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Business Horizons (2005) 48, 443 — 453

www.elsevier.com/locate/bushor

Cause-related marketing: More buck than bang?


Matthew Berglinda, Cheryl Nakatab,*

a
School of Communications, Northwestern University, 2240 Campus Drive, Evanston, IL 60208, USA
b
Department of Managerial Studies, University of Illinois at Chicago, MC 243, 601 S. Morgan,
Chicago, IL 60647, USA

KEYWORDS Abstract Starbucks, Target, and Nike are just a few of the businesses partnering
Cause-related today with not-for-profit organizations in cause-related marketing campaigns. These
marketing; campaigns are implemented for a dual purpose: on one hand, to raise awareness,
Social responsibility; support, and donations for social causes such as global hunger relief, and on the
Social-ethical issues other, to enhance corporate reputations, customer loyalty, and financial gains for
companies. An example of cause-related marketing is an effort organized by Macy’s,
Pfizer, and other businesses on behalf of the American Heart Association. The
program has raised over $32 million in donations for the charity, while generating
over 1 billion media impressions for corporate sponsors. In this article, we discuss the
concept and practice of cause-related marketing, as well as some of its social-
ethical complexities. We end with suggestions for increasing the effectiveness of this
popular marketing tool and form of corporate philanthropy.
D 2005 Kelley School of Business, Indiana University. All rights reserved.

1. Cause-related marketing: An overview sales while increasing public awareness of breast


cancer. Now in its eighth year, over $12 million has
In 1997, Yoplait Yogurt formed a unique partnership been raised for Komen’s research initiatives.
with the Susan G. Komen Breast Cancer Foundation. Yoplait’s strategic alliance with the Foundation is
For every cup of yogurt sold, Yoplait’s corporate an example of cause-related marketing (CRM).
parent General Mills donated ten cents to the Marketing a product, service, brand, or company
Foundation for breast cancer research. At the same by tying it with a social cause (such as breast cancer
time, Yoplait initiated an extensive advertising detection and treatment) is the essence of CRM.
campaign promoting the partnership called bSave Typically, a portion of sales from the marketed item
Lids to Save Lives.Q The arrangement has been very is donated to the cause. Over the last 20 years, CRM
successful, strengthening Yoplait’s brand image and has evolved from a niche marketing tool and
curiosity into an established and prevalent form of
corporate philanthropy. Business managers note the
* Corresponding author. benefits of building brands, improving corporate
E-mail addresses: m-berglind@northwestern.edu reputations, and generating more revenues, while
(M. Berglind)8 cnakat1@uic.edu (C. Nakata). heads of not-for-profit organizations (NPOs) appre-
0007-6813/$ - see front matter D 2005 Kelley School of Business, Indiana University. All rights reserved.
doi:10.1016/j.bushor.2005.04.008
444 M. Berglind, C. Nakata

ciate the increased funding for, as well as height- because it indicates a focus on a specific cause,
ened public receptivity to, their causes. not the larger social good. CRM projects are not
While cause-related marketing appears to be a general bfeel-goodQ or consciousness raising exer-
win—win—win-situation for businesses, NPOs, and cises; rather, they are attempts to generate resour-
the public, it is not without critics. For instance, ces, usually financial, for specific concerns.
Think Before You Pink (n.d., 2004), a watchdog Importantly, too, the word brelatedQ refers to some-
group that monitors breast cancer CRM promotions, thing along side the cause, namely the business,
has been particularly harsh regarding the bSave Lids which is co-promoted. In addition to multiple terms,
to Save LivesQ project: there is also a proliferation of concepts. One of the
more widely circulating ideas follows:
bA woman would have to eat three containers of
Yoplait every day during the four-month campaign bCause-related marketing is the process of formu-
to raise $36 for the cause—and research suggests a lating and implementing marketing activities that
number of health risks, including cancer, associated are characterized by an offer from the firm to
with the consumption of dairy products from cows contribute a specific amount to a designated cause
given rBGH (recombinant bovine growth hormone).Q when customers engage in revenue providing
(www.thinkbeforeyoupink.org) exchanges that satisfy organizational and individual
objectives.Q
(Varadarajan & Menon, 1988, p. 60)
The Think Before You Pink assertion reflects the
kinds of questions CRM campaigns tend to raise: Is
the CRM program a diversionary tactic, hiding a This conceptualization, however, constrains a
product problem through a public relations spin? Is CRM to a donation tied to a specific purchase or
the amount donated to the cause disproportionately level of sales. In more recent discussions of CRM, the
small relative to the sales generated for the concept has been broadened to include other forms
product? And, most of all, is the CRM campaign a of assistance to the cause, as well as less direct gifts
clever manipulation to enrich a corporation’s coffers (Hoeffler & Keller, 2002). An example is Barnes and
(generating a buck), or is it a sincere way of assisting Noble’s sponsorship of lectures on racial tolerance
a charity (creating a bang or social impact)? on behalf of the Anti-Defamation League. In this
In recent years, public faith in corporations has case, there is no donation tied to purchases or sales.
been shaken by spectacular acts of malfeasance Given the evolving and expanding nature of CRM, we
from the likes of Enron, Xerox, MCI, and others. define it as the practice of marketing a product,
Jaundiced eyes may view CRM in the same light as service, brand, or company through a mutually
these visible instances of corporate avarice and beneficial relationship with a non-profit or social
deception. Yet, advocates see CRM differently: It cause organization (Marconi, 2002).
marries the needs of businesses with those of cause We should also distinguish between CRM and
organizations, representing one of the few areas in social marketing. As some of the CRM-like terms
which social and commercial interests converge. imply, the concept can be confused with that of
Since NPOs and businesses are applying this strat- social marketing. However, CRM is clearly in the
egy in rapidly growing numbers, it may be timely to province, and used to enhance the market position,
look at CRM. To that end, we describe the concept of a business; the means is a publicized association
and practice of CRM, explain why organizations between the business and cause. In contrast, social
enter into these arrangements, and discuss some marketing solely addresses a social ill, excluding
ethical issues and social implications. We conclude promotion of a business. Philip Kotler, a well-known
with suggestions for creating and executing more marketing expert, and his colleagues refer to social
effective and thoughtful CRM efforts. marketing in this way:

