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You see them everywhere – pink ribbons, yellow wristbands, and red i-Pods. Avon, Nike, and Apple are just a few of the many companies aligning their products with social causes. “Cause marketing” took off in the 1980’s after American Express teamed up with a non-profit to help restore the Statue of Liberty. Some say ethical branding is a great way to prove a company is socially responsible while increasing profits. Others raise questions about how much of those profits go to charities -- and whether the practice undermines donating in more traditional ways. Guest host Susan Page and her guests discuss the idea of shopping as philanthropy.
Consumer goods giant Proctor & Gamble seems to be on a mission. Many P&G brands now claim to have a purpose that goes beyond cleaning clothes or keeping babies dry. Pampers is partnering with UNICEF to provide vaccines to poor children. Tide detergent is providing volunteers in areas hit by natural disasters. And it may be no coincidence that both brands are seeing double digit sales growth. Our guests chat about the "cause marketing" trend and how companies are partnering with charities to meet certain goals.
What Is "Cause Marketing?"
Cause marketing is when a corporation or consumer good ties their sales agenda to a charitable organization, said Mara Einstein. One of the most ubiquitous symbols of this kind of marketing is the "pink ribbon" campaign, where a pink ribbon appears on a product, signaling to a consumer that part of the profit will go to breast cancer causes. One of the biggest problems with this kind of marketing, Einstein said, is that it's not regulated. So while some companies may actually be using the pink ribbon to signal the fact that they give money to breast cancer causes, others may put the same signal on their product for any other reason.
Will People Pay More To Feel Better About A Product?
If two products are side by side and one has a cause attached to it, Einstein said people are both more likely to pay more for the one with the cause attached, and may actually switch to the cause product from the other product. But Stacy Palmer said that most charities don't have a chance at being able to partner with companies for this kind of marketing. "People aren't going to necessarily associate their brands with something that's a really tough problem, helping drug addicts or that kind of thing. So we're talking about a limited number of charities, but those charities that have done very well, some of them are raising a very big share of their money from these deals," Palmer said.
More Regulation, More Information
"I think minimally regulation needs to happen so that people have a better understanding of how much money is actually going to a campaign," Einstein said. She said that some companies also sometimes have a cap on the total amount of money they'll donate to a campaign. When the cap is reached, no more money goes to the charity, but consumers might not necessarily know that, Einstein said.
You can read the full transcript here.