Business Horizons (2005) 48, 443 — 453
Cause-related marketing: More buck than bang?
Matthew Berglinda, Cheryl Nakatab,*
School of Communications, Northwestern University, 2240 Campus Drive, Evanston, IL 60208, USA Department of Managerial Studies, University of Illinois at Chicago, MC 243, 601 S. Morgan, Chicago, IL 60647, USA
Cause-related marketing; Social responsibility; Social-ethical issues
Abstract Starbucks, Target, and Nike are just a few of the businesses partnering today with not-for-profit organizations in cause-related marketing campaigns. These campaigns are implemented for a dual purpose: on one hand, to raise awareness, support, and donations for social causes such as global hunger relief, and on the other, to enhance corporate reputations, customer loyalty, and financial gains for companies. An example of cause-related marketing is an effort organized by Macy’s, Pfizer, and other businesses on behalf of the American Heart Association. The program has raised over $32 million in donations for the charity, while generating over 1 billion media impressions for corporate sponsors. In this article, we discuss the concept and practice of cause-related marketing, as well as some of its socialethical complexities. We end with suggestions for increasing the effectiveness of this popular marketing tool and form of corporate philanthropy. D 2005 Kelley School of Business, Indiana University. All rights reserved.
1. Cause-related marketing: An overview
In 1997, Yoplait Yogurt formed a unique partnership with the Susan G. Komen Breast Cancer Foundation. For every cup of yogurt sold, Yoplait’s corporate parent General Mills donated ten cents to the Foundation for breast cancer research. At the same time, Yoplait initiated an extensive advertising campaign promoting the partnership called bSave Lids to Save Lives.Q The arrangement has been very successful, strengthening Yoplait’s brand image and
* Corresponding author. E-mail addresses: email@example.com (M. Berglind)8 firstname.lastname@example.org (C. Nakata).
sales while increasing public awareness of breast cancer. Now in its eighth year, over $12 million has been raised for Komen’s research initiatives. Yoplait’s strategic alliance with the Foundation is an example of cause-related marketing (CRM). Marketing a product, service, brand, or company by tying it with a social cause (such as breast cancer detection and treatment) is the essence of CRM. Typically, a portion of sales from the marketed item is donated to the cause. Over the last 20 years, CRM has evolved from a niche marketing tool and curiosity into an established and prevalent form of corporate philanthropy. Business managers note the benefits of building brands, improving corporate reputations, and generating more revenues, while heads of not-for-profit organizations (NPOs) appre-
0007-6813/$ - see front matter D 2005 Kelley School of Business, Indiana University. All rights reserved. doi:10.1016/j.bushor.2005.04.008
which is co-promoted. or company through a mutually beneficial relationship with a non-profit or social cause organization (Marconi. the means is a publicized association between the business and cause. For instance. representing one of the few areas in which social and commercial interests converge.Q bpro-social marketing.Q bcorporate social marketing. and others.d. really?
There are many terms similar to cause-related marketing. 60) This conceptualization.Q (www. MCI. Berglind. Among these are bcorporate societal marketing. We conclude with suggestions for creating and executing more effective and thoughtful CRM efforts. In this case. advocates see CRM differently: It marries the needs of businesses with those of cause organizations. Philip Kotler.Q and bpassion branding.org) The Think Before You Pink assertion reflects the kinds of questions CRM campaigns tend to raise: Is the CRM program a diversionary tactic.. service.Q (Varadarajan & Menon. Given the evolving and expanding nature of CRM. and discuss some ethical issues and social implications. is the CRM campaign a clever manipulation to enrich a corporation’s coffers (generating a buck). and used to enhance the market position. usually financial.
M. modify. has been particularly harsh regarding the bSave Lids to Save LivesQ project: bA woman would have to eat three containers of Yoplait every day during the four-month campaign to raise $36 for the cause—and research suggests a number of health risks. 1988. however. associated with the consumption of dairy products from cows given rBGH (recombinant bovine growth hormone). or society as a whole. or abandon a behavior for the benefit of individuals. Lee. it is not without critics. a watchdog group that monitors breast cancer CRM promotions. most of all. In more recent discussions of CRM. NPOs. p. reject.Q (Roderto. 2002). To that end.444 ciate the increased funding for. public faith in corporations has been shaken by spectacular acts of malfeasance from the likes of Enron. We should also distinguish between CRM and social marketing. While cause-related marketing appears to be a win—win—win-situation for businesses. groups. constrains a CRM to a donation tied to a specific purchase or level of sales. 2002. namely the business. Yet. Importantly. p. as well as heightened public receptivity to. However. brand. not the larger social good. An example is Barnes and Noble’s sponsorship of lectures on racial tolerance on behalf of the Anti-Defamation League.Q bcorporate issue promotions. What is CRM. we define it as the practice of marketing a product. and the public. Think Before You Pink (n. the concept can be confused with that of social marketing. of a business. CRM projects are not general bfeel-goodQ or consciousness raising exercises. we describe the concept and practice of CRM. and is executed largely without the help of corporations. & Kotler. CRM is clearly in the province. Xerox. excluding promotion of a business. there is no donation tied to purchases or sales. including cancer.Q bsocial issues marketing.Q We prefer the term bcause-related marketingQ
. a well-known marketing expert. It is typically directed by a non. hiding a product problem through a public relations spin? Is the amount donated to the cause disproportionately small relative to the sales generated for the product? And. Nakata because it indicates a focus on a specific cause.or
2. and his colleagues refer to social marketing in this way: bSocial marketing is the use of marketing principles and techniques to influence a target audience to voluntarily accept. for specific concerns. explain why organizations enter into these arrangements.thinkbeforeyoupink. C. In contrast. there is also a proliferation of concepts. In addition to multiple terms. 5) Social marketing is a much older practice than CRM. the word brelatedQ refers to something along side the cause. as well as less direct gifts (Hoeffler & Keller. the concept has been broadened to include other forms of assistance to the cause. or is it a sincere way of assisting a charity (creating a bang or social impact)? In recent years. social marketing solely addresses a social ill. 2004). their causes. As some of the CRM-like terms imply. it may be timely to look at CRM. One of the more widely circulating ideas follows: bCause-related marketing is the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specific amount to a designated cause when customers engage in revenue providing exchanges that satisfy organizational and individual objectives. Since NPOs and businesses are applying this strategy in rapidly growing numbers. rather. Jaundiced eyes may view CRM in the same light as these visible instances of corporate avarice and deception. too. they are attempts to generate resources. 2002).
