Cause - Related Marketing

Today's consumers often want more than just quality, price and service in their purchases; they want to do business with companies that are socially responsible. Hence, companies are partnering with non-profit organization in Cause-related Marketing (CRM) strategies. CRM not only satisfies the consumers, but can also differentiate the company from its competitors and also provide other tangible benefits, like increased sales, visibility, customer loyalty, enhanced company image, etc.


Words like altruism, corporate responsibility and philanthropy are used by business houses to spell out their proven commitment to a worthy cause. In this regard, corporate houses are joining with charities or causes to market an image, product or service for mutual benefit. Embracing a good cause, not only builds brand loyalty among hard-to-please consumers, but also stands for something beyond merely profits. Cause-Related Marketing (CRM) can positively distinguish a company from its competitors and provide a marketing edge and other benefits, like increased sales, customer loyalty and improved company image.


Business with a Cause:


In this crowded market, where the price and quality of goods are more or less comparable, companies are competing to gain customer attention and loyalty. Besides advertising, public relations and CSR activities, business houses are adopting a marketing strategy called `Cause-Related Marketing' to enhance their brand image and boost sales. It was Jerry Welsh in 1983, then with the American Express, who first coined the term "Cause-Related Marketing".


Marketing Touch:


The marketing strategy of linking a brand to a relevant social cause or issue of mutual benefit has proved to be successful. Cause-related marketing is quite different from `Corporate giving', which is generally a donation made by large companies, that is tax-deductible. Corporate giving is a monetary one-time gift, which brings to light the key role of large companies in the economy and society and their responsibility for social progress. Many of the companies pledge for `socially responsible' behavior that displays their concerns about the environment, safety and health. Cause-related marketing is a strategy to bridge the gap between commercial activity and community activity. Supporting a specific cause helps the brands to connect better with the customers, suppliers and other stakeholders. Cause-related marketing, as we know today, initially took the form of collection boxes, set up near the cash counters in hotels and big shops, for the purpose of receiving donations. This money was used for a social cause. The approach has changed over the years. Companies, today, are achieving their marketing targets by associating themselves with social causes and enabling their consumers to financially support the cause by doing business. Cause-related marketing offers a potential boost in sale of those products which are attached to the cause and also adds great credibility to a company's branding efforts. It also strengthens the brand loyalty.


Effects of `Goodwill Marketing':


Goodwill marketing is a diversion for the company from its true mission of generating profits and boosting its business. The ethos behind corporate giving/cause-related marketing may be: increased sales, publicity or consumer goodwill. Now CRM has become the integral element of the business marketing mix for all the organizations, irrespective of their size and nature of operations. Let us take an example. Suppose a customer is planning to purchase a product which is produced by only two companies that have a similar marketing mix (i.e., same price, same guarantee and same business). But one of the companies is associated with a social cause. The customer will naturally be prompted to buy the latter company's products as he feels that, by doing so, he will help to raise some funds for a social cause. As the brand connects itself with a `good cause', the buying behavior of customers switch from other alternative and comparable brands because customers know that funds from their purchases will be used for making some difference in the society.


Success Stories:

Some of the organizations successful in making a cause-related marketing campaigns –

Coca-Cola
McDonald’s
Bayer Aspirin
Visa