Cause Marketing: Case Studies

Introduction

Cause marketing has become one of the buzzwords in marketing with some firms standing out as icons in this arena. The paper shall look at two examples and how they have been successful at this strategy.

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Cause marketing case studies

Prior to an analysis of cause marketing examples, it is essential to understand what this form of marketing entails. It is a form of collaboration between a profit making enterprise and a non profit making one in order to achieve mutual benefits. More often than not, cause marketing is characterized by a relationship between the latter two parties rather than financial dependence (IEG, 2009).

By the end of this year, it is estimated that American companies will have engaged in close to three billion dollars worth of cause marketing strategies thus implying that there is a lot that may be drawing firms to such ventures. The paper shall look at two examples i.e. American Express’ entry into the product RED campaign and Electrolux’s role in the Ovarian Cancer Research Fund Initiative.

Cause marketing does impact upon a company’s revenue generating abilities or its profit making ventures as seen through the performance of both product RED and American Express. Cause marketing has made Celebrities linked to product RED to achieve their cause of assisting poor countries in dealing with tropical diseases. On the other hand, it has assisted American Express in building itself as a pioneer in cause marketing. This means that its public relations efforts have dramatically improved. Aside from that, it has also enhanced the company’s relationship with its client as well as the marketing opportunities available to the company.

Product Red was a form of collaboration between entertainers Bobby Shriver as well as U2’s Bono and many companies such as American Express, Gap, Giorgio Armani, Microsoft, Dell, Motorola and others. American Express was obliged to create a product that had a red logo. This was supposed to allow the latter firm to boost their profit making ventures by adding a new item to their catalogue. They are required to donate portions of the profit made to a Global fund for eradicating diseases like TB, Malaria and AIDS. The latter initiative was a non profit making venture for the latter mentioned group. In order to meet their end of the bargain, American Express created a product red card specifically for that purpose (Product Red, 2009).

The second example is the collaboration between Electrolux and Hollywood entertainer Kelly Ripa as well as a cancer research initiative. The latter actress wanted to boost the efforts of the Ovarian Cancer research Fund by generating revenues for them while the research institute’s major aim was to fight ovarian cancer by coming up with new breakthroughs and treatments. Given the heavy cost of cancer research, it needed strong financial support from the external environment in order to achieve this. On the other hand, Electrolux’s aim was to boost its public image as well as generate profits through creation of a new product that was available to the public. The company pledged a total of half a million dollars to the latter non profit making group. This was to be achieved through stands that were sold by the company. Every stand sold will lead a to a dollar donation into the campaign. Besides that, the company is also generating profits though its advertisements on twitter and face book. These respective enterprises have been able to boost the company’s abilities to generate attention into the cancer research issue.

Several other media outlets are also being utilized for this very same reason as consumers have to understand the underlying issues.

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Cause marketing has gone a long way towards building American Express brand awareness. This is largely because the latter venture is not the first attempt at cause marketing. American Express began through its statue of liberty campaign in which it donated a small portion of customer sales from their credit cards into the statue of liberty. The latter cause was one of the first cause marketing strategies and therefore established the company’s level of brand awareness among its peers. The product Red campaign has therefore cemented the latter company’s strong brand because socially responsible consumers relate to it (Brown, 2008).

On the other hand, Electrolux has also managed to build brand awareness owing to the fact that it is constantly advertised on several media outlets concerning the ovarian cancer initiative. The company now appears to be socially responsible to the general public as well as to other types of investors.

American Express has enhanced its brand image through a choice of a cause marketing strategy that is in line with some of the underlying issues facing this firm. For instance, the product red campaign entails selecting a product that can then be sold and directed towards the venture. Consequently, this campaign was in line with the business objectives of the latter company. This means that its image in the public has therefore grown through a proper choice of a campaign agenda.

On the other hand Electrolux has been very passionate about their cause. Their constant email reminders and face book advertisements show that the company its truly committed towards their cause. In the end, its brand image has grown substantially and has therefore made them look respectable in the eyes of the general public.

American express has established brand credibility through its goodwill assertions. Amex is treated as one of the pioneers of cause marketing owing to the many initiatives it has taken part in. These initiatives have generated a lot of PR for the firm and have therefore made it paper credible before consumer’s eyes. Since the product red campaign mostly focuses on a specific product then this has contributed to an image of appearing more competent. Research shows that consumers’ purchasing choices are heavily influenced by a company’s credibility. The increases in sales generated from this card are proof that there are indeed substantial benefits that can emanate from engaging in cause marketing (Product Red, 2009). Shown below is a summary of the financials within American Express.

