Cause Marketing by fjzhangxiaoquan


									Cause Marketing

   What‟s in a non-profit‟s name?
What is “cause marketing”?

   Licensing agreement between commercial
    product marketer and leading nonprofit

   “Passion branding”
   “Social issues marketing”
   Nonprofit assigns right to use name and logo
    in promotion of commercial products
   Sponsor pays substantial sums of money for
    use of nonprofit‟s name and logo in
The rise of cause marketing

   relatively recent phenomenon
   earliest use (1983) involved promotion by
    American Express
       for each purchase made with card one penny
        contributed to renovation of Statue of Liberty
   raised $1.7 million
   generated 28% increase in card usage
More recent examples

   Visa committed to donate, based on card
    usage, at least $1 million to children‟s literacy
   Johnson & Johnson contributed portion of
    sales from children‟s toiletries to World
    Wildlife Fund
   MCI donated portion of business billings to
    Nature Conservancy and Audubon Society
Is it a significant form of marketing?

   fastest growing segment of advertising in „90s
   estimated expenditures of $1 billion on cause
    related marketing campaigns in 1993
   estimated expenditures on sponsorship
    activities would be $6.8 billion in 1998
   1994--$340 million paid to various charitable
    organizations in North America
   1996--$485 million
   2002--$835 million
   second largest sponsorship category
       exceeds spending on tours, arts, festivals, fairs
   dwarfed by $7.21 billion advertisers spent on
    sports sponsorships
What are the benefits to nonprofits?

   Further the organization‟s mission
   Leverage the marketing budgets of
    corporations by obtaining access to mass
    media resources it could not otherwise afford
   Increase public awareness
   Gain an increasingly significant source of
What are the benefits to the commercial
   Generate increased sales
   Enhance image as good corporate citizen
   Develop long term customer relations
   Build brand loyalty
   Differentiate themselves and their products
    from other sellers and products in competitive
Most prevalent form of cause marketing

   Nonprofits--often health charities--entering
    licensing agreements with commercial
    sponsors--often pharmaceutical companies
   nonprofit sells use of its name and logo for
    use in national advertising campaigns
    promoting the corporation‟s commercial
    products--often prescription or OTC drugs
   Consumers bombarded with advertisements
    touting various products--particularly health
    products--in which large, familiar and trusted
    nonprofits‟ names and logos are prominently
   prescription cholesterol drug Pravachol prominently
    displays name and logo of American Heart
   logo of American Cancer Society prominently
    featured in advertisements promoting Florida orange
    juice--in return for $1 million a year,
   American Cancer Society sold exclusive rights to
    use name and logo in promoting NicoDerm CQ and
    Nicorette--in return for annual payments of $1 million
   American Lung Association sold Johnson &
    Johnson its name to promote Nicotrol--in return for
    $2.5 million annually
What’s wrong with these practices?
a. Consumers place a high level of trust in
nonprofit organizations…
1995 survey of 1,011 adults conducted for the
  American Cancer Society (ACS):
 96% recognized the ACS

 ACS received highest ratings for overall
  reputation and as organization people can
  turn to for accurate information about cancer
1997 National Health Council study:
 Organizations such as American Cancer
  Society and American Diabetes Association
  found to be “somewhat” or “completely
  believable” by 93% of consumers surveyed
    same percentage as doctors
    slightly higher than nurses and pharmacists
…but do not place the same level of trust
in advertisements
   same report found 31% of consumers felt
    advertisements for medications were either
    “not too” or “not at all believable”
b. Consumers prefer products marketed in
association with a nonprofit corporation
1997 Cone/Roper survey
 when price and quality are equal among
  competing brands, 76% of consumers would
  be likely to switch from current product brand
  to one associated with good cause
1991 study published in Journal of Consumer
 45.6% of consumers were “somewhat likely”
  or “very likely” to switch brands to support
  manufacturer that donates to charitable
1994 focus study commissioned by American Cancer
 74% of consumers would be more likely to buy
  consumer products or services associated with
  charity such as ACS
 70.5% stated that ACS message and name would
  increase loyalty to their most preferred cereal
 40.1% would switch to second most preferred cereal
  brand if ACS logo and message printed on package
c. Consumers believe that products
marketed in association with nonprofit are
endorsed by nonprofit
   Focus groups and interviews with consumers reveal
       “consumers trust the ACS and feel that products which
        carry the ACS logo would have been tested by the ACS”
   Study designed to determine public reaction to
    ACS‟s involvement with commercial sponsors
       57% of respondents felt there was an implied endorsement
        of products using ACS name
Survey commissioned by the American Heart
  Association (AHA)
 60% would change brands in order to buy
  product “approved” by AHA, assuming price
  the same
 61% assumed organization giving approval
  guarantees quality of product
 88% believed product had been tested by
d. Consumers believe products marketed
in association with nonprofits are superior
to competing products
1994 study commissioned by the American Cancer
 44.5% agreed or agreed strongly with the statement
       “I believe this brand of cereal promoted with the ACS is
        more healthy for me and/or my family than any other
   60.4% agreed or agreed strongly with the statement
       “I believe eating this cereal will reduce my/my family‟s risk
        for cancer”
Study related to aspirin products,
 44% indicated belief that brand of aspirin
  promoted with ACS would reduce risk of
  cancer more than another aspirin
Study related to pork & beans
 40.6% agreed or totally agreed with
     “I believe this brand of pork & beans, promoted
      with the ACS, is more healthy for me and/or my
      family than any other brand of pork & beans”
e. Consumers do not expect marketing
relationships between commercial entities
and nonprofits to be exclusive
Survey to test how people feel about the ACS
  exclusive partnership with two smoking
  cessation aids
 8% were aware relationship was exclusive
1. Public policy concerns