bSocial marketing is the use of marketing principles


and techniques to influence a target audience to
2. What is CRM, really? voluntarily accept, reject, modify, or abandon a
behavior for the benefit of individuals, groups, or
There are many terms similar to cause-related society as a whole.Q
marketing. Among these are bcorporate societal (Roderto, Lee, & Kotler, 2002, p. 5)
marketing,Q bcorporate issue promotions,Q
bcorporate social marketing,Q bsocial issues market- Social marketing is a much older practice than
ing,Q bpro-social marketing,Q and bpassion branding.Q CRM, and is executed largely without the help of
We prefer the term bcause-related marketingQ corporations. It is typically directed by a non- or
Cause-related marketing: More buck than bang? 445

quasi-governmental agency, which produces and quiet, traditional philanthropy in this way: bIf you
circulates advertisements, pamphlets, and other did it and didn’t tell anybody, you didn’t do it.Q
marketing collateral in order to dissuade the public (Tanen, Steckel, Simons, & Simons, 1999, p. 205).
from destructive habits (e.g., taking illicit drugs) or Enter CRM. In 1983, financial services giant
toward constructive ones (e.g., reading to children). American Express executed what many consider to
The American Legacy Foundation provides an exam- be the first CRM campaign (Smith & Higgins, 2000).
ple. The organization was created and funded as The Statue of Liberty and Ellis Island were under-
part of the $206 billion settlement reached in 1998 going long overdue renovations and were in need of
between U.S. tobacco companies and 48 state significant funds. American Express announced it
governments. The American Legacy Foundation would assist by donating one cent for each use of its
developed a social marketing campaign called the credit card and one dollar for every new card issued.
bTruth Campaign,Q which combined public service To make the public aware of this arrangement, the
messages with an aggressive advertising program to firm spent $6 million promoting the Statue of Liberty
prevent and reduce tobacco smoking among teen- campaign. The results were fairly spectacular: over
agers. The Legacy Foundation claims the campaign $1 million was raised for the cause, American
has been a successful weapon in the fight against Express card usage grew by 28%, and new card
tobacco addiction, reducing lung cancer and other applications increased by 17% (Tanen et al., 1999).
life-threatening diseases associated with smoking. Sensing it had something valuable on its hands, the
company called the effort bcause-related market-
ingQ and trademarked the term.
With the Statue of Liberty campaign, American
3. Origins in Rockefeller and American Express announced its good works with authority and
Express fanfare, making a break with the humbler philan-
thropy of the past, and in direct response to the
CRM is rooted in the long tradition of American public’s raised social consciousness. The genius of
corporate philanthropy. Over a hundred years ago, this campaign was recognizing that the marketplace
Andrew Carnegie, John Rockefeller, Henry Astor, and would reward firms that acted in a socially respon-
other captains of industry began making sizable sible way and that assisted ordinary citizens to act
financial contributions to start, expand, and main- responsibly, too. The key distinction from prior
tain museums, universities, and other social and philanthropic endeavors was an overt and much
cultural institutions. As leaders of commerce, they publicized connection between a company’s primary
modeled the principle of giving back to the com- activity (making money) and a not-for-profit organ-
mons. Over time, philanthropy became ingrained in ization’s aim (improving welfare). Thus, for the first
the American corporate psyche. Yet giving, then and time, commercial objectives were unabashedly and
now, has never been an act of pure altruism. unapologetically co-mingled with a social mission to
Corporations have always understood that donations produce a single marketing effort.
serve a powerful public relations function, casting a
favorable light on their presence and actions.
As businesses entered the 1960s, social activism 4. CRM trends: Up and away
and consciousness triggered an examination of
corporate philanthropic activities. The Vietnam Since the American Express campaign of 1983, CRMs
War, Civil Rights Movement, and legitimization of have taken off. CRM is one of the fastest growing
dissent led to public demand that businesses behave forms of marketing, as reflected in increased
with greater sensitivity to communities, both near spending (Webb & Mohr, 1998). CRM expenditures
and far. In growing numbers, Americans were ques- went from practically zero in 1983 to an estimated