Financial highlights 2009 Financial figures
Profit margin 9.36%
Return on equity 15.5%
Earnings per share 16.887
Stock growth change 20.3
Dividend payout ratio 55%
Revenue 19.55 billion

Electrolux has a steady number of employees under its wing. This has gone a long way towards making them more productive because they are well aware of their firm’s products and they feel valued by the firms. Employee loyalty has therefore contributed to increased sales because clients are satisfied by the services that they receive from the latter entity. However, the most important aspect about employee loyalty is that it highlights brand credibility. Staff members within the latter organization feel that there is plenty to gain from remaining in such a firm that directs some of its efforts towards charitable causes like the ovarian cancer campaign.

Electrolux has evoked brand feelings by making consumers aware of the power that they possess to change their external environments through their purchasing decisions. When one visits face book and finds an advertisement for the ovarian cancer institute then one is likely to think of Electrolux even without being referred to it. In other words, consumers can now identify the firm with their cause i.e. this initiative has been able to evoke brand feelings from various clientele.

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The same may be said of Amex. Amex has designated specific cards for the product red campaign. Consequently, consumers’ brand feelings have been evoked every time they see or think of global funds to fight Aids, TB and malaria. (Harvey, 2008)

Amex has created a sense of brand community by motivating clients to take part in their product red initiative. Statistics indicate that so far, there have been very many positive responses from the general public with regard to this particular product. Clients felt that there was a need to participate in such an effort because it is directed towards the greater good of the global community. Additionally, research has shown that close to ninety percent of all consumers who work in firms engaging in cause marketing claim that they are actually proud of that fact. On the other hand, it has also been asserted that a similar percentage of consumers would actually change from one brand to another if they found out that the product on offer was going for the same price but that one company directed some of their profits to a charitable cause. In other words, it can therefore be said that consumers are looking for companies that support their environment and this therefore makes them have a sense of brand community with that firm. (Brown, 2008)

The product red campaign and the ovarian cancer initiative possess these qualities because both causes are aimed at fighting a common problem in modern society – that of disease. Consumers are therefore able to identify with these firms and are therefore interested in seeing how they can create community ownership through such efforts.

Electrolux has elicited brand engagement because of the fact that it has identified a cause that fits into its business model. Since the major idea behind ovarian cancer research is to come up with treatments and cures for the latter disease, then this cannot in any way contradict the business objectives for this firm. Consumers are able to identify with the firm because of its cause marketing campaign. Its financials indicate this very fact as seen below

Data parameter 2008/ 2009 figures
Net sales 104793
Income margin 1.5%
Earnings per share 2.32
Capital expenditure 3159
Total employees 55180

Amex on the other hand has also looked for ways in which it can solicit certain feelings from selected audiences. In other words, it has been seen as a caring and concerned company that cares about the issues of the world such as those in third world countries. Consumers are therefore able to engage with the brand

One way in which brand engagement has been achieved in both these firms is by establishment of sound cause marketing goals. These companies knew exactly what they were working towards at the beginning of their campaigns and therefore had a general direction against which to work with. Their reputations were therefore improved, their credibility enhanced and customer loyalty also improved drastically. Therefore, one can argue that it is because of such mechanisms that these campaigns have brought brand engagement. One must therefore understand some of the concepts that are needed in order to make such a venture worthwhile (IEG, 2009).

Conclusion

Cause marketing has brought tangible benefits to both companies by boosting their sales revenues. On the other hand, there also several intangible benefits that are all related to the firms’ brand. These companies have strengthened their brand image, consumer loyalty, employee pride and even their overall reputations. ISome benefits do take a long time before they can materialize but this not undermine the fact that they do occur. The latter campaigns are still ongoing but have been largely successful in boosting brand awareness and credibility.

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References

  1. Product Red. (2009). Official website. Web.
  2. IEG. (2009). Guide to non profit relationships.
  3. Harvey, M. (2008). When the cause is just. Business strategy journal 12(3), 67
  4. Brown, D. (2008). The business case for corporate citizenship. Bardwell magazine 29, 15
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