3. Sensing it had something valuable on its hands. you didn’t do it. Henry Astor. CRMs have taken off. the famous advertising guru. casting a favorable light on their presence and actions. CRM donations increased more than twice as quickly. In 1983. reading to children). CRM trends: Up and away
Since the American Express campaign of 1983.Q which combined public service messages with an aggressive advertising program to prevent and reduce tobacco smoking among teenagers. Simons. summed up the impotence of
4. or making donations without tooting one’s horn.. Andrew Carnegie. 1999. The Statue of Liberty and Ellis Island were undergoing long overdue renovations and were in need of significant funds. expand. With the Statue of Liberty campaign.. commercial objectives were unabashedly and unapologetically co-mingled with a social mission to produce a single marketing effort. financial services giant American Express executed what many consider to be the first CRM campaign (Smith & Higgins. and other captains of industry began making sizable financial contributions to start. Over a hundred years ago. John Rockefeller. and then rose to $241 billion by 2003. & Simons. Enter CRM. representing a 6% annual growth rate. pamphlets. Origins in Rockefeller and American Express
CRM is rooted in the long tradition of American corporate philanthropy. reducing lung cancer and other life-threatening diseases associated with smoking.Q (Tanen. has never been an act of pure altruism. Corporate giving is also expanding more quickly than any other source of charitable donation (Giving USA Foundation. David Olgivy. and in direct response to the public’s raised social consciousness. American Express announced its good works with authority and fanfare.g. 1999). the company called the effort bcause-related marketingQ and trademarked the term.
445 quiet. The American Legacy Foundation developed a social marketing campaign called the bTruth Campaign. The key distinction from prior philanthropic endeavors was an overt and much publicized connection between a company’s primary activity (making money) and a not-for-profit organization’s aim (improving welfare). To make the public aware of this arrangement. As businesses entered the 1960s. In growing numbers. as reflected in increased spending (Webb & Mohr. However. and maintain museums. Yet giving. a rise of 57% since 1999 (Gard. Passive charity. did nothing to quell the rising chorus of criticisms aimed against businesses as part of the ruling hegemony (i. Over time. traditional philanthropy in this way: bIf you did it and didn’t tell anybody. The genius of this campaign was recognizing that the marketplace would reward firms that acted in a socially responsible way and that assisted ordinary citizens to act responsibly. which produces and circulates advertisements.. bthe establishmentQ). and other social and cultural institutions. The organization was created and funded as part of the $206 billion settlement reached in 1998 between U. corporations were finding traditional forms of philanthropy decreasingly effective. for the first time. American Express announced it would assist by donating one cent for each use of its credit card and one dollar for every new card issued. a 14% annual growth rate. The American Legacy Foundation provides an example. Boeing. taking illicit drugs) or toward constructive ones (e. tobacco companies and 48 state governments. The Vietnam War. American Express card usage grew by 28%. Steckel. from $630 million in 2000 to $828 million in 2002. 2003). Coca-Cola.. and Dow Chemical were all targets of anti-war protests. Companies invested approximately $991 million in cause campaigns in 2004. and new card applications increased by 17% (Tanen et al. and legitimization of dissent led to public demand that businesses behave with greater sensitivity to communities. 2004). 2000). In that light. In 1983.Cause-related marketing: More buck than bang? quasi-governmental agency. philanthropic giving totaled $100 billion. then and now. The results were fairly spectacular: over $1 million was raised for the cause.g. CRM expenditures went from practically zero in 1983 to an estimated $922 million in 2003. CRM is one of the fastest growing forms of marketing. too. both near and far. philanthropy became ingrained in the American corporate psyche. 1998). and other marketing collateral in order to dissuade the public from destructive habits (e. they modeled the principle of giving back to the commons. it is
. Civil Rights Movement. In this context. Thus. As leaders of commerce. social activism and consciousness triggered an examination of corporate philanthropic activities.S. The Legacy Foundation claims the campaign has been a successful weapon in the fight against tobacco addiction. p. Americans were questioning whether and how companies were actors in the social and political drama of their times. Corporations have always understood that donations serve a powerful public relations function. universities.e. For instance. making a break with the humbler philanthropy of the past. the firm spent $6 million promoting the Statue of Liberty campaign. 205).