tioning whether and how companies were actors in $922 million in 2003. Companies invested approx-
the social and political drama of their times. For imately $991 million in cause campaigns in 2004, a
instance, Coca-Cola, Boeing, and Dow Chemical rise of 57% since 1999 (Gard, 2004). In 1983,
were all targets of anti-war protests. In this context, philanthropic giving totaled $100 billion, and then
corporations were finding traditional forms of rose to $241 billion by 2003, representing a 6%
philanthropy decreasingly effective. Passive charity, annual growth rate. However, CRM donations
or making donations without tooting one’s horn, did increased more than twice as quickly, from $630
nothing to quell the rising chorus of criticisms aimed million in 2000 to $828 million in 2002; a 14% annual
against businesses as part of the ruling hegemony growth rate. Corporate giving is also expanding more
(i.e., bthe establishmentQ). David Olgivy, the famous quickly than any other source of charitable donation
advertising guru, summed up the impotence of (Giving USA Foundation, 2003). In that light, it is
446 M. Berglind, C. Nakata

little wonder that NPOs see corporations and CRMs Special Olympics. Mars ran a $50,000 giveaway
as vital sources of funding. program for lucky purchasers of its M&M
Helping to propel business interest in CRM is the products. For every $50,000 awarded to win-
pressure to tie charitable efforts to improvements in ners, the company contributed the same
the bottom line and competitive position (Andrea- amount to the Special Olympics. More than
son, 1996). At the same time business managers 200 million M&M candy packages were marked
grapple with gaining strategic advantage for their with the U.S. Special Olympics logo, raising
companies in an age of hyper-competition and public support for the not-for-profit.
rapid technological change, shareholders and mar-
ket makers clamor for hikes in quarterly profits. In
! Message promotion programs: In these pro-
grams, the cause is promoted and some
such a volatile situation, it is no longer enough to contribution, although not tied to a trans-
do good for others. Any expenditure of resources, action and not necessarily monetary, is made
whether for charitable purposes or not, must by the firm. The Anti-Defamation League, an
produce tangible benefits for the firm. CRM meets anti-hate group, entered into such a program
these requirements. Also known as bstrategic with Barnes and Noble. Together, the two
philanthropyQ (Adkins, 1999), CRM is a means of organizations created the bClose the Book on
achieving business objectives in tandem with social HateQ initiative, which provides instructional
improvement. In this regard, CRM is a decided materials and lectures to promote racial and
departure from earlier philanthropic efforts, which cultural tolerance. Over two million brochures
tilted toward the latter. Front and center are covering ways to combat prejudice have been
commercial interests, giving as a way to pre- passed out in stores, schools, and by govern-
determined ends, and causes congruent with the ment institutions, promoting both cause and
firm’s goals, target markets, and critical constitu- company.
encies (Smith & Higgins, 2000).
CRM may appear to be a one-sided affair, but this
! Licensing programs: Licensing has become one
of the most prominent forms of CRM programs,
is not the case. NPOs understand they can profit and can be lucrative for both parties. Com-
from the collaborations as well, leading them to monly, a non-profit (e.g., World Wildlife Fund)
seek and initiate the efforts. NPOs are actively licenses use of its name and logo to a company
courting potential business partners with, oddly (e.g., Visa), which places the imprimatur on the
enough, tried and true marketing techniques bor- product (e.g., credit card). A percentage of
rowed from commerce. A key motivation is that every transaction is then given to the non-
NPOs are not able to rely heavily on government profit. In the case of the World Wildlife Fund,
funding to sustain or expand their activities. In the licensing program with Visa/FirstUSA has
recent years, federal, state, and city governments been very beneficial, producing over $10 million
have faced shrinking revenues, forcing them to in donations.
curtail charitable support. Therefore, corporations
and individuals are being asked to step into the The above programs represent a fairly overt
funding breach. economic relationship between the cause organ-
ization and company. However, there are more
subtle CRM arrangements, which begin to blur the
line with broader corporate social responsibility
5. CRM practices: One size does not fit all practices:

The practice most closely associated with CRM is


donating a portion of every sale to the cause
! Issue focused programs: In these programs,
businesses partner with non-profit groups affili-
organization. However, there are many other ated with one issue. The issue is selected
techniques, indicating that CRM is a flexible tool. strategically to support the image of the
The Cause Marketing Forum, a prominent cause- corporation. Liz Claiborne initiated a campaign
marketing advocate, describes the three most for the Family Violence Prevention Fund, a
common practices as: group dedicated to reducing domestic violence.
Liz Claiborne products are targeted to women,
! Transactional programs: This is the classic
exchange-based donation. For every unit sold,
who are disproportionately victims of abuse.
This allows the company to be perceived by the
a corporation contributes a share of proceeds public, particularly its customers, as sensitive
to a particular social cause. An example is to women’s issues. There is, however, no
candy company Mars’ support of the U.S. specified donation. Through this partnership,
Cause-related marketing: More buck than bang? 447

Liz Claiborne has assisted the Fund in establish- dollars in new revenues for the company, enabling
ing abuse prevention programs in all 50 states it to more than recoup the $6 million investment in
and several foreign countries. advertising. A CRM project can be comparatively
! Business activity programs: Many corporations
integrate ethical business practices into their
more dollar efficient than other marketing efforts,
generating a large increase in sales with little to no
operations. Kraft Foods sells a brand of coffee additional expenditures. General Foods imple-
that complies with international bfair-tradeQ mented a CRM campaign for one of its premier
standards (McLaughlin, 2004). Last year, the marques, powdered orange juice Tang. For every
firm bought 5 million pounds of certified fair coupon used at point of purchase, the company
trade coffee, and will double the volume this donated 10 cents to the advocacy group Mothers
year. Fair trade refers to a set of guidelines Against Drunk Drivers (MADD). The program soli-
created by the non-profit trade group TransFair cited $100,000 for MADD, and sales of Tang climbed
USA. Much like an Underwriter’s Laboratories 13%. What made these results particularly note-
seal of approval, the guidelines, if followed, worthy was that General Foods did not run a
imply that the product adheres to high environ- separate costly promotion for Tang. The spike in
mental, wage, and labor standards. Business sales was thus almost solely attributable to the
activity programs help build awareness of a MADD tie-in (Saffir & Femina, 1999).
corporation’s ethical practices, but here, too,
there is no specified donation. 6.2. It builds the brand
! Target focused programs: Target-focused pro-
grams are those that aid a particular group,
Another benefit of CRM to companies is brand
often the company’s core market segment. Taco
building. Firms select causes for which, they
Bell, a youth-oriented brand, sponsors Boys &
believe, their customers have an affinity, hoping
Girls Clubs of America organizations and events
this will translate into higher brand memorability,
(Tanen et al., 1999). These programs strengthen
preference, and purchasing. Studies have shown
the bond between the company and its primary
that consumers have more favorable attitudes
customers. The business provides assistance to
toward brands that are tied to a cause than those
the charity in a variety of ways, including
that are not (Webb & Mohr, 1998). For Levis and
donations, volunteers, materials, and publicity.
other companies targeting the youth market, it is
TeenSupreme, a Boys & Girls Club of America
also important to know that three-fifths of teens
program, started reading projects for teenagers
(60%) are more positively disposed toward and
and opened leadership centers through the
likely to buy brands that support charitable causes
assistance of Taco Bell. Additionally, the part-
(Gard, 2004). Ben & Jerry’s, under its founders,
nership has raised over $10 million dollars for
applied CRM as a brand building tool. The premium
TeenSupreme.
ice cream maker positioned its brand as socially
sensitive by giving a portion of sales to preserve
rainforests and support independent farmers. The
6. CRM benefits both sides cause may be a secondary consideration in the
purchase decision; taste, after all, is the most
Proponents and practitioners of CRM maintain that important quality in this category. Yet, the idea
the strategy is very useful. The growing tide of that the company is giving back to the community
dollars directed to CRM programs suggests this as strengthens customer loyalty and elevates sales.
well. To understand why this trend is occurring, we Footwear maker Timberland recognized the brand
describe reasons for, or benefits of, engaging in building value of CRM when it recently placed an ad
CRM. We begin with those for corporations, and in Vanity Fair to drive people to its website and
then move on to those for NPOs. match would-be donors with causes. Last year, 8000
people were paired with community projects in 36
states, reinforcing the environmentally attuned
6.1. It helps the bottom line
image of the brand.
CRM’s primary value to businesses is financial. A
well-designed campaign can be extremely profit- 6.3. It enhances the corporate reputation
able. American Express’ Statue of Liberty campaign
is an illustration. As noted earlier, the company saw Through an association with a popular cause, the
card usage rise by 28% and applicants increase by stature and image of a corporation can be enhanced.
17%. These numbers translated into millions of More specifically, CRM can lend a firm heightened
448 M. Berglind, C. Nakata

