity as well as serve the community. Like every other promotional activity the aim of cause related marketing is also to build its reputation in the eyes of customers, suppliers, investors, and the community at large.
I think that the simplest form of cause related marketing can be seen in local shops and restaurants which put up donation boxes to help orphans and under privileged children etc.
The American Express Story
American Express was the company which coined the term “Cause Related Marketing” in the year 1983. The company initiated a three months marketing campaign to support the restoration of statue of liberty, the underlying objective was of course to increase the usage of the card and to draw new customers. The company declared that for every transaction it will donate 1 cent to the restoration fund and for every new card, 1 dollar. The results were phenomenal; the fund raised was over $1.7 million, the card usage increased by 27% and there was a whopping 47% increase in the number of new applications. The American Express story is a great example of how cause related marketing can be mutually beneficial and gratifying, if executed properly. (Baker, 2003)
Corporate Philanthropy, Sponsorships, and Cause Related Marketing
To understand cause related marketing in its entirety, it is essential to understand the difference between corporate philanthropy, sponsorship and cause related marketing. (Sundar, 2007)
Below stated are the chief characteristics of all the three
Corporate Philanthropy
è The primary focus is on charity
è The company does it on an ongoing basis
è Only the top management is involved
è The amount or the fund is pre decided and cannot be altered
è The company does not aim to get any publicity out of the charity
è There is no outcome expected
è It has no impact on sales and revenues
Sponsorship
è The primary focus is on the publicity of the organisation
è The time frame is limited, depending on the contract
è Only the marketing department is involved
è The amount or the fund is pre decided and cannot be altered
è The company wants to get recognition
è The expected outcome is to get positioned in the minds of the consumers and boost sales.
Cause Related Marketing
è The primary focus is publicising the product and the organisation
è The time frame is limited, depending on the marketing campaign
è Only the marketing department is involved
è The amount or the fund is variable depending upon the situation at hand
è The company wants to get recognition and aims to create a bond with the customer
è The expected outcome is to get positioned in the minds of the consumers and boost sales.
è The revenue generated is split between the company and the non-profit organisation.
Development of Cause Related Marketing
From all the research done for this report, I can easily decipher one thing, that cause related marketing is not philanthropy or altruism; the sole objective is to boost the sales. In the process of creating a brand and boosting sales, a non profit organisation gets benefitted. The essence of cause related marketing is in two words commercial partnership and mutual benefit.
It is called a commercial partnership because both the parties are aware of each other’s objective; even the non profit organisation is in this partnership for money since even they need money to support their noble cause. The second term, mutually beneficial, is self explanatory; both the parties are in the agreement for satisfy their objectives. The good thing is that something worthwhile gets done in the process of making money. (Adkins, 1999)
With time, almost all major corporations across the globe have taken up cause-related marketing majorly because the benefits of the same are innumerable. It goes without saying that the existence of any business is dependent on the community it is in, therefore by developing the community, the business is in a way helping itself. The fate of the community and the company are intertwined, the better the community, the better are the chances of success for the company. I think that though American Express was the first company to actually put cause-related marketing in use, but it has been around for centuries.
Popular Examples of Cause Related Marketing Campaigns
Yowie in the Australian Market
Yowie is a confectionary launched by Cadbury in the Australian Market, in the year 1997. It was greatly acclaimed by Australians of all age. Yowie represents a mythical Australian creature; it has six characters Rumble, Ditty, Nap, Squish, Boof and Crag. Cadbury employed cause-related marketing by combining the confectionery with education, it teaches children about the environment and its value. The company banked upon the Australian wilderness and the natural heritage; this was a golden move for the company since the people of Australia were immediately able to relate themselves with the product. In order to promote the cause related marketing campaign the company has also introduced associated products like models of Australian Wildlife, Information packs and story books etc. I personally love Yowie and really admire their marketing strategy; it is indeed one of the most successful CM campaigns. (PLC., 1999)
Coca-Cola
Coca cola is one company which has been really using cause-related marketing to the fullest. Every year the company comes up with a new campaign supporting various causes like education of girl child, donation to world wildlife fund and promoting water conservation etc. This year, Coca-Cola announced its partnership with Global fund to fight AIDS, Tuberculosis, and Malaria by delivering critical medicines and recourses in the rural parts of Africa. I can easily conclude that the sales of Coca- Cola in Africa must have improved significantly, since people will respect the company more because of the help it is providing to the rural community. (Coombs & Holladay, 2012)
In the year 2011, Coco-cola announced its global partnership with International Federation of Red Cross and Red Crescent Societies. The company donated $1 million so that the federation can immediately take care of disasters around the world. From what I understand, all these philanthropic activities immensely help in building the good will of the company.
The Non Profit Response
Naturally, there were apprehensions in the non profit circle in accepting corporate help; especially because the companies aimed at gratifying their own objectives first. Nevertheless, it is an opportunity which should not be missed. I personally feel that, even though the companies are engaging in social activities for their own personal reasons but something good is coming out of the deal. Statistics show that such partnerships are extremely helpful for non-profit organisations because the amount of funds they receive is huge; raising such amount of money on their own is simply not possible. Therefore, I feel that cause-related marketing is a win-win situation for both the parties and should be encouraged in the business community.
Recommendations
I believe that cause-related marketing is constructive egoism since ultimately it leads to the development of the society. As stated before, cause related marketing cannot be called philanthropic since it is tainted with personal interest, which is why it is looked down upon. However, what critics fail to realise is that something good is being accomplished in the end. My recommendation to the organisation is that cause-related marketing should be encouraged because it is mutually beneficial.
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