Does Cause Marketing Violate The Primary Goal of the Firm?

Cause Marketing vs. the Primary Goal of the Firm

One of the biggest selling points for a company to take on a cause marketing program is the boost the campaign can have in the company's public image.  The alliance may have that effect, but is that worth the campaign?  For those who may be unfamiliar with the PGF, it has been defined as such: The primary goal of the firm is shareholder wealth maximization, which translates into stock price maximization.  Furthermore, the firm should not presume it knows how to spend the owner's money better than the owner does.  Any investment in a company is solely there to earn the greatest return possible.

In light of this, can cause marketing be justified?  Yes, and it is a result of the way the campaign is defined.  I may not score any points with the non-profits out there for this, but there is no place for corporate philanthropy.  Giving grants away may be a worth while endeavor, but it should be left to the individual, not the firm.  Cause marketing differs in that it should be a gift from the consumer.  Consider the following types of cause related endeavors:

purchase plus - Round Up: Customer has the option to round up their purchase to the next dollar by donating the excess change to the cause. OR Optional Flat Rate - Upon making a purchase a customer has the option to donate a predetermined amount (let's say $1) to a cause.

product sales - In this case, the $1 donation per purchase is worked into the retail price of the item (cost + donation).

Other options could be cobranded events, programs, or certain licensing agreements.  These different campaigns are fully explained and illustrated in a book I highly recommend to anyone looking to consider cause marketing, Jocelyne Daw's Cause Marketing for Nonprofits: Partner for Purpose, Passion, and Profits.

Cause related marketing has shown to raise sales and influence buyer behavior, but we as marketers can not fall to violate the primary goal of the firm.  We are after all in the business to make money.

So the latest addition to the Product (Red) portfolio is Starbucks (RED). May I suggest Me (RED)?

(RED) has always been a favorite of mine in the sense that it is, in the words of Bono, commerce, not charity.  Results show the positive impact cause marketing can have through building brand relationships with charitable causes, but less often is "the cause" turned into "the business."  Such an adaptable business model can work anywhere though, even on a personal level.  From the perspective of Chris Anderson's The Long Tail eventually marketing efforts become less and less about ties to companies and more and more about personalized messages to each individual. If this is the case, can we take the next step and create personalized Product (RED)?  What if there was a national database for pre-tax direct deposit distributions out of someone's paycheck?  Someone could give around $5 a week out of their check between the 401(k) and health insurance withdrawals without missing it, and in turn provide life to someone in Africa.  Talk about making a difference.

That time of year again...

It has come to the time of year when ad agencies everywhere break out Carol of the Bells to soundtrack the latest brands and products looking to make an impact during the shopping season.  Here are a list of some you may have seen:

While these may be cute and even successful in marketing terms, there is also a huge market in this season for cause related marketing.  Consider this video to the tune of...you guessed it:

Still, we have yet to see an ad set to my personal favorite, George Winston's version of Carol of the Bells.  Maybe this is an opportunity for your cause.

Cause Marketing Can Give Sales a Boost

In these tough economic times, companies are looking for any edge.  This study shows that cause marketing can do more than create emotional warm fuzzies for the consumer.  It can actually help the bottom line of companies.  A well run campaign makes real financial results that benefit all involved.  While broad popular causes like the Susan G. Komen breast cancer organization can be popular ways to lift sales, consumers are looking for ways to customize their giving.  As companies develop more personal customer experiences, the giving in a cause campaign also needs to be customizable.  Consider GOOD magazine for those "who want to live well and do good."  This media company serves as a forum for organizations, people, and causes that create a better community.  As consumers pay for their subscription, 100% of the fee can be sent to the charitable organization of their choice.  These types of customized and innovative transactions can be just what companies need to help survive these tough economic times.

Get Ready for the Halo's

Click here to see what previous campaigns have made a huge difference through cause marketing.  The Halo Awards will be accepting entries for the next round starting in December.  Now is the time to start reviewing successful plans or launch those end of year initiatives.  The Cause Marketing Forum is the leading hub for cause related marketing efforts.  The Halo Awards truly show how marketing can do more than just make money for a firm.  

Armstrong to Brandgelina; Top 10 Cause Marketing Stars

Seems like the uber-Hollywood/child rearing/actor/socially minded couple couldn't muster up enough juice between the two of them to take down perennial winner Lance Armstrong from this years top 10 Cause Marketing Stars.  Lance came in first ahead of Jolie, while Brad came in a disappointing 6th.  Below are the stars and their respective cause, continue to the article to see others mentioned outside of the top 10.  One note to consider, as Barry Janoff writes in the article, "According tot he survey, 73.8% of those who responded said their personal opinion about a celebrity spokesperson, be it positive or negative, directly affects the perception of the cause marketing campaign they support."