Visa). Also known as bstrategic philanthropyQ (Adkins. the cause is promoted and some contribution. particularly its customers. World Wildlife Fund) licenses use of its name and logo to a company (e. 2000). a non-profit (e. Commonly. Mars ran a $50. However. businesses partner with non-profit groups affiliated with one issue. A percentage of every transaction is then given to the nonprofit. promoting both cause and company. There is. Any expenditure of resources.g. whether for charitable purposes or not. However. giving as a way to predetermined ends. schools. but this is not the case. the licensing program with Visa/FirstUSA has been very beneficial. oddly enough.
The above programs represent a fairly overt economic relationship between the cause organization and company. shareholders and market makers clamor for hikes in quarterly profits. which places the imprimatur on the product (e. raising public support for the not-for-profit. Through this partnership. In such a volatile situation. Liz Claiborne products are targeted to women. More than 200 million M&M candy packages were marked with the U.. C. Nakata Special Olympics. state.g. there are many other techniques. credit card). Special Olympics logo. must produce tangible benefits for the firm. the company contributed the same amount to the Special Olympics. exchange-based donation. an anti-hate group. corporations and individuals are being asked to step into the funding breach. and causes congruent with the firm’s goals. Helping to propel business interest in CRM is the pressure to tie charitable efforts to improvements in the bottom line and competitive position (Andreason.000 awarded to winners. This allows the company to be perceived by the public. describes the three most common practices as: is the classic ! Transactional programs: This every unit sold. Licensing programs: Licensing has become one of the most prominent forms of CRM programs. The Cause Marketing Forum. is made by the firm. forcing them to curtail charitable support.
5. For every $50. and city governments have faced shrinking revenues.446 little wonder that NPOs see corporations and CRMs as vital sources of funding. producing over $10 million in donations.000 giveaway program for lucky purchasers of its M&M products. Berglind. Over two million brochures covering ways to combat prejudice have been passed out in stores. CRM may appear to be a one-sided affair. although not tied to a transaction and not necessarily monetary.
M.S. CRM is a decided departure from earlier philanthropic efforts. a group dedicated to reducing domestic violence. as sensitive to women’s issues.. In the case of the World Wildlife Fund. there are more subtle CRM arrangements. CRM practices: One size does not fit all
The practice most closely associated with CRM is donating a portion of every sale to the cause organization. and by government institutions. Message promotion programs: In these programs. For a corporation contributes a share of proceeds to a particular social cause. CRM meets these requirements. federal. CRM is a means of achieving business objectives in tandem with social improvement. which tilted toward the latter. and critical constituencies (Smith & Higgins.. 1996). A key motivation is that NPOs are not able to rely heavily on government funding to sustain or expand their activities. who are disproportionately victims of abuse. NPOs understand they can profit from the collaborations as well. entered into such a program with Barnes and Noble. which provides instructional materials and lectures to promote racial and cultural tolerance. no specified donation. a prominent causemarketing advocate. Therefore. NPOs are actively courting potential business partners with. it is no longer enough to do good for others. An example is candy company Mars’ support of the U. The Anti-Defamation League. however. Together.S. leading them to seek and initiate the efforts. At the same time business managers grapple with gaining strategic advantage for their companies in an age of hyper-competition and rapid technological change. tried and true marketing techniques borrowed from commerce. the two organizations created the bClose the Book on HateQ initiative. Front and center are commercial interests. In recent years. 1999). Liz Claiborne initiated a campaign for the Family Violence Prevention Fund. In this regard. The issue is selected strategically to support the image of the corporation. which begin to blur the line with broader corporate social responsibility practices:
! Issue focused programs: In these programs. target markets. and can be lucrative for both parties.
. indicating that CRM is a flexible tool.g.
1999). 8000 people were paired with community projects in 36 states. The spike in sales was thus almost solely attributable to the MADD tie-in (Saffir & Femina. the partnership has raised over $10 million dollars for TeenSupreme. The cause may be a secondary consideration in the purchase decision. Much like an Underwriter’s Laboratories seal of approval. Yet. imply that the product adheres to high environmental. TeenSupreme. What made these results particularly noteworthy was that General Foods did not run a separate costly promotion for Tang. or benefits of. The growing tide of dollars directed to CRM programs suggests this as well. and sales of Tang climbed 13%. It helps the bottom line
CRM’s primary value to businesses is financial. These programs strengthen the bond between the company and its primary customers. Target focused programs: Target-focused programs are those that aid a particular group. but here. the idea that the company is giving back to the community strengthens customer loyalty and elevates sales. General Foods implemented a CRM campaign for one of its premier marques. if followed. wage. The business provides assistance to the charity in a variety of ways. 2004).. and labor standards. The premium ice cream maker positioned its brand as socially sensitive by giving a portion of sales to preserve rainforests and support independent farmers. Kraft Foods sells a brand of coffee that complies with international bfair-tradeQ standards (McLaughlin. sponsors Boys & Girls Clubs of America organizations and events (Tanen et al. A well-designed campaign can be extremely profitable. they believe. started reading projects for teenagers and opened leadership centers through the assistance of Taco Bell. the firm bought 5 million pounds of certified fair trade coffee. is the most important quality in this category. These numbers translated into millions of
6.1. often the company’s core market segment. We begin with those for corporations. their customers have an affinity. there is no specified donation. For every coupon used at point of purchase. including donations. 1999).
