Cause-Related Marketing

Cause-Related Marketing

Altruism. Corporate responsibility. Philanthropy. These are often used to describe cause-related marketing, an activity in which businesses join with charities or causes to market an image, product, or service for mutual benefit.

Embracing a cause makes good business sense. Nothing builds brand loyalty among today's increasingly hard-to-please consumers like a company's proven commitment to a worthy cause. Other things being equal, many consumers would rather do business with a company that stands for something beyond profits.

―In today‗s marketing world, the companies have to be caring and they should look after the welfare of their customers and society‖

1.Cause marketing or cause-related marketing

Cause Related Marketing is defined as ―(A) strategic positioning and marketing tool that links a company or a brand to a relevant social cause or issue, for mutual benefit‖.

―A commercial activity by which business and charities or causes form a partnership with each other to market an image, product or service for mutual benefit‖.

2.Concept of Cause Related Marketing

Cause related marketing can be understood as a strategic positioning and marketing tool which links a company or a brand to a relevant social cause or issue for mutual benefit. It is the initiation and funding of deserving causes. Cause related marketing is a strategic marketing activity a way for a company to do well by doing good-distinct from sales promotion, corporate philanthropy, corporate sponsorship, corporate Samaritan acts and public relations, though it is often an amalgam of such activities. Nothing builds brand loyalty among today‗s increasingly hard to please consumers like a company‗s proven commitment to a worthy cause. Other things being equal many consumers would do business with a company that stands for something beyond profits. In nutshell, cause related marketing results in increased sales, visibility, and consumer loyalty and enhanced company image along with positive media coverage.

3.Indian Scenario

Cause related marketing and its impact on organizational selling and brand loyalty.

1. The HLL announced a contribution of fifty paisa to a diarrhea project on sale of each of its LIFEBUOY brand soap. It helped to improve market share for ‗lifebuoy‗

2.   OBEROI Hotels had specially designed and printed envelopes placed in all Oberoi properties where in the guest could contribute to CRY, a non government organization and collected more than Rs. 6.50 lakhs in 18 months. CRY is a NGO whose role is that of an enabler a catalyst between two groups of people (a) development organization and individuals working at grass root level with marginalized children, their families and communities and people from all walks of life who believe in the rights of children.

3.  In India ‗whisper‗ a brand in the sanitary nappies market where the materialistic difference is minimal announced a contribution of Re 1 on every pack of its sales for blind relief society. It helped to improve market share for ‗Whisper‗

4.   NOVARTIS INDIA LTD. a pharmaceutical company in a cause related marketing scheme donated 2% or value of sales of OVALTLINE PLUS towards CRY‗S (a NGO‗s) Gujarat rehabilitation operations. Total amount raised was approximate Rs. 40, 000

5.                 The HLL announced a Rs. 5/- contribution to SOS children‗s village, a social service organization working for educating every little heart by inserting coupons in its Brook bond Taj Mahal tea powder packs. The customer has to tell the coupon number to the company through a toll free telephone number.

American Express first coined the phrase ―Cause Related Marketing‖ in the 1980s while raising money for the restoration of the Statue of Liberty in New York City. The CRM trend rapidly caught on with corporate in India during the 1990s. CRM became the vehicle by which companies indirectly propagandized their brands and it has provided companies with a new tool to compete in the market. The Principle goal of a Cause Related Marketing program has been to impact a company‗s bottom line through increased Sales. Some of its potential benefits include: Attracting and Retaining Customers, Market Differentiation, out reach to Niche Markets.

The increasing involvement of corporates in philanthropic or socially related causes has led to the growth of Cause Related Marketing (CRM) across the world. Although a phenomenon that had its roots in the western countries, CRM has gained rapid acceptance in India in recent Years. A case inexample for this is Aravind Eye Care, TATA Salt.

The Principle goal of a Cause Related Marketing program has been to impact a company‗s bottom line through increased Sales. Yet research has shown that, for companies committed to corporate social responsibility, CRM programs can offer other, often unanticipated, benefits to a company as well. Long –term impacts such as increased profitability or cost savings are often attributed to the observed changes resulting from effective CRM partnerships. The value realized by Cause Marketing programs will differ among companies and Industries.

How we make cause related marketing?

Find a cause your member can support

Get corporate partner for funding

Engage the media

Generate publicity and attention

Donate funds / volunteers to a worthy cause

4.Some of the potential benefits include:

1.                 Attracting and Retaining Customers

2.                 Market Differentiation

3.                 Out reach to Niche Markets

Powerful Marketing Edge

Cause-related marketing can become a cornerstone of your marketing plan. Your cause-related marketing activities should highlight your company's reputation within your target market. Cause- related marketing can positively differentiate your company from your competitors and provide an edge that delivers other tangible benefits, including:

Increased sales

Increased visibility

Increased customer loyalty Enhanced company image Positive media coverage

By choosing a cause you are passionate about, cause-related marketing is emotionally fulfilling. It's a way to merge your profit center with your "passion center" and build a business that mirrors your personal values, beliefs and integrity. If your cause also resonates with your target market, your activities will generate tremendous goodwill and media attention can be its side effect.

5.Types of Cause marketing

Cause marketing can take on many forms, including:

Product, service, or transaction specific Promotion of a common message

Product licensing, endorsements, and certifications Local partnerships

Employee service programs

Real-World Cause-Related Marketing Success

Cause-related marketing yields mutual benefit. Look for partners with a similar agenda whose goals can be better achieved by partnering with your business. Take inventory of the assets that make you an appealing partner in a cause-related venture.

There are many types of mutually beneficial relationships you can form with your cause-related partner, including special events, sales promotions and collection plans. An easy way to embrace a cause is to team up with a charity.

6.TATA SALT CRM Initiatives TATA – A Profile

Established in 1939, Tata Chemicals Limited is one of India‗s leading manufacturers of inorganic chemicals and fertilizers. Part of the US$ 11- billion Tata Group, the company owns and operated the largest and most integrated inorganic chemicals complex in the country at Mithapur, Gujarat. Its fertilizer complex in Babrala, Uttar Pradesh is known for world – class energy- efficiency standards, and has won several awards in the fields of environmental conservation, community development and safety. Tata Chemicals is today acknowledged as the leader in the chemicals

and fertilizer industries. The company has a turnover of over Rs 1,700 crore and employs about 3,000 people.

CRY - A Profile

CRY is a registered Indian trust working towards building a people‗s movement to restore to India‗s underprivileged children their most basic rights. CRY harnesses the money, time and skills of thousands of individuals and organizations to partner 163 child- development initiatives across India. CRY is governed by values of respect for human dignity, transparency, accountability, secularism, non-violence and the spirit of innovation Tata Salt, the pioneers and undisputed leaders in the packaged and iodized Salt Category, reiterated its commitment to the cause of educating underprivileged children and announced its Desh Ko Arpan Programme. The Desh Ko Arpan Programme, Tata Chemicals Limited Contributes 10 paise for every kilo of Tata Salt, sold during specific periods, to the education of underprivileged children. Child Relief and You (CRY) has been chosen as partners. The money raised was Rs 33 lakhs in a period of one month.

The money raised will support six child – development initiatives across the country, namely:

Lok Shakti Vikas Sansthan, Barmer, Rajasthan Jabala, Kolkata, West Bengal

The Good Shepherd Society, Chennai, Tamil Nadu Gramya, Nalgonda, Andhra Pradesh

The community Services Guild, Namakkal, Tamilnadu Rachana Society for Social Reconstruction, Pune Maharashtra.