1. Lance Armstrong - Livestrong
   
2. Angelina Jolie - UNICEF
   
3. Bono - (RED)
   
4. Tiger Woods - Tiger Woods Lerning Center/Foundation
   
5. Bill Gates - Various causes, largely funded from the Bill and Melinda Gates Foundation
   
6. Brad Pitt - Rebuilding New Orleans
   
7. Al Gore - Global Warming
   
8. George Clooney - Darfur
   
9. Michael J. Fox - Parkinson's Disease
   
10. Peyton Manning - PeyBack Foundation
    

Market Research 2.0

What do Kevin Bacon, 111 shirtless men, and a cuddly penguin have in common? These are all elements of a connected society formed through traditional and electronic networks. Each represents an opportunity for a marketing manager to tap into through the effective use of market research tools.

Remember Six Degrees of Kevin Bacon? Any actor in the history of film is connected to Kevin Bacon through a network of other actors who performed together in various movies. Have you ever heard of a New York City based actor/comedian named Charlie Todd? He puts out a requests on his website, Improv Everywhere, for all kinds of people to join him in pulling off mass stunts to the amusement and bewilderment of onlookers. This included one where over one hundred men removed their shirts and proceed to shop at a local Abercrombie & Fitch store heavily decorated with images of partially clothed males. Finally, there is Tux, Linux’s cute penguin mascot. Tux represents a revolutionary way to handle business in an open and connected society through crowd sourcing. These three examples begin to help us understand social networks, and how they can be utilized for conducting market research in innovative ways.

To explore the innovative possibilities that social networks can play in market research The Strategic Research Model for Innovation was constructed to illustrate the different methods and tools available. At the base is the consumer, or more specifically, their knowledge. The marketing manager works to learn from the consumer and gain their insights, opinions, and desires. The spokes radiate outward forming multiple venues for this transaction of information to occur. Finally, what keeps all of these communication methods working is the outer rim, which lists the criteria to keep the research effective. As this model is analyzed, companies will find new and effective ways to use ever-evolving tools, with controlled standards, to reach their customer base and tap into the resource of their knowledge. Also, researchers should want to have a fairly good foundation in the knowledge of the networks they find the target consumers located in.

CONSUMER
This model starts with the consumer, whether they are or are not already a customer. In this way a healthy balance between nurturing existing customer relationships and fostering new relationships can take place. The wealth of knowledge extends from why this product or service was chosen to what makes something else more enticing and to the opportunities to make more consumers consider new options. Furthermore, good research can lead to a greater understanding, not only of the characteristics of the product, but it can also bring out the idiosyncrasies of the consumers as well.

TOOLS
Radiating outward from the consumer are the different tools accessible to the marketing manager when conducting research. These methodologies all find various ways to connect with the consumer and when used in concert can really produce a holistic picture of the current market and what aspects the company is excelling at as well as the opportunities to capitalize on. Surveys, Observational Research, Focus Groups, Membership Programs, Word of Mouth, Internet Communities, User Generated Content, Crowd Sourcing, and Flash Mobs will all create forums for dialogue and interaction between the company and consumers, which will be valuable to study in market research. They are however listed on a scale of innovation beginning with the most familiar working towards the most creative and since this post focuses on 2.0 applications, the discussion will forego the traditional types and begin with word of mouth.

It has long been said that word of mouth is the best form of advertising, but marketing managers have repeatedly struggled with how to implement a campaign that effectively creates a positive message worthy of spreading through word of mouth. Historically some of the issues that have lead to struggles with Word of Mouth campaigns are that the information just isn’t newsworthy, and therefore lacks the spark to carry it very far. Also, the message could be so overly scripted by the company that it comes across as contrived and instead of flowing naturally, it appears that the company has been trying too hard. The most successful viral campaigns involve a collaborative effort where the consumer takes part in the creation and dissemination of the project. This way they are apart of the project design rather than the target of the design. Some companies have attempted to utilize this method of viral advertising through brand-based video or gaming, which is more likely to be passed on to another and mentioned in casual discussion.

With the increase in popularity of social network websites such as MySpace and Facebook, some marketing managers have taken to creating Internet Communities. A Facebook user can share a new Blizzard treat with friends every month courtesy of Dairy Queen, ABC allows followers of the show LOST to log on to the official MySpace page and chat with other fans about clues and plotlines, and companies have begun to take their real world transactions into the cyber-world of Second Life and conduct business virtually. While some sites allow opportunities to present the company to new audiences, they are limited to that one location on the Internet. The beauty of a site like del.icio.us is that it can allow the company to access every site from one location through tagged bookmarks made available to everyone, anywhere. Conversely, a marketing manager can review what customers are saying as well. So the discussion from a site like this can be more comprehensive and more efficient for the time and effort. The next generation operates and processes everything in an environment of networks so familiarity with these tools will aid the market researcher in achieving the research goals. A company with a cult brand for instance, might go as far as to create their own branded form of a networking website in order to have more control over what information can be gathered from its members.