6. the company saw card usage rise by 28% and applicants increase by 17%. the company donated 10 cents to the advocacy group Mothers Against Drunk Drivers (MADD). Additionally. generating a large increase in sales with little to no additional expenditures. the stature and image of a corporation can be enhanced.Cause-related marketing: More buck than bang? Liz Claiborne has assisted the Fund in establishing abuse prevention programs in all 50 states and several foreign countries.000 for MADD. too. taste. materials. 1998). under its founders. applied CRM as a brand building tool. it is also important to know that three-fifths of teens (60%) are more positively disposed toward and likely to buy brands that support charitable causes (Gard. Taco Bell. To understand why this trend is occurring. engaging in CRM.
6. and publicity. volunteers. Studies have shown that consumers have more favorable attitudes toward brands that are tied to a cause than those that are not (Webb & Mohr.3. the guidelines.2. after all.
6. and will double the volume this year. powdered orange juice Tang. It builds the brand
Another benefit of CRM to companies is brand building. enabling it to more than recoup the $6 million investment in advertising. American Express’ Statue of Liberty campaign is an illustration. A CRM project can be comparatively more dollar efficient than other marketing efforts. As noted earlier. Business activity programs help build awareness of a corporation’s ethical practices. Fair trade refers to a set of guidelines created by the non-profit trade group TransFair USA. The program solicited $100. CRM benefits both sides
Proponents and practitioners of CRM maintain that the strategy is very useful. Last year. Ben & Jerry’s. Firms select causes for which. we describe reasons for. It enhances the corporate reputation
Through an association with a popular cause.
447 dollars in new revenues for the company. CRM can lend a firm heightened
. a Boys & Girls Club of America program. For Levis and other companies targeting the youth market. preference. hoping this will translate into higher brand memorability. Footwear maker Timberland recognized the brand building value of CRM when it recently placed an ad in Vanity Fair to drive people to its website and match would-be donors with causes. Last year. and then move on to those for NPOs. Business activity programs: Many corporations integrate ethical business practices into their operations. reinforcing the environmentally attuned image of the brand. 2004). More specifically. and purchasing. a youth-oriented brand.
Furthermore.8. Few campaigns can match the success of the Olympic Games and United States Olympic Committee.
. and even patriotism (Varadarajan & Menon. the bracelets are considered so cool and desirable that they are even passed out as wedding reception favors (Gard. 75% of respondents consider a company’s commitment to social issues when deciding where to work (Cone Communications. This human resources-building facet of CRM cannot be underestimated. A corporate partner with the stellar reputation of. Moreover. These non-financial resources are arguably as critical as any other. customers are less likely to abandon a company that has built a reputation as a socially responsible organization. Berglind. Another study shows that in firms producing advertising campaigns with a social dimension.448 visibility and respect. shaping. say. CRM campaigns are complex to create and implement. as well as convey social responsibility. Therefore. C. from accounting scandals and bad business practices to cases of product liability and product tampering. In exchange for donations. Therefore. As much as NPOs lend credibility to firms. Avon has so deeply committed resources to and adroitly executed a breast cancer CRM campaign for many years that. which has worked hard to overcome negative publicity on purported use of sweatshop labor. retention. Through this vehicle. in the eyes of customers. its foundation logo appears incomplete unless it includes a pink ribbon. corporate assistance in conceptualizing. It provides non-financial resources to NPOs
What should not be overlooked is that corporations also provide their marketing talent and business acumen to the development and implementation of campaigns. with millions of customers and a global network of suppliers). and $20 million to apply the Olympic rings in advertisements. 2002). last year gave $1 million to the Lance Armstrong Foundation and sold bracelets for $1 to generate additional donations. the message contact rate is almost incalculable (McDonalds is the world’s largest restaurant chain. over $20 million worth of bracelets have been sold. 1998).
6. It heightens NPO exposure and message efficacy
CRM provides more than monetary benefits. and morale. The exposure encompasses all members in the corporate partner’s supply chain and customer base. the symbol for breast cancer.
6. Johnson & Johnson lends stature and salience to the message. Corporate employees and owners derive a sense of satisfaction and pride from helping a worthy cause. the workforce is more motivated and better understands the essence of the corporate mission than would otherwise be the case (Drumwright. under the right circumstances.
M. Research shows CRM creates positive attitudes toward a company that has engaged in unethical practices (Creyer & Ross. bCrisisQ describes any number of negative events that may befall a company. Studies have shown that CRM campaigns generate positive assessments of a company by consumers (Webb & Mohr.7.6. Nike. It improves employee morale and retention
A final reason or benefit for companies to engage in CRM is internal in nature: improved employee recruitment. When a crisis occurs. corporations are allowed to put the logo of each organization on products and marketing materials. According to one study. The 2002 Salt Lake City Winter Games reached new heights in licensing-based fundraising: Corporations donated $5 million to $10 million each for use of individual U. public mindedness. In times of crisis. generating media attention and influencing the public on behalf of the cause. Thus far. 1996).S. Olympic Team logos. Through these promotions.4. firms lend credibility to NPOs. 1992).5. the Olympic non-profit organizations received $860 million from over 64 companies. 1988).
6. It increases funding for NPOs
The major benefit to NPOs and the primary reason for engaging in CRM is expanded funding. suggesting CRM may be a useful long-term investment. It generates goodwill
CRM can also generate goodwill for a business. McDonalds. Nakata
6. and dozens of other companies have donated millions to both NPOs for many years.
