Cause marketing

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Cause marketing is marketing done by a for-profit business that seeks to both increase profits and to better society in accordance with corporate social responsibility, such as by including activist messages in advertising. [1]

Contents

A similar phrase, cause-related marketing, usually refers to a subset of cause marketing that involves the cooperative efforts of a for-profit business and a non-profit organization for mutual benefit. Cause-related marketing refers to the practice in which companies allocate a portion of the revenue generated from product sales to support a specific cause. Consumers who value the cause more highly tend to exhibit a greater willingness to pay for the product. [2] A high-profile form of cause-related marketing occurs at checkout counters when customers are asked to support a cause with a charitable donation. Cause marketing differs from corporate giving (philanthropy), as the latter generally involves a specific donation that is tax-deductible, while cause marketing is a promotional campaign not necessarily based on a donation.

History

The United States Congress passed the Endangered Species Act on December 14, 1973. In response, 7-Eleven sold Endangered Species Cups, and donated one cent from the sale of each cup to the National Wildlife Federation. Donations from the program totaled $250,000, which the National Wildlife Federation used to purchase Bald Eagle habitat. The transfer of land to the U.S. Government and U.S. Fish and Wildlife Service took place on December 19, 1974, and came to be known as the Karl E. Mundt National Wildlife Refuge. [3]

In 1976, a cause marketing campaign was executed by means of a partnership between the Marriott Corporation and the March of Dimes. [4] Marriott's objective was to generate cost-effective public relations and media coverage for the opening of their 200-acre (0.81 km2) family entertainment center, Marriott's Great America in Santa Clara, California. The March of Dimes's objective was to 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. This cause marketing campaign and partnership raised an unprecedented [5] $2.4 million, to become the most successful promotion [5] in the history of Chapters West of the March of Dimes, while providing hundreds of thousands of dollars in free publicity and stimulating a 2.2 million person attendance, a regional theme park record, for the opening year of the Marriott entertainment complex. [5]

In 1979, in a Rosica, Mulhern & Associates campaign for Famous Amos cookies, [6] Wally Amos became the national spokesperson for the Literacy Volunteers of America. [7]

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 shared Komen's commitment to end the disease. [8]

Recent interest in cause-related marketing is generally argued[ weasel words ] to stem from American Express, which apparently[ citation needed ] coined the phrase in 1983. Following various pilot schemes in 1981, American Express developed a campaign to donate funds to a number of different non-profit organizations as part of the San Francisco Arts Festival. Every time someone used an American Express Card in the area, a two 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 program were apparently[ citation needed ] exceeded. Card usage was reported[ citation needed ] 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" have 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. [9]

Background

According to a 2007 report published by onPhilanthropy, [10] cause marketing sponsorship by American businesses was rising at a dramatic rate. Citing an IEG, Inc. study, $1.11 billion was spent in 2005, an estimated $1.34 billion in 2006, and the number rose further in 2007. As an update, IEG reported [11] that cause marketing grew 3.9% to reach $1.85 billion in 2014. For 2015 they forecast 3.7% growth for cause marketing, to reach $1.92 billion. [12]

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, [13] 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[ weasel words ] to the increase in workplace giving programs.[ citation needed ] 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 companies be "good corporate citizens". [14] These studies also show a substantial increase from just before to just after the September 11, 2001 attacks.

Other studies also show that cause-related marketing 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. CSR voluntarily initiated by firms results in more opportunities for profit than CSR mandated by the government. [15]

Benefits and concerns

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 relations, improved customer relations, additional marketing opportunities, and making more money. These benefits occur because this marketing model gives the consumer the feeling of being a philanthropist while doing something as simple as buying a pair of shoes. [16]

There are some concerns related to cause marketing. The issue of trust has emerged as central to the potential for the impact of cause marketing. Specifically, 78% of consumers reported that a partnership between a nonprofit and a company that they trust makes a cause stand out. [17] If a consumer doesn't trust the business that is behind the cause marketing campaign, it can be seen as an insincere effort to attract more loyalty from consumers. For that reason, it is important that the cause marketing campaign be authentic to the brand image of the products that are running the marketing campaign. Another potential issue with cause marketing is the possible increase in the price of the cause-related products. Only 19% of consumers would be willing to buy a more expensive brand if it supported a cause. [18] Consumers are also not sure about how much money actually gets donated. [19]

Cause Marketing has a smaller effect on the happiness of the consumer than regular donations. Also, people who bought such a product are less likely to donate for the cause thus leading to an eventual decline in funding. [20]

Online cause marketing

Overview

Cause marketing has been conducted more through online channels in recent years. 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 media (sometimes referred to as integrated marketing).

The advent of online cause marketing has allowed consumers, for example those who are loyalty program members, to take a far more active role in cause marketing. This is democratized transactional giving. It means consumers, rather than companies, decide which causes to support and advocate for. An example would be a company allowing its loyalty program members to convert unredeemed rewards, such as points or miles, into cash donations to causes of the customers' own choosing, rather than having the company select the charities. An online platform is necessary to connect the customers to a large-enough selection of charities.