User Generated Content is by definition content, whether text, photo, video, or other, which is posted to public sites that is created by the end user or consumer. Google’s Blogger, photo sharing on Flickr, or posting a video to YouTube are all creative outlets to foster a discussion between a corporation and its customers on the way a brand is marketed, the value of a particular product, or the level of quality in a service. Companies have found very creative responses from consumers to their products, both for the positive and the negative. One vital factor to appreciate with any user-generated content is that neither the company nor the administrators of the site itself set the agenda or the topics covered. It is largely based on the whims and feelings of the consumers at large. In this way, reading blogs or following tags on Flickr will show what is happening at this moment, but stepping back to review threads or archives can also indicate trends and cycles. Also, blogs do not have the deeply imbedded notions of what news is, like traditional media services. More and more, user-generated content is beating the major news outlets at breaking a story due to their flexibility and pervasiveness.

Crowd-Sourcing or Open-Sourcing is a great way to utilize the public in a focused manner. One of the most popular outlets for this type of work is the freely editable online encyclopedia known as Wikipedia. The term wiki is derived from the Hawaiian word for quick. Considering the growth of Wikipedia, it quickly becomes apparent how this translates. With anyone allowed to edit and add entries, articles can grow overnight leaving the whole database spreading like wildfire. With this fast growth and open cooperation, there is a clear draw back in quality control. Two other projects that have been able to capitalize on Crowd-Sourcing while maintaining high standards are Linux, as mentioned in the introduction, and the Human Genome Project. This responsive support can create brand cultures though that really invests the customers in the well being of the company since they take ownership through the collaborative work they provide.

The final resource listed is the creation of a Flash Mob. A deeply connected society can do more than just converse, it can take action. This concept was created by Bill Wasik, editor of Harper’s, as a new form of performance art. A public invitation can be sent out in virtually any way. Some have used blogs, advertisements, and even the Doonesbury cartoon. The groups purpose can be made clear at the outset, or like Charlie Todd of Improv Everywhere, the purpose of the goal could be withheld until the time of action to preserve the impact of the surprise. As of yet, this method has been used primarily for social action and entertainment. However the possibilities for this type of spontaneous social production can be utilized in other ways. For instance, a marketing event such as Red Bull’s Flugtag could be announced with the expectations that it would be carried out in the spontaneous manner of a flash mob.

EFFECTIVE CRITERIA
As tools are implemented to draw insights out of the customer, standards are applied to carry out an effective research session. Research should be Interactive, Relevant, Effective, Timely and Innovative. The first three mentioned are constant elements. This means that in general when conducting market research it is best to always maintain an Interactive environment that goes both ways, and in particular allows for the consumer to have the priority. Second, the researcher should always use relevant methods and questions. When considering the options for tools, conducting a flash mob might sound like an enjoyable project, but it might not have anything to do with the research at hand. The third constant element requires the research to be efficient in gathering the needed information. This has a lot to do with the manner in which the plan is carried out. Many companies have created profiles on social network websites simply because the competition had as well, but they have not implemented successful strategies for making those profiles productive to the bottom line or helpful by providing good customer insight. Blind implementation of new technology will tend to devalue a brand rather than make it stronger, and it typically will muddy the waters as market research is conducted. The final two elements of Effective Criteria are on a sliding scale. The point on the continuum the marketing manager decides to conduct research in regards to Timeliness and Innovation is based on the type of research, the subject matter, and the demographics of the consumer being pursued. It is the more innovative approaches though, that can act as an incubator to launching novel and highly profitable goods and services to market.

CONCLUSION
There are certainly opportunities to uncover valuable insights through the traditional and familiar styles of research. With the cultural shifts toward more connected social networks, successful implementation will open up the possibilities for dialogue with so many more customers and potential customers. In practical terms, the ability to evaluate a product’s history and estimate future demand have the potential when processed correctly to more than cover the expense of the initial research. Also, the increased connection to the customer base will build loyalty and cultivate customer relationships that extend much longer. With each generation growing up in an increasingly integrated and electronic world, there maybe a point in the near future where these new innovative electronic tools for research become imperative to gain a full perspective of the customer’s understanding of the world. Moreover, the opportunity to have an ongoing conversation will develop a friendly collaborative relationship where both have a stake in the survival of the company. The vital importance of this research was summed up by a Next-Gen’er, Michael Furdyk, in the book Wikinomics, when he proposed that the next generation doesn’t trust the media and its messages. Instead, Furdyk goes on to say that they choose to put their trust in the opinions of their social network peers. The significance of this outlook cannot be understated to the marketing manager. Quality marketing based on good research will put everything into perspective, which inherently will be the perspective of the customer. And in today’s culture, the consumer sees everything in the realm of a networked ideology.