6. the brand can be inextricably tied with the cause. 2004). When that corporation is on the scale of McDonald’s. Coca-Cola. a second benefit is message efficacy: A message delivered through an alliance with a well-known and respected business is penetrating and persuasive. In total. the NPOs enjoy far greater exposure than they would be able to attain on their own. non-profits have access to increased financial resources for delivering messages and conducting activities on behalf of their cause. goodwill may be crucial to prevent long-term damage.
2001. and heal. Finally. victimizing culture they label the bCult of Pink Ribbons. more sensitive players in the CRM game are also aware of these issues.
7. . Perhaps in the fervor to generate support for a cause and boost the top line. namely to improve social conditions. The goal of the for-profit organization is to build value for shareholders. a form of sexual oppression and subjugation: b.Cause-related marketing: More buck than bang? and delivering the promotion can make all the difference between a successful and failed CRM endeavor. 28) There is fear that the union of these two interests damages the cause. from positive to negative. There may be environmental causes for cancer. Others have simply noted that the Cult of Pink Ribbons has diverted funds toward victims and away from research on cancer agents.. some
7. Transparency and honesty
Closely tied to the issue of advocacy versus exploitation is one of transparency and honesty. perversely. prettying it up. Nonetheless. have been among the most controversial in marketing. and also supporting the industry in trivializing dietary pesticide residues as avoidable risks of childhood cancer. The American Cancer Society has been identified as especially complicit. Walking the fine line
The unhappy verity of some CRM campaigns is limited benefit for non-profit partners. However. Critics of CRM worry that the worthy missions of non-profits are being co-opted by rapacious marketers. enlighten. use. if the corporation institutes an internal employee program as part of the CRM. p. and efficacy of these campaigns. 1994).longstanding track record of indifference and even hostility to cancer prevention. Watchdog groups and observers of commercial trends have pointed out that breast cancer survivor networks and CRM campaigns have created an insidious. We describe these issues because they influence perception.1.
449 observers claim that by highlighting critical needs and generating compassionate giving. which is perceived by some to be in direct conflict with the objective of the non-profit. and identifying these substances would prevent the disease from occurring in the first place. or both sides.1 percent of its $700 million annual budget to environmental and occupational causes of cancer. To some.Q (Liesse. author. the ads represent marketing’s greatest contribution to society (Smith. a Chicago-based medical activist. 2001. and the temptation toward exploitation is real. 1994). . Think Before You Pink has drawn a causal connection between beauty products and breast cancer. Marriage of strange bedfellows
The first issue is a marriage of strange bedfellows. even presenting it. 1990.Q (Ehrenreich. It is a fine line between the two. triggering charges of base profiteering from human suffering (Garfield. Negative reactions are rooted in ethical concerns raised most vocally by parties outside these arrangements. the NPO receives human resources in the form of new volunteers and advocates for its cause. after the fact. thereby saving many more lives than treating the disease. An issue that arises under such circumstances is whether the project is about advocacy or exploitation. CRM ads.Q (Ehrenreich. NPOs and corporations may not be completely open and forthcoming to the public
. p. .2.3. the other. Quentin Young.the breast-cancer cult serves as an accomplice in global poisoning—normalizing cancer. Underlying these criticisms is the question of whether the differing interests can be reconciled without serious compromise to one. educate. as a positive and enviable experience. Breast cancer campaigns have received some of the harshest criticisms. said the American Cancer Society has a: b. for instance.
7. and breast cancer survivor Barbara Ehrenreich characterizes this culture as infantilizing women. and are finding ways to address them. . . p. Ethical issues surrounding CRM
The nature of CRM triggers a range of reactions. 53) Another charge is that breast cancer CRM obfuscates important issues.Q Journalist. ACS policies are further exemplified by allocating under 0. wrapping themselves in the cloak of dpublic serviceT for corporate benefit. Recent examples include issuing a joint statement with the Chlorine Institute justifying the continued global use of persistent organochlorine pesticides. such as lessthan-expected funding for the cause. profit and non-profit alliances are at best complicated and at worst unworkable. 53)
7. Observers such as Don Schultz of Northwestern University’s Medill School of Journalism view the marriage as unholy: bThe lines are being blurred by for-profit organizations who are trying to profit from nonprofits. .
these implications can be categorized as more versus less favorable. Why. its smoking cessation product. CRM campaigns do not always detail the specifics of an agreement. is debased into utilitarian trade. rebelling against this debasement. Buying a product that supports a social cause is a way of injecting social and personal meaning back into the marketplace (Brown. from love and sex to friendship and work. Reflecting the polar reactions to CRM. However. In reality. American Express spent $6 million on advertising while generating $1.4.). few individuals are able to volunteer for charities or write hefty donation checks. Fleetwood.Q Attorneys general of several states found the claim a material misrepresentation of the company’s relationship with the non-profit. rather spending $6 million in advertising in order to raise $1. a consumer would have had to use an American Express card 500 times. it is easy for them to overlook the financial equity to all parties. Social implications of CRM
Beyond the ethical issues surrounding CRM. spawning several imitations. did American Express cap its annual contribution to $5 million at the inception of the campaign. In particular. all exchanges. By participating in CRM projects. and thereby fetishizes. American Express’ bCharge Against HungerQ CRM raised $5 million a year for the anti-hunger non-profit Share Our Strength. paying over $2 million for ads to clarify the nature of the agreement (NonProfit Times (n. Since consumers do not always know what is the agreedupon share of sales that goes to NPOs in CRM arrangements. it could be questioned whether the Statue of Liberty restoration would have been better served through a $6 million (or even a $2 million) grant. elevates consciousness about the needs of fellow humans. however small the amount. consumers help humanize what would otherwise be a purely instrumental transaction.7 million for the cause.
