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The Controversy of Cause-Related Marketing

Updated on May 16, 2013

Cause-related marketing can be a controversial subset of social responsibility. It is sometimes referred to as cause marketing. It is the cooperative efforts of a for-profit firm and a non-profit organization for mutual benefit. Sometimes, cause-related marketing is used as any marketing effort for social or other charitable causes. Cause marketing is different than philanthropy or corporate giving. Philanthropy generally involves a specific donation that is tax deductible while cause marketing is a marketing relationship not based on a straight donation.

Cause-related marketing is also known as CRM. CRM has become extremely popular among companies and is estimated to generate about $7 billion a year in revenue. It is a great tool for companies to build positive public relations and often stimulates brand sales.

Controversy Over Cause-Related Marketing

No other cause has been more saturated with marketing than breast cancer awareness. Consumers can buy anything from food to toilet paper with labels that feature a pink ribbon. This typically signifies that for each product sold money is donated to breast cancer awareness. Yoplait ran a campaign that donated 10 cents for lid mailed back by the consumer. It was only in the fine print that Yoplait had capped donations at $80,000-keeping the rest as profit.

The Gap has also received criticism for its (Product) Red Campaign which has raised over $25 million to fight HIV/AIDS, tuberculosis, and malaria. The Gap donates 50% of the profit raised from the (Product) Red products to the cause. However, the promotional costs were $100 million.

Five Questions To Ask Before Participating In A Cause-Related Marketing Program

The Susan G. Komen Breast Cancer Foundation is on the receiving end of much cause-related marketing. The Foundation recently created these five questions for people to consider before participating in a cause program:

1.) Is this company committed? Read the product package and promotional materials or display. Visit the company website to make sure the company is credible and committed to the cause.

2.) How is the program structured? Transparency is key. Does the company clearly state how much money it is donating to the charity and how the money is raised. Is there a minimum contribution guaranteed by the company? Is there a maximum donation paid by the company?

3.) Who does the program benefit? Does it support a well-managed, reputable non-profit or fund? Check the company’s website or visit the Better Business Bureau Wise Giving Alliance as a resource for information on non-profit organizations.

4.) How will the organization the benefits use my money? It should be clear where the money goes. What organization is being supported? Is the money going to research, education, or community programs?

5.) Is the program meaningful to me? Is the program supporting a cause you believe in? Based on the program’s details and the potential for dollars to be raised, does the program make sense to you? Selecting the right program is a personal choice.

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