Online charity auctions

In recent years, online auctions have been used in cause marketing strategies using a number of different online auction platforms. Companies have created programs to help sellers and corporations donate a percentage of their sales to a nonprofit organization through the use of auctions. Businesses and nonprofit organizations can also use the program for cause marketing and nonprofit fundraising programs. [21]

Types

Cause marketing can take on many forms, including:

Transactional Campaigns: A corporate donation triggered by a consumer action (e.g. sharing a message social media, making a purchase, etc.), and Non-Transactional Campaigns: A corporate donation to a cause that is not contingent on an explicit action of the consumer.

Point of Sale Campaigns: A donation solicited by a company at the point of sale but made by the consumer (e.g. consumers are asked to round up their purchase or donate a dollar when they check out online or in-stores).

Message-Focused Campaigns: Business resources are used to share a cause-focused message. For example, a campaign that encourages behavior change (e.g. don't text and drive), drives awareness about an important cause (e.g. talking with elderly parents about driving), or encourages consumer action (e.g. signing a petition to save whales from captivity). [22]

Portion of Purchase: Businesses donate a portion of their sales to a nonprofit or cause. [23]

Pin Ups: Primarily for in-house use. Customers will donate and fill our their name on a paper icon, which will then be hung up in the store. [23]

Buy One Give One: Businesses will donate a product with comparable value to a designated product based on each sale of that product. [23]

Volunteerism: Rather than asking for a donation, businesses will ask if customers will volunteer their time to a certain organization. [23]

Digital Engagement: Businesses create a "digital experience" using social media and software engineers to spread awareness and raise funds for a cause or nonprofit. [23]

See also

Related Research Articles

<span class="mw-page-title-main">Nonprofit organization</span> Organization operated for a collective benefit

A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, or simply a nonprofit, is a legal entity organized and operated for a collective, public or social benefit, as opposed to an entity that operates as a business aiming to generate a profit for its owners. A nonprofit organization is subject to the non-distribution constraint: any revenues that exceed expenses must be committed to the organization's purpose, not taken by private parties. Depending on the local laws, charities are regularly organized as non-profits. A host of organizations may be nonprofit, including some political organizations, schools, hospitals, business associations, churches, foundations, social clubs, and consumer cooperatives. Nonprofit entities may seek approval from governments to be tax-exempt, and some may also qualify to receive tax-deductible contributions, but an entity may incorporate as a nonprofit entity without having tax-exempt status.

<span class="mw-page-title-main">Corporate social responsibility</span> Form of corporate self-regulation aimed at contributing to social or charitable goals

Corporate social responsibility (CSR) or corporate social impact is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, community development, administering monetary grants to non-profit organizations for the public benefit, or to conduct ethically oriented business and investment practices. While once it was possible to describe CSR as an internal organizational policy or a corporate ethic strategy similar to what is now known today as Environmental, Social, Governance (ESG); that time has passed as various companies have pledged to go beyond that or have been mandated or incentivized by governments to have a better impact on the surrounding community. In addition, national and international standards, laws, and business models have been developed to facilitate and incentivize this phenomenon. Various organizations have used their authority to push it beyond individual or industry-wide initiatives. In contrast, it has been considered a form of corporate self-regulation for some time, over the last decade or so it has moved considerably from voluntary decisions at the level of individual organizations to mandatory schemes at regional, national, and international levels. Moreover, scholars and firms are using the term "creating shared value", an extension of corporate social responsibility, to explain ways of doing business in a socially responsible way while making profits.

<span class="mw-page-title-main">Sponsor (commercial)</span> Support of an event, activity, person, or organization financially or through services

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<span class="mw-page-title-main">Fundraising</span> Process of gathering donations

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The pink ribbon is an international symbol of breast cancer awareness. Pink ribbons, and the color pink in general, identify the wearer or promoter with the breast cancer brand and express moral support for people with breast cancer. Pink ribbons are most commonly seen during National Breast Cancer Awareness Month.

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<span class="mw-page-title-main">Susan G. Komen for the Cure</span> American non-profit organization

Susan G. Komen is a breast cancer organization in the United States.

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<span class="mw-page-title-main">Breast Cancer Awareness Month</span> Annual health campaign

Breast Cancer Awareness Month (BCAM), also referred to in the United States as National Breast Cancer Awareness Month (NBCAM), is an annual international health campaign organized by major breast cancer charities every October to increase awareness of the disease and raise funds for research into its cause, prevention, diagnosis, treatment, and cure.

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<span class="mw-page-title-main">Breast cancer awareness</span> Effort to raise awareness and reduce the stigma of breast cancer

Breast cancer awareness is an effort to raise awareness and reduce the stigma of breast cancer through education about screening, symptoms, and treatment. Supporters hope that greater knowledge will lead to earlier detection of breast cancer, which is associated with higher long-term survival rates, and that money raised for breast cancer will produce a reliable, permanent cure.

Volunteer grants are charitable gifts given to non-profit organizations by corporations in recognition of volunteer work being done by a company's employees. This practice is widespread in the United States.