8. Advertisements claimed that NicoDerm and the American Cancer Society were bpartners in helping you quit. By tying charity with an everyday act. however. there are broader social implications. 2001). Favorable implications
CRM arguably fills a unique void within the marketplace: It gives consumers a chance to help the less fortunate and do so in regular and convenient ways. CRM provides opportunities for individuals in their ordinary routines to also be caring citizens. The latter would be of greater value. regardless of the level of sales generated? In the case of the company’s more famous Statue of Liberty campaign. 2004).7 million. A lawsuit was filed and SmithKlineBeecham settled. in a sense. a frequency that could be interpreted as ludicrous and gouging (Gross. This meant that to give $5 dollars to the renovation. the firm was granted a license to display the American Cancer Society logo on packages of NicoDerm.
M. Financial equity
The fourth ethical issue is financial equity. A shopper can buy a container of yogurt and. C. There is also the issue of equity to the consumer. In 2003. To the degree that the giving. However.
7. meaning that transparency and full disclosure can be the exception. Pracejus. developed. promising one cent for every use of its card. it was asked. 2003). namely shopping. and approved NicoDerm. the agreement was for the company to pay the American Cancer Society an annual fee to put its logo on certain products. and asserted that it misled consumers into thinking the American Cancer Society researched. Olsen. A notable example is pharmaceutical company SmithKlineBeecham’s licensing relationship with the American Cancer Society.d. In 1998.
8. Nakata budget for a national marketing program. consumers are susceptible to profitequals-price (PEP) and profit-overestimation effects. in the process.450 about all elements of each campaign. Berglind. but consumers are sometimes too hurried when making purchases to figure the size of their individual donation. Six million dollars may be a standard
. and Brown (2003) concluded that some CRM campaigns rely on consumer misunderstanding about the donations. Karl Marx argued that consumerism glorifies. a counter perspective holds that when individuals purchase a product as an act of charity. & Roberts. In a time-pressed and economic-uncertain age. support hunger relief or breast cancer research through a purchase-based donation. In a study on this issue. they are. CRM can contribute to a more compassionate marketplace. every interaction. CRM gives consumers a chance to assert that they are more than just economic beings. gratifying more than the self. the bCharge Against HungerQ campaign has raised questions. thus. It is widely considered one of the most successful CRM campaigns.1. The PEP effect occurs when consumers are confused about whether a percentage of profit or price is given to the charity. American Express engaged in another Statue of Liberty CRM.
but the stigma of homosexuality and illicit drug use made HIV/AIDS causes unpopular for awhile. 2001. desensitizing the public to social ills and increasing resistance to giving. want and will reward corporations that are ethical actors. Fortunately. ConAgra. and survivors. In the long run. increased awareness of breast cancer and count the dollars raised to diagnose and treat the disease. as illustrated in Table 1. and Internet advertising. or because they believe they have already donated enough. Between 1975 and 1990. 2001. p. A second implication is that if CRM becomes highly ubiquitous. despite equal or even greater need or merit. What
Consumer attitudes toward businesses pre. 2001 (March 2001) 58% 48% — 40% Post-September 11. cancer foundations. however. In the 1970s. even though one in ten women suffered from the disease. fatigue refers to a condition whereby donors become overwhelmed by requests for their charitable dollars. disfiguring. 2001(July 2002) 84% 77% 75% 66%
bA company’s commitment to social issues is important when I decide. In 1983. Adult hunger is numerically a larger problem: there are 5 million adults versus 2. by 1999. As part of the procedure.com). 53). and survival rates have increased dramatically. doctors. endured in silence and euphemized in obituaries as a dlong illnessT.S. The firm has adopted hunger as its social issue. or compassion. Less favorable implications
One less favorable social implication is that CRM may distort the pattern of giving. print. 78% of women with breast cancer survived with treatment. but on childhood hunger. The corporate governance scandals and ethical lapses of the past few years have only fueled the demand for more responsible business practices. breast cancer was barely a whisper in American society. www. ConAgra’s CRM focuses not on hunger in general. but perhaps suffers from less appeal. or even revulsive? For many years. ambivalent. then. ba dread secret. in the long run. for instance. whereas from 1990 to 2000. the originators of the California AIDSRide charity event could find only one corporate sponsor. Testing rates for breast cancer were low.04% annually.and post-September 11
Pre-September 11. In response. consumers are more likely to buy from corporations associated with a cause or issue (www.com/Pages/pr_13. Like TV. treatment options have improved. and chest muscle. radio. Ultimately. this has changed. illustrates how certain causes may be selected over others. have exactly the opposite of its intended effect.S.2. some causes will prosper while others will languish. doctors removed breast tissue. it may. We can cite. the death rate due to breast cancer rose .Q Which companies I want to see doing business in my community Where to work Which products and services to recommend to other people Which stocks or mutual funds to invest in 2002 Cone Corporate Citizenship Survey. firms would be encouraged to expand their socially directed activities. CRM campaigns may bombard people with their pleas for attention. a large U.html. the mobilization of resources around the issue by corporations. including CRM. disadvantaging less attractive but nonetheless worthy causes. In 1993. Adult hunger is no less worthy of cause dollars than childhood hunger. It is not difficult to imagine CRM campaigns interjecting themselves into the millions of purchase transactions that take place each day.coneinc. If CRM continues to grow at its rapid clip of $200 million in spending per year.7 million children who go to bed hungry every night. Consumers. Treatments such as the Halsted radical mastectomies were drastic. Today. society should benefit. Researchers have observed that corporate citizenship survey numbers changed significantly after the terrorist attacks on the World Trade Center and Pentagon. . specifically.