visibility and respect, as well as convey social 6.6. It increases funding for NPOs
responsibility, public mindedness, and even patrio-
tism (Varadarajan & Menon, 1988). Studies have The major benefit to NPOs and the primary reason
shown that CRM campaigns generate positive assess- for engaging in CRM is expanded funding. Through
ments of a company by consumers (Webb & Mohr, this vehicle, non-profits have access to increased
1998). Furthermore, under the right circumstances, financial resources for delivering messages and
the brand can be inextricably tied with the cause. conducting activities on behalf of their cause.
Avon has so deeply committed resources to and Few campaigns can match the success of the
adroitly executed a breast cancer CRM campaign for Olympic Games and United States Olympic Com-
many years that, in the eyes of customers, its mittee. Coca-Cola, McDonalds, and dozens of other
foundation logo appears incomplete unless it companies have donated millions to both NPOs for
includes a pink ribbon, the symbol for breast cancer. many years. In exchange for donations, corpora-
tions are allowed to put the logo of each organ-
ization on products and marketing materials. The
6.4. It generates goodwill
2002 Salt Lake City Winter Games reached new
heights in licensing-based fundraising: Corporations
CRM can also generate goodwill for a business. In
donated $5 million to $10 million each for use of
times of crisis, goodwill may be crucial to prevent
individual U.S. Olympic Team logos, and $20 million
long-term damage. bCrisisQ describes any number of
to apply the Olympic rings in advertisements. In
negative events that may befall a company, from
total, the Olympic non-profit organizations
accounting scandals and bad business practices to received $860 million from over 64 companies.
cases of product liability and product tampering.
When a crisis occurs, customers are less likely to
abandon a company that has built a reputation as a 6.7. It heightens NPO exposure and message
socially responsible organization, suggesting CRM efficacy
may be a useful long-term investment. Research
shows CRM creates positive attitudes toward a CRM provides more than monetary benefits.
company that has engaged in unethical practices Through these promotions, the NPOs enjoy far
(Creyer & Ross, 1992). Nike, which has worked hard greater exposure than they would be able to attain
to overcome negative publicity on purported use of on their own. The exposure encompasses all
sweatshop labor, last year gave $1 million to the members in the corporate partner’s supply chain
Lance Armstrong Foundation and sold bracelets for and customer base. When that corporation is on the
$1 to generate additional donations. Thus far, over scale of McDonald’s, the message contact rate is
$20 million worth of bracelets have been sold. almost incalculable (McDonalds is the world’s
Moreover, the bracelets are considered so cool and largest restaurant chain, with millions of customers
desirable that they are even passed out as wedding and a global network of suppliers). As much as NPOs
reception favors (Gard, 2004). lend credibility to firms, firms lend credibility to
NPOs. Therefore, a second benefit is message
efficacy: A message delivered through an alliance
6.5. It improves employee morale and
with a well-known and respected business is
retention penetrating and persuasive. A corporate partner
A final reason or benefit for companies to engage in with the stellar reputation of, say, Johnson &
CRM is internal in nature: improved employee Johnson lends stature and salience to the message,
recruitment, retention, and morale. Corporate generating media attention and influencing the
employees and owners derive a sense of satisfaction public on behalf of the cause.
and pride from helping a worthy cause. This human
resources-building facet of CRM cannot be under- 6.8. It provides non-financial resources to
estimated. According to one study, 75% of respond- NPOs
ents consider a company’s commitment to social
issues when deciding where to work (Cone Commu- What should not be overlooked is that corporations
nications, 2002). Another study shows that in firms also provide their marketing talent and business
producing advertising campaigns with a social acumen to the development and implementation of
dimension, the workforce is more motivated and campaigns. These non-financial resources are argu-
better understands the essence of the corporate ably as critical as any other. CRM campaigns are
mission than would otherwise be the case (Drum- complex to create and implement. Therefore,
wright, 1996). corporate assistance in conceptualizing, shaping,
Cause-related marketing: More buck than bang? 449

