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Inundated by marketing for causes, can people still be moved by corporate do-gooders?
If there’s a message that’s sincere, transparent and meshes with a brand’s own values, chances are they can, said marketing executives and social responsibility experts who met to discuss the issue. But if cause-related marketing is perceived primarily as an attempt to move a brand’s merchandise, it is likely to be a lot less successful, or even an outright failure.
It can be a fine line to tread, particularly when money is being raised by high-profile brands like those contributing to the (Red) effort for The Global Fund to Fight AIDS, Tuberculosis and Malaria. Those brands include Gap, which is donating 50 percent of the gross profit from its (Red) holiday apparel sales to the cause; Emporio Armani, which is kicking in 40 percent of its (Red) fashion profit this season, and Motorola, which is giving $8.50 of the proceeds from each (Red) RAZR it sells nationwide.
(Red’s) moves to raise funds and awareness to fight AIDS has received mixed responses, said (Red) president Tamsin Smith, with “some younger people feeling it was completely cynical,” and “some other people feeling it’s positive that we are doing something.”
In an interview after participating in the discussion, Smith said, “We’re moving from the marketing of egos to the marketing of values, so [we’re] going to draw some controversy.”
Mike Indursky, chief marketing and strategic officer at Burt’s Bees, said, “I pity the company that thinks ‘What green event can we do?’ How sad.”
Burt’s Bees is lobbying in Congress for passage by mid-2008 of a bill that would require products labeled “natural” to be at least 95 percent natural and the companies offering such products to make at least 60 to 65 percent of their goods worthy of the natural designation in order to get the seal.
Timberland is a corporate do-gooder Indursky admires, a nod he gave during the group discussion sponsored by Self magazine, where participants were asked to name some favorites. Also earning a thumbs-up from the group were Wal-Mart, for its moves to recycle and renew resources; Sony, for recycling parts of used electronics, and Starbucks, for the straightforward way it has been communicating its programs aimed at doing good. (Like WWD, Self is published by Condé Nast Publications.)
This story first appeared in the October 31, 2007 issue of WWD. Subscribe Today.
Indursky applauded Timberland’s “transparency” in talking about how it’s trying to stop using polyvinyl chloride in its shoes — “one of the worst [most toxic] plastics you can use,” he said. The manufacture of PVC releases the toxic chemical dioxin, according to Greenpeace. During its use and disposal, PVC can leak harmful additives, such as compounds containing chlorine. The plastic is used in a range of products, including imitation leather, credit cards and bottles.
“Wal-Mart is doing a good job of going green and communicating it well,” and Starbucks is refraining from being “boastful” about programs such as fair trade coffee sourcing and renewing energy, said Brian J. Maynard, global director of corporate social responsibility at Whirlpool.
For example, Starbucks estimated that, in 2006, renewable energy accounted for about 20 percent of the power used in its company-operated stores. For purchasing so-called green power, Starbucks was named one of the Environmental Protection Agency’s Top 25 Green Power Partners, a citation posted on its Web site, but buried deep in the social responsibility section.
“Other companies spend a lot more money being boastful,” added Maynard, whose own company has publicized its contributions to Habitat for Humanity’s Blitz building project in press releases, on Whirlpool signs at Habitat construction sites and at special events, such as mentions by project sponsor Reba McEntire at her concerts.
Whirlpool dedicated 100 of its 28,000 U.S. employees to help build nine Habitat houses in a week this year in Guadalupe, Ariz., outside Phoenix. Another 100 employees built 10 houses in Nashville in 2006, and the company expects to provide a third group of volunteers to construct nine Habitat homes in Dallas, for one week, beginning Nov. 17, 2008. From a budget of $1.2 million for its own program called Building Blocks, the company has been spending about $75,000 on raising each Habitat home. This covers the building and materials costs, plus food and lodging for the Whirlpool volunteers, who have worked alongside 200 additional laborers in each locale.
With the ranks of cause marketers expanding, it’s becoming a steeper challenge for corporate do-gooders to stand out from the crowd and still strike the right note (read: not too loud) about being socially responsible.
“It’s a very fine line between showing you’re responsible and pandering to the public,” said Kelly Tackett, a senior consultant at TNS Retail Forward, noting more people are expecting companies to become socially responsible. By 2015, corporate do-gooding is expected to move well beyond the realm of “faddists and activists,” becoming “an integral part of mainstream consumer demand around the globe,” PricewaterhouseCoopers and TNS Retail Forward projected in their joint May 2007 report, “Retailing 2015: New Frontiers.”
There are indications as many as one-third of U.S. adults are already taking social issues into account when deciding what to buy, compared with the two-thirds of adult shoppers who consider business practices like fair value, decent service and high quality, according to the 2007 Cone Cause Evolution Survey. In addition, eight in 10 say a company’s commitment to social issues affects whether they would like it to do business in their communities, the study showed.
Such inclinations could bode well for (Red), for one, which is trying to provide people with an immediate way to do good. Since its fund-raising launch in March 2006, the group has donated $45 million to the Global Fund — all of the money spent by consumers on (Red)-branded items offered by partners such as Gap, Emporio Armani, Converse, iPod, American Express and Hallmark, Smith said. The Global Fund has disbursed $30.8 million of the $45 million raised, to help AIDS and HIV-positive patients in Rwanda, Ghana and Swaziland. By (Red)’s account, this represents a sharp upswing from the private sector’s $5 million contribution to the Geneva-based global fund, founded by former U.N. secretary-general Kofi Annan, in its first five years.
The remaining $14.7 million in (Red) donations to The Global Fund will be given to yet-to-be-found grant recipients deemed worthy by the group. Interest generated by The Global Fund’s $7 billion in monies worldwide, kept at the World Bank, covers the group’s overhead, which is running at about 3 percent of its take, said Julie Cordua, (Red) vice president of marketing.
“Most consumers are moved by the idea that through a simple act, they can do something that’s good for others,” Smith said. Smith spent seven years advocating trade with Africa on behalf of Gap on Capitol Hill before joining (Red), and visited last week with people in Swaziland who have received funds from the project.
New (Red) items angling for holiday shoppers began hitting Gap stores last week, including a women’s long military coat ($188), a women’s military sweater ($178) and a men’s leather jacket ($298). They are available at gap.com as well.
(Red) holiday goods now on offer also include “Make Mine Red/Create Your Own” custom Chuck Taylor All-Stars, available at converse.com, where Converse tells visitors: “Let our canvas be your canvas and create your own shoes.” Due in December, in support of (Red), are some dressier offerings at Emporio Armani, with suits, dresses and perhaps a tuxedo succeeding earlier items like T-shirts, shorts, watches and fragrance.
“At the end of the day, cause marketing has to contribute to the bottom line, so it’s not for everybody,” Smith observed. It shows signs of working at Whirlpool, where the Building Blocks project has contributed to a 160 percent run-up in awareness of the brand, Maynard said, while the number of existing Whirpool customers intending to leave the brand has dropped by two-thirds.
“Typically, an appliance purchase is one to which people are not emotionally attached,” Maynard noted. “This is a way to be in front of the consumer and drive that loyalty.”