ONCE upon a time, profitability and social responsibility had an inverse relationship and resided in enemy camps. In the modern age, the corporate world has found that they are not mutually exclusive, rather they can peacefully coexist in a win-win situation.
Proactive and progressive businesses in the world have learnt that being socially and environmentally responsible pays off in the long run. This is the rationale behind the debatable new research on marketing strategy, namely Cause Related Marketing (CRM). The subject has become the hottest new fad to develop clean, ethical and responsible corporate images for companies seeking public legitimacy and support. By gaining this respectability, companies try to build ethical marketing reputes for themselves, to win over mind-share of skeptical consumers.
COMPETITIVE WEAPONS: Companies need to update their ammunition depots with a variety of weaponry able to penetrate the most difficult of marketing terrains and territories. The marketplace becomes so crowded with companies doing the same thing that organizations have to try new strategies to create a space for themselves.
Marketing warfare is becoming intense. As the world becomes global and competition becomes cutthroat, it is extremely difficult for companies to make themselves noticed, heard and loved by customers. Traditional market weapons of lower prices and higher quality have become rusty and are no longer sharp enough to penetrate the overcrowded mind of customers. Many companies feel that they need to have the additional aura of respectability to entice the customer into believing in the goodness of the company operations. Thus, the emphasis on relating itself to noble causes such as charities, education and environment.
The media has also been responsible for making the customers more demanding and questioning. The customer expects that companies are not just money-making machines who try to rip off the market by making tall claims and then failing to deliver, but accountable and responsible entities who look at their own and other people’s interests.
STRATEGIC PHILANTHROPY: The win-win situation can only occur if both parties, i.e. the company and the customer, attain mutual benefits. The best example of this is the huge success of a specific brand of detergent in the Pakistani market. In a market where a rival company had achieved generic stardom, it was very difficult for any newcomer to dethrone the giant by claiming tangible product superiority. Thus, the brains behind the new brand of detergent decided to project the image of being more socially responsible to edge past the normal rationale of buying detergents.
Tying their campaign to education for the handicapped, they asked consumers to return empty bags of their detergent. This, in effect, served many purposes and the society. They contributed to the social cause by donating money to handicapped; they also abided by the international environmental conservation packaging principle based on the three Rs — reuse, reduce and recycle — and most of all, they helped increase sales, as people felt that by buying the brand of detergent, they could contribute to the wellbeing of socially-deprived individuals.
Strategic philanthropy is the new name in the marketing game. Western societies have already used it to their advantage. Anita Roderick built a huge cosmetic empire on products that advertised “no animal testing.” Others, afraid of losing their image, are desperately investing and publicizing environment preservation plans, while many others are also chanting the environment mantra these days.
Even cigarette-manufacturing companies are now advertising their environmental responsibility. As is usual with Pakistani companies, when one company tries a new strategy and succeeds, all follow suit. Every company now is in the race for being socially and environmentally conscientious.
GLOBALIZATION: As the world becomes globalized and the companies become dependent on other countries in the world for producing raw material or selling finished goods to them, environmental standards will become mandatory international laws. Already, many major exporters in the textile and leather industries are forced to use water treatment plants and environment-friendly chemicals in adherence to the requirements of the international market. Most of our export companies have to abide by international laws such as Child Labour, EMS 14000 (Environmental Management Systems), and the latest SA 8000 (Social Accountability ), which make it mandatory for them to comply to these laws.
SA 8000 is a law requiring companies to provide conducive working conditions for their employees in terms of workplace comforts, medical and health facilities, etc. As the global world takes over, companies are learning to convert these mandatory requirements into marketing gimmicks by claiming to be the environmentally conscious companies possessing ISO 9000 and EMS 14000 certification in their advertisements, slogans and in their logos.
Gone are the days when being ethical and responsible was considered a luxury the companies could not afford. In today’s world, the company markets its products both on passion and compassion. Cause-related marketing uses not only rational appeals to sell their products, but combines it with moral and spiritual appeals. Just by saying that a product will give you taste, style and status may make the consumer feel guilty, and so to justify consumer extravagance and to appease his guilt, companies increasingly present the social side of the purchase, making the consumer feel good in a way where he feels that he is contributing to somebody in need with this personal indulgence.
Thus, companies have two choices — either be reactive and wait for the environment to act on them, and thus be subject to the threats of international law, or act upon the environment and proactively use these variables as an opportunity to differentiate themselves to become rule makers rather than rule takers.
Remember, low prices alone will not bring brand loyalty, as the customer will defect to a competitor every time somebody else in the market lowers the price further. But lower price coupled with a social cause will create the goodwill in the mind of the customer which may act as a defection deterrent initially, and later on, lead to a durable and sustainable competitive advantage for a company trying to survive increasing public scrutiny.