and delivering the promotion can make all the observers claim that by highlighting critical needs
difference between a successful and failed CRM and generating compassionate giving, the ads
endeavor. Finally, if the corporation institutes an represent marketing’s greatest contribution to
internal employee program as part of the CRM, the society (Smith, 1994).
NPO receives human resources in the form of new Breast cancer campaigns have received some of
volunteers and advocates for its cause. the harshest criticisms. Watchdog groups and
observers of commercial trends have pointed out
that breast cancer survivor networks and CRM
campaigns have created an insidious, victimizing
7. Ethical issues surrounding CRM culture they label the bCult of Pink Ribbons.Q
Journalist, author, and breast cancer survivor
The nature of CRM triggers a range of reactions,
Barbara Ehrenreich characterizes this culture as
from positive to negative. Negative reactions are
infantilizing women, a form of sexual oppression
rooted in ethical concerns raised most vocally by
and subjugation:
parties outside these arrangements. Nonetheless,
more sensitive players in the CRM game are also b. . .the breast-cancer cult serves as an accomplice
aware of these issues, and are finding ways to in global poisoning—normalizing cancer, prettying it
address them. We describe these issues because up, even presenting it, perversely, as a positive and
they influence perception, use, and efficacy of enviable experience.Q
these campaigns. (Ehrenreich, 2001, p. 53)

7.1. Marriage of strange bedfellows Another charge is that breast cancer CRM
obfuscates important issues. Think Before You Pink
The first issue is a marriage of strange bedfellows. To has drawn a causal connection between beauty
some, profit and non-profit alliances are at best products and breast cancer. Others have simply
complicated and at worst unworkable. Observers noted that the Cult of Pink Ribbons has diverted
such as Don Schultz of Northwestern University’s funds toward victims and away from research on
Medill School of Journalism view the marriage as cancer agents. There may be environmental causes
unholy: bThe lines are being blurred by for-profit for cancer, and identifying these substances would
organizations who are trying to profit from non- prevent the disease from occurring in the first
profits, wrapping themselves in the cloak of dpublic place, thereby saving many more lives than treat-
serviceT for corporate benefit.Q (Liesse, 1990, p. 28) ing the disease, after the fact. The American
There is fear that the union of these two interests Cancer Society has been identified as especially
damages the cause. The goal of the for-profit complicit. Quentin Young, a Chicago-based medical
organization is to build value for shareholders, which activist, said the American Cancer Society has a:
is perceived by some to be in direct conflict with the
objective of the non-profit, namely to improve social b. . .longstanding track record of indifference and
conditions, educate, enlighten, and heal. Critics of even hostility to cancer prevention. . .. Recent
CRM worry that the worthy missions of non-profits are examples include issuing a joint statement with
being co-opted by rapacious marketers. Underlying the Chlorine Institute justifying the continued
these criticisms is the question of whether the global use of persistent organochlorine pesticides,
differing interests can be reconciled without serious and also supporting the industry in trivializing
compromise to one, the other, or both sides. dietary pesticide residues as avoidable risks of
childhood cancer. ACS policies are further exempli-
fied by allocating under 0.1 percent of its $700
7.2. Walking the fine line
million annual budget to environmental and occu-
pational causes of cancer.Q (Ehrenreich, 2001, p. 53)
The unhappy verity of some CRM campaigns is
limited benefit for non-profit partners, such as less-
than-expected funding for the cause. An issue that
arises under such circumstances is whether the 7.3. Transparency and honesty
project is about advocacy or exploitation. It is a
fine line between the two, and the temptation Closely tied to the issue of advocacy versus exploi-
toward exploitation is real. CRM ads, for instance, tation is one of transparency and honesty. Perhaps in
have been among the most controversial in market- the fervor to generate support for a cause and boost
ing, triggering charges of base profiteering from the top line, NPOs and corporations may not be
human suffering (Garfield, 1994). However, some completely open and forthcoming to the public
450 M. Berglind, C. Nakata

