84 Parctwo | Undestnng he Mattpae and Consumers TOMS Shoes: “Be the Change You Want to See in the World” i the world were a vilage of 1,000 people, 140 of the 1,000 would be iterate, 200 ‘would be malnourished, 230 would dine pol ited water, 250 would nave no shelter, 230 ‘would have no electric, and 400 would have no shoes, in 2006, these star fats, especialy the last one, struck Blake Mycoskle up dase and personally ashe visited Argentina to learn how ta play polo, practice his tango, and do some community service work, While there, the sight of barefooted children, 100 poor to have shoes, stunned hin Se in May 2006, Mycoskie launched TOMS Shoes with $300,000 of his own money. The founding concept was ths: For every pair of TOMS shoes that customers tought, the company would donate ancther par of shoes to a child in need around the ‘world. Mycoskie had previously started five successful strictly for profit businesses. “But ‘was ready to 60 something more meaning ful,” says Mycoskee. “I always knew | wanted to help others, Now, it was time to do some= thing that wasn’t ust fr profi." Mycaske re membered Mahatma Gandhi's saying: “Be the change you want to se inthe world. "Doing good” is an important part of TOMS’ mission, But so is “doing well”—the company 's very much a forproft venture However, at TOMS Shoes, the tvo missions go hand in hand. Beyond being socialy admirable, the buy-one-give-one-away concept is aso 3 ‘good business proposition. in addition to ‘scratching Mycoskie’ich to help people, “the timing was perfect forthe American consumes, to," he says. "With the rise of social and eco- consciousness and the economy ina downturn people were looking for innovative and afford- able ways to make the word a better place” With all these “do good” and "do well” ‘goals swing in his head, Mycoskie returned home from his Argentina tip, hired an intern, and et about making 250 pars of shoes inthe ‘oft of his Santa Monica, California, home, Stuffing the shoes into tree duff! bags, he made the fledging company’s fist "Shoe Drop" tour, returning to the Argentine vilage and giving one pair of shoes to each child Mycoskie arved back home to find an a about his project onthe front page of the Los “Angeles Times Calendar section, TOMS had been in business for only two weeks, out by that very afternoon, he had orders. for 2,200 pairs of shoes on his Web ste By October 2006, TOMS hac sold 10,000, pairs of shoes. Tue tothe company’s one-for ‘ne promise, Mycosk'e undertook a second TOMS Shoe Drop tour Consistent with his new til, "Chief Shoe Giver of TOMS Shoes, he led 15 employees and volunteers back to Argentina, where they went from schoo! to schoo), vilage to vilage and gave away an- ther 10,000 pairs of shoes. don't just drop the shoes off, as the name might imp” says Mycoskie. "We place the shoes on each chic fet so that we canes ‘abish a connection, which is such an important part of our brand, We want to ge the chidren ‘the eling of oe, and warmth, and experience But we alo gel those feelings as we give the shows.” “The one ne idea caught fre. As word spread about TOMS, a not-for prott organiza ‘ion called "Friends of TOMS ferred to “create avenues for individuals to volunteer and experience [the TOMS] ms: sion.” participate in Shoe Drops, and “perform good ‘works in thelr own cornmuns ties and ives, Vogue magazine and other major publications ran stories on the company’s philosophy and good wotks. In November 2007, 40 TOMS employees and volunteers embarked on ‘the thie Shoe Drop, traveling to South Africa to place shoes on the feet of $0,000 more children Nex, TOMS Shoes tured its attention t Ethopia, where 11 milion people are at risk formal ee Real Marketing Cea for podoconioss, a disease often caused by sh ia in voleanc sos. Children’s bare feet ab- sorb the slica, which can cause elephants, severe swelling ofthe legs and feet. The dis ease progresses until surgery is required. The simple preventive cure? Shoes. As par of the CCrstmas season in 2008, TOMS offered gift card packages, which included a certificate for a par of shoes and a DVD telling the TOMS story. The goal was to give 30,000 parts of shoes to Ethiopian children in 30 days. ‘TOMS has also focused on needy cheren inthe United Stats, stepoing into helo chien whose families were sil recoverng from nat fal diastes, such as Hurieane Katina in cousiana. also in the Unted States, TOMS started grassroots marketing movernent called “TOMS Vagabones,” These traveling groups of TOMS disciples hit the road in van full of TOMS shoes and help to organize events on college and school campuses and in communities all ‘r0und the country The Vagabonds’ goal is to raise awareness about TOMS, sel shoes, and in spire