   Public trust is at heart of nonprofit community
   Consumers view nonprofit organizations--
    particularly voluntary health agencies whose
    central missions are disease prevention and
    cure--to be independent, unbiased, neutral
    sources of expertise, information and
   In order to maintain public‟s trust, nonprofits
    need to preserve their independence and
    maintain practices and policies anchored in
    that public trust foundation
   Commercial/nonprofit alliances as they are
    developing appear to raise questions about
    ability of nonprofits to maintain their integrity
    and independence--in both actual fact and
    public perception
2. Legal issues

   Key issue: whether use of nonprofit‟s name in
    association with product implies nonprofit
       has tested product
       approves of product
       endorses product
FTC Action

   1995 FTC settled case against Eskimo Pie
    Corporation for advertisements for frozen
    dessert products
   Ads used ADA name and logo and stated:
       “Now Eskimo Pie and the ADA are partners in
        providing the pure pleasure of frozen novelties to
   FTC took position that ads implied ADA had
    approved or endorsed the product; it had not
Yoplait charitable promotion
   1999 Yoplait Yogurt containers stated that $.50
    would be donated to Breast Cancer Research
    Foundation for each lid returned
   Television campaign with same promise
   9.4 million lids returned nationwide
       $4.7 million should have been donated
   On underside of lid--visible only after purchase--
    indicated that maximum contribution was $100,000
    regardless of number of lids returned
   “pink washing”--using support of breast cancer
    research to promote products
1999 16 Attorneys General issued
following five recommendations:
1. Endorsements
 Advertisements for commercial products
  should not misrepresent that nonprofit
  organization has endorsed the advertised
    If advertisement uses nonprofit organization‟s
     name or logo, and nonprofit has not endorsed
     product, advertisement should clearly and
     conspicuously disclose that nonprofit
     organization has not endorsed product
2. Superiority claims/disclosure
 Advertisements for commercial products
  using name or logo of nonprofit should avoid
  making express or implied claims that
  advertised product is superior to others in
  same product category, unless claim is true
  and substantiated
     If nonprofit has not determined advertised product
      to be superior, advertisement should clearly and
      conspicuously disclose that fact
3. Paid sponsorship
 Advertisements for commercial products
  using name or logo of nonprofit should
  disclose clearly and conspicuously that
  corporate sponsor has paid for use of
  nonprofit‟s name or logo, when that is the
4. Deception/confusion
 Product advertisements arising from
  commercial/nonprofit relationship should not
  mislead, deceive or confuse public about
  effect of consumer‟s purchase on charitable
  contributions by commercial sponsor
5. Exclusivity
 Advertising partnerships between commercial
  and nonprofit entities should avoid exclusive
  product sponsorships
     where exclusive relationship exists, product
      advertisements using name or logo of nonprofit
      should clearly and conspicuously disclose that
American Heart Association
   Criticized for taking corporate contributions in
    return for use of name and logo
   Criticized for use of Food Certification Program
    heart-check mark
   Criteria don‟t include low sugar content
   Insufficient scientific evidence of sugar as risk factor
    for heart disease
   AHA has endorsed Cocoa Puffs Cereal
       120 calories (per cup)
       14 grams of sugar (40% of calories)
       No fiber
   Cookie Crisp cereal
       120 calories
       13 grams of sugar
   Jane Brody: “Hardly a nourishing start to the day,
    even if they are low in fat.”
9/11 Tie-Ins

   In six months following 9/11 >$2 billion raised for
    related charitable causes
   Marketers saw opportunity to partner with nonprofits
   United Way received 1,540 offers
   To avoid appearance of profiteering and protect its
    name, UW accepted only offers in which
       It had final say over promotions
       100% of profits went to UW
   Most companies only offered a share of profits
   UW concluded ~ dozen deals on that basis
   In year following 9/11 GAO reported
       78 cases of charity fraud against nonprofit
        organizations in New York
       8 cases in other states
   Also some problems from tie-ins with
   company promoting a sneaker “The Bravest”
   portion of profits to go to families of New York City‟s
    343 deceased firefighters by way of nonprofit
   35,000 pairs sold at $49.95 each
       profit of $515,783
   at time of sale no contract specifying how much of
    profits went to nonprofit
   four months later parties agreed to 10% of profits

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