. This inclination has been amplified since September 11.
8. Giving. there were no CRMs focused on AIDS. The 2002 Cone Citizenship Survey indicated that 84% of U.coneinc. and breast cancer CRMs has likewise undoubtedly contributed to lives saved. breast cancer is discussed more openly. Non-profit development officers and fundraisers typically use the term in relation to large corporate donors. that rate had risen to 87%. What happens to causes that do not elicit such deep emotional responses as does breast cancer? What is the fate of causes that are complex. individuals may simply tune out and say bnoQ because they cannot process each and every request.Q (Ehrenreich. but it applies equally to the more numerous small donors. the rate decreased 23%. . food corporation. Lives were saved by the hard work of researchers. we look to historical examples of CRM to evaluate its social worth. Interestingly. lymph nodes. and often ineffective. Based on these survey results.Cause-related marketing: More buck than bang? Another social implication of CRM is that it can encourage corporate citizenship and social responsibility among businesses.
these managers possess a personal commitment to the social agenda behind the CRM project because. the prudent course may be to recognize its potential for good. which presumably include CRM. raise sensitivities: the sensitivities of those who are sympathetic. This long-arm relationship between givers and recipients potentially undermines the morality of the donation act by relieving givers of any true authorship for their conduct. Given that CRM is taking root. Perhaps the guiding rule is if you have to explain the connection. The company’s product must be sold. the creative execution must deepen the commitment of the first group while ameliorating the objections of the second. 2000. 1996). a faceless. C. and Sesame Street is a children’s public television program. Sunbeam was led by a CEO with a public persona of being uncompassionate. p. these executives can sanction and direct internal resources. bthe essence of morality is found in the motive responsible for the action. but
. Chief executive and operating officers can lend legitimacy to CRM campaigns by signaling to the ranks below that they and the firms really do care about social needs. This is contrary to the thrust of any CRM. nameless abstraction (Smith & Higgins. Often. charity? According to Kant.
9. An act is only moral when it derives from a sense of duty. through overuse. Since both groups are likely to be exposed to the campaign. With that in mind. erode over time. or spoken to directly by givers is. a consumer can buy an item and justify it by rationalizing some of the proceeds go to the needy.
9. 315) Applying this Kantian notion. as well as those who are antagonistic. the fit between cause and company is likely poor.1. Additionally. Under CRM. we make several recommendations for more effective and thoughtful development and use of CRM. Social issues.452 happens when consumers tire of paying a premium to help others? Is giving fatigue CRM’s ultimate future? It may come to pass that any strategic advantage cause-related marketing grants will. Along with the upward trends described earlier. By contrast. the execution must
9. CRM has been critiqued for distancing the needy bother. then. in effect. One study reported that top managers are more actively involved in CRM campaigns compared to standard. since it is as much about the giver satisfying the self as it is about altruism? Also. 2000). Suggestions for developing and using CRM
CRM is not a neutral instrument. however. Carefully pair cause and company
Another recommendation is to carefully pair the cause and company. having never been met. laying off thousands of workers while continuing to enjoy a healthy salary. Despite this complexity and controversy. whether monetary or human. The notorious Sunbeam-American Medical Association CRM failed in part due to a perceived incongruence between the two partners.Q (Smith & Higgins. mostly because they must achieve multiple objectives. but so too the social issue. on the contrary. and offers clear benefits to NPOs and businesses. The last and perhaps most subtle implication is that CRM may diminish the compunction of individuals to act magnanimously toward others without expectation of return. can we classify CRM participation as virtuous. having grown up in the tumultuous 1960s. a recent survey by the Public Relations Society of America found that most companies plan to expand corporate social responsibility endeavors. the CRM between Toys R Us and Sesame Street reflects a more obvious and intuitive partnership.2. CRM may work counter to self-sacrificing sentiments by substituting consumption for morality (Smith & Higgins. touched.Q who. 2000).
9. Thoughtfully develop the creative execution
Social campaigns are more challenging than standard campaigns to conceive and produce. there must be involvement of top management. It raises social and ethical issues. A percentage of the sale of each Sesame Street licensed toy at Toys R Us goes to pay for the program. toward CRM efforts. it is likely to grow. Because of their powerful positions. Toys R Us sells toys. but follow a regimen or set of guidelines that would better ensure realization of this potential. Berglind. At the same time. there is little reason to believe the practice will be abandoned any time soon. Involve top management
For a CRM campaign to succeed in not only raising financial and non-financial support for a cause. Nakata also transforming a corporation’s culture and moving the business toward an enduring commitment to social responsibility. they believe individual and collective activism can make a positive difference.
M. Is it still.3. It was not readily apparent why a not-for-profit medical organization would lend its moniker to a maker of toasters and eggbeaters. non-social advertising programs (Drumwright.
