Cause-related marketing: More buck than bang?

doi:10.1016/j.bushor.2005.04.008

Business Horizons

Volume 48, Issue 5, September–October 2005, Pages 443-453

https://doi.org/10.1016/j.bushor.2005.04.008 Get rights and content

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 social-ethical complexities. We end with suggestions for increasing the effectiveness of this popular marketing tool and form of corporate philanthropy.

Section snippets

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 “Save Lids to Save Lives.” The arrangement has been very successful, strengthening Yoplait's brand image and sales while increasing public awareness of breast

What is CRM, really?

There are many terms similar to cause-related marketing. Among these are “corporate societal marketing,” “corporate issue promotions,” “corporate social marketing,” “social issues marketing,” “pro-social marketing,” and “passion branding.” We prefer the term “cause-related marketing” because it indicates a focus on a specific cause, not the larger social good. CRM projects are not general “feel-good” or consciousness raising exercises; rather, they are attempts to generate resources, usually

Origins in Rockefeller and American Express

CRM is rooted in the long tradition of American corporate philanthropy. Over a hundred years ago, Andrew Carnegie, John Rockefeller, Henry Astor, and other captains of industry began making sizable financial contributions to start, expand, and maintain museums, universities, and other social and cultural institutions. As leaders of commerce, they modeled the principle of giving back to the commons. Over time, philanthropy became ingrained in the American corporate psyche. Yet giving, then and

CRM trends: Up and away

Since the American Express campaign of 1983, CRMs have taken off. CRM is one of the fastest growing forms of marketing, as reflected in increased spending (Webb & Mohr, 1998). CRM expenditures went from practically zero in 1983 to an estimated $922 million in 2003. Companies invested approximately $991 million in cause campaigns in 2004, a rise of 57% since 1999 (Gard, 2004). In 1983, philanthropic giving totaled $100 billion, and then rose to $241 billion by 2003, representing a 6% annual

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. However, there are many other techniques, indicating that CRM is a flexible tool. The Cause Marketing Forum, a prominent cause-marketing advocate, describes the three most common practices as:

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Transactional programs: This is the classic exchange-based donation. For every unit sold, a corporation contributes a share of proceeds to a particular social cause. An example is candy company

CRM benefits both sides

Proponents and practitioners of CRM maintain that the strategy is very useful. The growing tide of dollars directed to CRM programs suggests this as well. To understand why this trend is occurring, we describe reasons for, or benefits of, engaging in CRM. We begin with those for corporations, and then move on to those for NPOs.

Ethical issues surrounding CRM

The nature of CRM triggers a range of reactions, from positive to negative. Negative reactions are rooted in ethical concerns raised most vocally by parties outside these arrangements. Nonetheless, more sensitive players in the CRM game are also aware of these issues, and are finding ways to address them. We describe these issues because they influence perception, use, and efficacy of these campaigns.

Social implications of CRM

Beyond the ethical issues surrounding CRM, there are broader social implications. Reflecting the polar reactions to CRM, these implications can be categorized as more versus less favorable.

Suggestions for developing and using CRM

CRM is not a neutral instrument. It raises social and ethical issues, and offers clear benefits to NPOs and businesses. Despite this complexity and controversy, there is little reason to believe the practice will be abandoned any time soon; on the contrary, it is likely to grow. Along with the upward trends described earlier, a recent survey by the Public Relations Society of America found that most companies plan to expand corporate social responsibility endeavors, which presumably include

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Cause-related marketing: More buck than bang?

Abstract

Section snippets

Cause-related marketing: An overview

What is CRM, really?

Origins in Rockefeller and American Express

CRM trends: Up and away

CRM practices: One size does not fit all

CRM benefits both sides

Ethical issues surrounding CRM

Social implications of CRM

Suggestions for developing and using CRM

Cause related marketing: Who cares wins

Profits for nonprofits: Find a corporate partner

Harvard Business Review

Marxism and critical realism

The impact of corporate behavior on perceived product value

Marketing Letters

Company advertising with a social dimension: The role of noneconomic criteria

Journal of Marketing

Welcome to cancerland

Harper's Magazine

We're good guys, buy from us

Business Week

Offensive ads worth poke in the for eyes

Advertising Age

Building brand equity through corporate societal marketing

Journal of Public Policy and Marketing