about all elements of each campaign. A notable budget for a national marketing program; however,
example is pharmaceutical company SmithKlineBee- it could be questioned whether the Statue of
cham’s licensing relationship with the American Liberty restoration would have been better served
Cancer Society. In 1998, the firm was granted a through a $6 million (or even a $2 million) grant,
license to display the American Cancer Society logo rather spending $6 million in advertising in order to
on packages of NicoDerm, its smoking cessation raise $1.7 million. There is also the issue of equity
product. Advertisements claimed that NicoDerm to the consumer. In 2003, American Express
and the American Cancer Society were bpartners in engaged in another Statue of Liberty CRM, promis-
helping you quit.Q Attorneys general of several states ing one cent for every use of its card. This meant
found the claim a material misrepresentation of the that to give $5 dollars to the renovation, a
company’s relationship with the non-profit, and consumer would have had to use an American
asserted that it misled consumers into thinking the Express card 500 times, a frequency that could be
American Cancer Society researched, developed, interpreted as ludicrous and gouging (Gross, 2003).
and approved NicoDerm. In reality, the agreement
was for the company to pay the American Cancer
Society an annual fee to put its logo on certain
products. A lawsuit was filed and SmithKlineBee-
8. Social implications of CRM
cham settled, paying over $2 million for ads to
Beyond the ethical issues surrounding CRM, there
clarify the nature of the agreement (NonProfit Times
are broader social implications. Reflecting the
(n.d.), 2004).
polar reactions to CRM, these implications can be
CRM campaigns do not always detail the specifics
categorized as more versus less favorable.
of an agreement, meaning that transparency and
full disclosure can be the exception. In a study on
this issue, Olsen, Pracejus, and Brown (2003) 8.1. Favorable implications
concluded that some CRM campaigns rely on
consumer misunderstanding about the donations. CRM arguably fills a unique void within the market-
In particular, consumers are susceptible to profit- place: It gives consumers a chance to help the less
equals-price (PEP) and profit-overestimation fortunate and do so in regular and convenient ways.
effects. The PEP effect occurs when consumers A shopper can buy a container of yogurt and, in the
are confused about whether a percentage of profit process, support hunger relief or breast cancer
or price is given to the charity. The latter would be research through a purchase-based donation. In a
of greater value, but consumers are sometimes too time-pressed and economic-uncertain age, few
hurried when making purchases to figure the size of individuals are able to volunteer for charities or
their individual donation. write hefty donation checks. By tying charity with
an everyday act, namely shopping, CRM provides
opportunities for individuals in their ordinary
7.4. Financial equity routines to also be caring citizens.
To the degree that the giving, however small the
The fourth ethical issue is financial equity. Since amount, elevates consciousness about the needs of
consumers do not always know what is the agreed- fellow humans, CRM can contribute to a more
upon share of sales that goes to NPOs in CRM compassionate marketplace. CRM gives consumers
arrangements, it is easy for them to overlook the a chance to assert that they are more than just
financial equity to all parties. American Express’ economic beings. By participating in CRM projects,
bCharge Against HungerQ CRM raised $5 million a consumers help humanize what would otherwise be
year for the anti-hunger non-profit Share Our a purely instrumental transaction, gratifying more
Strength. It is widely considered one of the most than the self. Karl Marx argued that consumerism
successful CRM campaigns, spawning several imi- glorifies, and thereby fetishizes, all exchanges;
tations. However, the bCharge Against HungerQ thus, every interaction, from love and sex to
campaign has raised questions. Why, it was asked, friendship and work, is debased into utilitarian
did American Express cap its annual contribution to trade. However, a counter perspective holds that
$5 million at the inception of the campaign, when individuals purchase a product as an act of
regardless of the level of sales generated? In the charity, they are, in a sense, rebelling against this
case of the company’s more famous Statue of debasement. Buying a product that supports a
Liberty campaign, American Express spent $6 social cause is a way of injecting social and
million on advertising while generating $1.7 million personal meaning back into the marketplace
for the cause. Six million dollars may be a standard (Brown, Fleetwood, & Roberts, 2001).
Cause-related marketing: More buck than bang? 451