more people to get involved withthe com pany moverent. The Vagabond chronicle ‘the travels on TOMS" Facebook page (wa facebook com/TOMSVagabonds), blog (www msshoesb'ogcom), and Tuite site (na! ‘iter comomsshoe) By mid-2010, TOMS had provided more than 600,000 pairs of shoes to chitden in need around the word, selling ther counter parts at roughly $55 each, Tatrings upto $33 CCause-related marketing: TOMS pledges: "No complicated es simple pair toa child on your behalf." Here, TOMS founder and ‘CO Blake Mycoskie gives out shoes in Argentina.” ‘you buy a pair of TOMS and we giverrillon werth of shoes. Retaiers such as Nord- stroms, Urban Qutfters, and even Whole Foods Market are now offering TOMS in more than 400 US, outlets. In fact, Whole Foods ‘Markets the company’s biggest customer. TOMS! rapic growth isthe result of pure chases by caring customers who then tell the TOMS story to the’ rends. Whereas the ypi- «al shoe company spends about 20 percent of Chapter 3 | Analyzing the Marketing Environment 85 {ound that 71 percent of consumers said that dlspite the recession they had given just as, ‘much time and maney to causes they deemed worthy Fifty-five percent of respondents also Indicated they would pay more fora brandi it supported a good cause. TOMS Shoes is a great example of cause-elated marketing—af “doing well by doing goos.” Mycaskie hopes that his com: pany wil inspire people to think differently about business, "My thinking was. that TOMS would show that entrepreneurs no longer had to choose between earning money of making a difference in the world,” he says, "Business and charity or public ser vice don’t have to be mutually excisiv. In fact, when they come together, they can be very powerful sles on traditional advertising and promation, TOMS hasn't spent 2 single dollar on it. It hasn't had to. "Ultimately is our customers S@MreRs Quetes ar ther nforaton fom Tamar Sewer, “Te Wy Wok” ne, June 2010 pp 112-16, ho drive our succes,” says Mycoskie. “Gi ing not only makes you fel good, but tactu- ally isa very good business strategy, especially Stag Ferman, "Waking 3 Uo Gonder Busines Mage Ware” Buseck, nary 2,200, nce vn “busreseekcon/sralbaiorterJan20095820°90123_264702 ner, Bake Mose, “Shes Beer Teva,” eer made March 12, 2002, acted at wa cnlenchelpekescomfelteWenre- soerbetertamerow: Mehl Buen, “Corsarers Cann a Stand by Ths Causes ing Daou” Aching in this day and age, Your customers become ge, Noverber17, 2008, pec Sambo, “How TOMS shoes ound BkeKyosce ot tae," Fart, your marketers ‘March 16,201, accessed at tp dreney cr cor/20"008/ tallinetars shows, ke mys onure! Moreover, as TOMS’ success shows, con: —ingexmim: Chena Boy, “ive Sy Chay Ges She Branders She.” Wl Set oul, sumer keto feel good. A recent global study 2010,» D7; srainerntan ura xv tors com srahitpiensotons o, ccesne Naver 207 WHAT D2 Y¥4U CARE ABYUT? SS (@ Cause-related marketing: The Pepsi Refresh Projectis awarding '$20 milion in grants to fund hundreds of worthwhile ideas by Individuals and communities that will “refresh the world” (Cause-related marketing has become a primary form of corpo- rate giving. I ets companies “do well by doing good” by linking purchases ofthe company’s products or services with fund-raising for worthwhile causes or charitable organizations. Companies nov sponsor dozens of eause-elated marketing campaigns each year “Many are backed by large budgets and a full complement of mar- keting activites. ® For example, PepsiCo's year-long Pepst Refresh Projet is awarding $20 million in grants to fund hundreds of ‘worthwhile ideas by individuals and communities that will “re fresh the world.” “What do youcare about” asks one Pepsi Refresh 1d. "Maybe i's green spaces. Or educational comics, Maybe its teaching kids to rock out” PepsiCo is spending millions of dollars ‘ona full-blown multimedia campaign promoting the cause-elated marketing program. ‘Cause-related marketing has stirred some controversy. Crit- {es worry that cause-related marketing is moze a strategy fr sll ing than a strategy for giving-that “cause-elated” marketing is really “cause-exploitative” marketing. Thus, companies using ‘cause-related marketing might find themselves walking fine line between increased sales and an improved image and facing charges of exploitation. However, if handled well, eauseelated marketing can really benefit both the company and the cause. The company gains an effective marketing tool while building & more postive public image. The charitable organization or cause gains greater visibility and important new sources of funding and support Spending on eause-related marketing in the United States sky- rocketed from only $120 million in 1990 to more than $1.6 billion in 2010.