Democratized transactional giving is a form of corporate philanthropy and the latest evolution in cause marketing, where consumers, and not the brand in question, have maximum control over the causes they choose to support. Augmenting traditional corporate philanthropy and participatory cause marketing, democratized transactional giving empowers consumers to become better brand and cause advocates while promoting a strong behavioral influence that seeks to yield greater loyalty and brand commitment.

Cause-related loyalty marketing is a recent trend in cause marketing. As the name implies, it is the marriage of cause marketing and loyalty programs. Cause marketing occurs when for-profit companies join forces with nonprofits to promote a cause. Recent examples include Nike, Inc. partnering with Livestrong, athlete Lance Armstrong’s cancer-fighting foundation, and Eastman Kodak teaming with stationery designer Bonnie Marcus in support of Breast Cancer Awareness Month. Cause-related loyalty marketing takes these donations and corporate social responsibility efforts one step further, wedding them to thousands of customer loyalty programs. Rather than requiring the outlay of funds from donors, cause-related loyalty marketing “recycles” loyalty program members’ unused points or miles. It then converts them into usable currency for a cause of the loyalty members’ choosing.

<span class="mw-page-title-main">Pinkwashing (breast cancer)</span> Form of cause marketing that uses a range of pink ribbon logos

Pinkwashing is a form of cause marketing that uses a pink ribbon logos. The companies display the pink ribbon logo on products that are known to cause different types of cancer. The Pink ribbon logo symbolizes support for breast cancer-related charities or foundations.

References

  1. ↑ Organ, Michael. "Cause Marketing — Definition" . Retrieved June 7, 2017.
  2. ↑ Luan, Chi‐Cheng; Phan, The Anh (March 2024). "The effect of emotion type and similarity of experience on consumers' willingness to pay for cause‐related products: Construal level perspective". Journal of Consumer Behaviour. 23 (2): 808–824. doi:10.1002/cb.2245. ISSN   1472-0817.
  3. ↑ "Environment: Pandas for Preservation". Time. 1974-08-12. ISSN   0040-781X . Retrieved 2018-07-29.
  4. ↑ Chong, Rachael (2010-03-18). "Cause-Related Marketing: Just Plain Ol' Marketing?". Huffington Post. Retrieved 2018-04-19.
  5. 1 2 3 Hartnett, Bridget. ""Making the Case for Cause Marketing: Impact on the For-Profit and Nonprofit Communities"". Cause Marketing Whitepaper Fall: 1–14.
  6. ↑ The Record article, "He spread word on literacy aid"
  7. ↑ Wally Amos – AEI Speakers Bureau
  8. ↑ Susan G. Komen® | News Archived 2010-06-18 at the Wayback Machine . Ww5.komen.org. Retrieved on 2013-07-29.
  9. ↑ Cause Related Marketing - Sue Adkins - Google Books. Books.google.com. Retrieved on 2013-07-29.
  10. ↑ onPhilanthropy: Articles: SPECIAL REPORT: Consumer Philanthropy Archived 2007-10-27 at the Wayback Machine
  11. ↑ IEG Sponsorship Report – Forecast Recession Slams Brakes On Sponsorship Spending Archived 2012-09-12 at archive.today
  12. ↑ "Sponsorship Spending Growth Slows In North America As Marketers Eye Newer Media And Marketing Option". Archived from the original on 2015-12-28. Retrieved 2015-12-30.
  13. ↑ Civic-Minded Millennials Prepared to Reward or Punish Companies Based on Commitment to Social Causes
  14. ↑ Cone Corporate Citizenship Study Fact Sheet -2002 [ permanent dead link ]
  15. ↑ Armstrong, J. Scott; Green, Kesten C. (1 December 2012). "Effects of corporate social responsibility and irresponsibility policies" (PDF). Retrieved 28 October 2014.{{cite journal}}: Cite journal requires |journal= (help)
  16. ↑ "One for One Makes Consumers Feel Like Philanthropists".
  17. ↑ 2010, Cone Nonprofit Marketing Trend Tracker)
  18. ↑ "2010 Cone Cause Evolution Study" (PDF). 2010. Archived from the original (PDF) on 2021-08-17. Retrieved 2017-11-11.
  19. ↑ Eikenberry, Angela M. (2009). "The Hidden Costs of Cause Marketing". Stanford Social Innovation Review. 7 (3): 51–56.
  20. ↑ Krishna, Aradhna (July 2011). "Can supporting a cause decrease donations and happiness? The cause marketing paradox". Journal of Consumer Psychology. 21 (3): 338–345. doi:10.1016/j.jcps.2011.02.001. hdl: 2027.42/141072 . ISSN   1057-7408.
  21. ↑ Quinn, Laura S. (2011-07). "A Few Good Online Auction Tools". ideal-ware. Retrieved 2014-1-16.
  22. ↑ "FAQ - Cause Marketing Forum". www.causemarketingforum.com. Archived from the original on 2015-12-26. Retrieved 2015-12-30.
  23. 1 2 3 4 5 "Types of Cause Marketing Campaigns - A-Good Cause". Archived from the original on 2018-06-27. Retrieved 2018-05-03.
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