Giving USA 2004. or offensive in the presentation? If so.). (2004. 28. Retrieved December 31. & Femina. We suggest applying considerable time. Journal of Marketing. Brown. Whichever perspective one has. M. practice. February 17). (1994). A. Develop and use a code of CRM ethics
Due to the potential for abuse. (n. AAFRC Trust for Philanthropy. R. & Kotler. P. Journal of Public Policy and Marketing.html Olsen. We’re good guys. K. (n. G. Burlington. Journal of Public Policy and Marketing. It can. CA7 Sage Publications. NPO. preferably discarded. Gard. coneinc. 47 – 59. Marconi. Drumwright. Offensive ads worth poke in the for eyes. programs. CRMs would better serve participants and recipients if there were a specific code of ethics and compliance with that code. A. Roderto. D1. (2003). R. (1996). N. be equal amounts of both.com/ id/2093339 Hoeffler. MA7 Elsevier. 226 – 238. Journal of Public Policy and Marketing. New York7 McGraw Hill. at minimum. Harper’s Magazine. W. Profits for nonprofits: Find a corporate partner. 70 – 180. Business Week. 39(3). such as nondisclosure or misrepresentation of the exact nature of the corporation-NPO agreement. paid ads blurs. 53. 21(1). 304 – 322. Do these respondents find anything disingenuous. Lee. Garfield. If a code of ethics is not developed in the near term. 61(42). & Menon. Complicating matters further is the inclusion of persons affected by the issue. (2004). If properly handled. ingenuity. Think Before You Pink. McLaughlin. E.
9. hurting the cause. (2002). it would be a first step toward acknowledging and discouraging campaigns that profit through deception. & Brown. 2002 Cone corporate citizenship study. Smith. Cause related marketing: Who cares wins.4. P. 2004. & Ross Jr. cause-related marketing is here for the time being.html Creyer. Gross.e.. A typology of consumer responses to cause-related marketing: From skeptics to socially concerned. D. E. D. Tanen.. 44. from http://www. Marxism and critical realism.msn. H. Chicago7 Dearborn Trade. therefore.d. While there is debate about the efficacy of any ethics code (a code did not prevent the scandals that recently swept through the accounting profession). When profit equals price: Consumer confusion about donation amounts in cause-related marketing. W.. (1994). & Simons.). New York7 Routledge. J.). K. 105 – 116. and effort to the task. 65(4). N. (1988). We have reviewed the concept. Homewood. D. (2002). (1999). J. Making money while making a difference: How to profit with a nonprofit partner.. IL7 High Tide Press. these executions typically take much longer to assemble than other marketing programs. Advertising Age. C. generation of concepts. 7(2).
. such as an HIV infected individual for an AIDS CRM.. 22(2). it may fail on several fronts. Steckel. Cause marketing: Build your image and bottom line through socially responsible partnerships. Line between public service. The new corporate philosophy. (2003). Fleetwood. and social and ethical issues of cause-related marketing. A. serving commerce more than society. Marketing Letters.. (1999). Advertising Age. (2000). otherwise it is perceived as hype. & Roberts. (1999). L. (2002).thinkbeforeyoupink.. (1996).. (1990). Smith.. Company advertising with a social dimension: The role of noneconomic criteria. benefits. While CRM may be viewed through a critical lens as antithetical to true morality and. from http:// www. 303(1818). Saffir. and open discussion (i. Harvard Business Review.).. Retrieved May 18.d. 60(3).com/Pages/pr13.
Adkins. 52. as well as proposed ways to realize the potential of this controversial marketing tool. B. S. inequitable. (2001). If a CRM is rushed through without sufficient research. Whether and how these persons should be depicted or alluded to in marketing collateral and consulted regarding the campaign are difficult decisions to make in the development of creative executions. L. Retrieved May 18.Cause-related marketing: More buck than bang? convey authenticity and genuine regard for the social issue. Ehrenreich. Webb. Building brand equity through corporate societal marketing. T. (2002). 17(2). Cone Communications. and firm through negative public responses. N. NonProfit Times. Journal of Marketing.. & Mohr. instead. 3909. R. 71 – 87. 72(3). Social marketing: Improving the quality of life (2nd ed. from http://slate.. Inc. N.. (1998). Operation just cause: In the name of helping lady liberty. A. bridging what is traditionally a wide divide. & Higgins. A sniff test could involve a simple survey or set of focus groups to assess consumer reactions to the campaigns. 2003. Is your grocery list politically correct? Wall Street Journal. 72 – 73. Consequently. Harvard Business Review. 173 – 185. Cause-related marketing: A co-alignment of marketing strategy and corporate philanthropy.org Varadarajan. 2004. the reaction may flag an ethical lapse of some kind. 2004. J.. Thousand Oaks. M. Giving USA Foundation. The impact of corporate behavior on perceived product value. pretesting. J. from http://www. S. J. 58 – 74. W. Power public relations. Liesse. Pracejus.nptimes. or an amputee for a landmines removal CRM. J. B. (1992).. R. confusing.com/enews/tips/cause. Simons. CRM initiators should. Welcome to cancerland. & Keller.d.. apply the bsniff testQ to determine if there is an ethical problem in any campaign before public release. R. Business & Society. 78 – 89. it can also be seen as a rare convergence of social and commercial interests. Andreason. (n. 74. CRM need not be more buck than bang. and events.. Cause-related marketing: Ethics and the ecstatic. L. vetting). (2001). J. American Express is reaping lots of publicity. Retrieved May 18. buy from us. S.