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ARE GOOD CAUSES GOOD MARKETING?
Phil Collins is hardly a fashion maven. And he's no professional model. So why was the rock star signed to appear in national TV advertisements for Sears, Roebuck & Co.? As part of its effort to pull itself out of a sales slump, the retailer is sponsoring a 40-city concert tour by Collins that will raise more than $1 million for the homeless. Says John H. Costello, Sears' marketing chief: "We think it will reinforce the idea that Sears is the most compelling place to shop."
Phil Collins? The homeless? Shopping at Sears? Welcome to the world of cause marketing, one of the fastest-growing--and increasingly debated--attempts by corporations to get consumers to reach for their brands. Companies poured nearly $1 billion into cause campaigns last year, up 24% from 1992 and 151% from 1990, according to the International Events Group.
CLUTTER-CUTTER. Inspired by cause-marketing success stories such as ice-cream maker Ben & Jerry's (which gives away 71 2% of pretax profits), many big-name brands have jumped on the bandwagon. Avon supports breast-cancer research in the U.S. and several other causes abroad. Timberland says it wants to "give racism the boot." Adolph Coors promotes literacy. Kraft General Foods donates 25 for scholarships for African American college students with specially marked coupons for Stove Top stuffing and other products. American Express, which stirred marketers' interest in cause marketing in the 1980s with a campaign supporting the Statue of Liberty restoration, raised $5 million during the holidays when it promised to donate 2 from every transaction to combat hunger.
Cause-marketing advocates say such campaigns can meet traditional marketing goals, such as boosting market share, pumping up the sales force, or improving a weak public image, while helping causes the customer cares about. AmEx credits its antihunger campaign with helping boost U.S. charge volume by 9.4% in last year's fourth quarter. "When there is parity in product and price, consumers go for what's relevant," says Avon Products Inc. Chief Executive James E. Preston. A tie-in with a high-profile social issue can cut through the clutter of rival marketing messages, they add. "It's getting harder and harder to reach people through traditional advertising," says marketing consultant Carol Coletta.
The pitch is simple. "If the fashion industry can dictate what people wear, why can't we influence more important things?" asks Edward Wachtel, chief executive of Members Only, which for years has used antidrug messages in its ads.
What's wrong with that? Quite a bit, say some people. Like green marketing a few years ago, cause marketing has drawn a growing number of critics as it has increased in popularity. They question its effectiveness as well as the marketers' sincerity. "A lot of companies say they're doing it for community-relations reasons when they're really just looking for publicity," says David F. D'Alessandro, marketing chief at John Hancock Mutual Life Insurance Co.
"THIN LINE." Critics argue that if consumers are savvy enough to see through traditional ads, they're savvy enough to wonder why companies don't donate the millions they're spending on cause-marketing ads directly to the cause. "There's a thin line between doing something that really helps and something that looks self-interested," says Thomas Harris, an adjunct professor at Northwestern University's Medill School of Journalism and a founder of Gollin/Harris Communications. Ben & Jerry's co-founder Bennett R. Cohen says many corporations are "insincere" because they donate just a tiny fraction of the money they earn from the campaigns.
Research indicates consumers themselves haven't sorted things out. A 1993 survey by Roper Starch Worldwide, sponsored by cause-marketing specialist Cone Communications in Boston, found that 66% of 1,981 consumers polled claimed they were likely to switch brands if the purchase supported a cause of concern to them. But 58% of the respondents said cause marketing is "just for show to improve the company's image." And only 12% said helping a cause was one of the most important factors in their purchase decisions.
Much more important were such things as past experience with the brand (71%), price (62%), the company's reputation for quality (56%), and word-of-mouth recommendations (31%). Appeals to charitable impulses simply can't overcome traditional reasons for buying products, says Stephen A. Greyser, a marketing professor at Harvard business school. Asks Greyser: "Why should a person switch toothpaste just because you're giving a few pennies to a charity when the real reason you buy toothpaste is to fight cavities?"
SORRY, CHARLIE. Star-Kist Foods Inc.'s sales actually dropped after the tuna packer launched a high-profile campaign responding to complaints that its fishing nets were killing dolphins. The company changed its fishing practices and put "dolphin-safe" labels on its cans--with no price increase--but shoppers continued to switch to private-label and cheaper brands. People "talked out of both sides of their mouth," says then-Senior Vice-President J. Wray Connolly, who has since retired. "They wanted dolphin-safe, but weren't ready to pay for it."
Often, marketers can't tell for sure whether the cause tie-in has any effect. Last year, Midas International Corp. offered child car seats to consumers at the wholesale price of $42. Drivers who return a seat when the kid outgrows it get $42 in Midas services. Marketing Vice-President Christian Schoenleb says the $500,000 push, which also includes brochures, videos, and events for kids with "Buckles the Bunny," is helping draw women customers: "We know we're attracting more foreign-car users, and we know more women own foreign cars than men," he says. But he admits that it's hard to be sure that's because of the car-seat campaign.
Some companies, though, say they've reaped unexpected long-term benefits. McDonald's Corp.'s franchises have long been required to stay close to local communities, pushing do-goodership such as Ronald McDonald House. When whole blocks of businesses were burned and looted in 1992's South Central Los Angeles riots, "we literally had people standing in front of some restaurants saying, 'No, don't throw rocks through this window--these are the good guys,'" an executive says. As the dust cleared, all 60 McDonald's restaurants in South Central were spared. Unfortunately, the results of cause-related marketing aren't always so clear.
FOR THE CAUSE
Cause-marketing campaigns have served different purposes:
GLOBAL MARKETING Avon Inc. trumpets different issues in each of its markets. In the U.S., it's breast cancer research. It's violence against women in Malaysia, child nourishment in China, and AIDS in Thailand.
SHORT-TERM PROMOTION In the fourth quarter, American Express offered to donate 2 per transaction to the antihunger organization Share Our Strength. The widely advertised campaign raised $5 million, the company says.
IMAGE BUILDING Coors Brewing has pledged to spend $40 million over five years on funding for literacy organizations and public-service ads on literacy.
MARKETING TO WOMEN Midas is courting women drivers with Project Baby Safe. Drivers who buy a $42 Century 1000 STE car seat get a certificate worth that sum in Midas services.
DATA: COMPANY REPORTS, BUSINESS WEEKGeoffrey Smith in Boston and Ron Stodghill II in New York