Another social implication of CRM is that it can 8.2. Less favorable implications
encourage corporate citizenship and social respon-
sibility among businesses. The 2002 Cone Citizen- One less favorable social implication is that CRM may
ship Survey indicated that 84% of U.S. consumers distort the pattern of giving, disadvantaging less
are more likely to buy from corporations associated attractive but nonetheless worthy causes. What
with a cause or issue (www.coneinc.com). Consum- happens to causes that do not elicit such deep
ers, then, want and will reward corporations that emotional responses as does breast cancer? What is
are ethical actors. This inclination has been ampli- the fate of causes that are complex, ambivalent, or
fied since September 11, 2001. Researchers have even revulsive? For many years, there were no CRMs
observed that corporate citizenship survey numbers focused on AIDS. In 1993, the originators of the
changed significantly after the terrorist attacks on California AIDSRide charity event could find only one
the World Trade Center and Pentagon, as illustrated corporate sponsor. Fortunately, this has changed,
in Table 1. but the stigma of homosexuality and illicit drug use
Based on these survey results, firms would be made HIV/AIDS causes unpopular for awhile. Con-
encouraged to expand their socially directed activ- Agra, a large U.S. food corporation, illustrates how
ities, including CRM. The corporate governance certain causes may be selected over others, despite
scandals and ethical lapses of the past few years equal or even greater need or merit. The firm has
have only fueled the demand for more responsible adopted hunger as its social issue. Interestingly,
business practices. In the long run, society should ConAgra’s CRM focuses not on hunger in general, but
benefit. on childhood hunger, specifically. Adult hunger is
Ultimately, we look to historical examples of CRM numerically a larger problem: there are 5 million
to evaluate its social worth. We can cite, for adults versus 2.7 million children who go to bed
instance, increased awareness of breast cancer hungry every night. Adult hunger is no less worthy of
and count the dollars raised to diagnose and treat cause dollars than childhood hunger, but perhaps
the disease. In the 1970s, breast cancer was barely a suffers from less appeal. If CRM continues to grow at
whisper in American society, ba dread secret, its rapid clip of $200 million in spending per year,
endured in silence and euphemized in obituaries as some causes will prosper while others will languish.
a dlong illnessT.Q (Ehrenreich, 2001, p. 53). Treat- A second implication is that if CRM becomes
ments such as the Halsted radical mastectomies highly ubiquitous, it may, in the long run, have
were drastic, disfiguring, and often ineffective. As exactly the opposite of its intended effect, desen-
part of the procedure, doctors removed breast sitizing the public to social ills and increasing
tissue, lymph nodes, and chest muscle. Testing rates resistance to giving. It is not difficult to imagine
for breast cancer were low, even though one in ten CRM campaigns interjecting themselves into the
women suffered from the disease. Today, breast millions of purchase transactions that take place
cancer is discussed more openly, treatment options each day. Like TV, print, radio, and Internet
have improved, and survival rates have increased advertising, CRM campaigns may bombard people
dramatically. In 1983, 78% of women with breast with their pleas for attention. In response, individ-
cancer survived with treatment; by 1999, that rate uals may simply tune out and say bnoQ because they
had risen to 87%. Between 1975 and 1990, the death cannot process each and every request, or because
rate due to breast cancer rose .04% annually, they believe they have already donated enough.
whereas from 1990 to 2000, the rate decreased Giving, or compassion, fatigue refers to a condition
23%. Lives were saved by the hard work of research- whereby donors become overwhelmed by requests
ers, doctors, and survivors; however, the mobiliza- for their charitable dollars. Non-profit develop-
tion of resources around the issue by corporations, ment officers and fundraisers typically use the term
cancer foundations, and breast cancer CRMs has in relation to large corporate donors, but it applies
likewise undoubtedly contributed to lives saved. equally to the more numerous small donors. What

Table 1 Consumer attitudes toward businesses pre- and post-September 11


bA company’s commitment to social issues is important when I decide. . .Q Pre-September 11, Post-September 11,
2001 (March 2001) 2001(July 2002)
Which companies I want to see doing business in my community 58% 84%
Where to work 48% 77%
Which products and services to recommend to other people — 75%
Which stocks or mutual funds to invest in 40% 66%
2002 Cone Corporate Citizenship Survey, www.coneinc.com/Pages/pr_13.html.
452 M. Berglind, C. Nakata

happens when consumers tire of paying a premium also transforming a corporation’s culture and mov-
to help others? Is giving fatigue CRM’s ultimate ing the business toward an enduring commitment to
future? It may come to pass that any strategic social responsibility, there must be involvement of
advantage cause-related marketing grants will, top management. Chief executive and operating
through overuse, erode over time. officers can lend legitimacy to CRM campaigns by
The last and perhaps most subtle implication is signaling to the ranks below that they and the firms
that CRM may diminish the compunction of individ- really do care about social needs. Because of their
uals to act magnanimously toward others without powerful positions, these executives can sanction
expectation of return. CRM may work counter to and direct internal resources, whether monetary or
self-sacrificing sentiments by substituting con- human, toward CRM efforts. One study reported
sumption for morality (Smith & Higgins, 2000). that top managers are more actively involved in
Under CRM, a consumer can buy an item and justify CRM campaigns compared to standard, non-social
it by rationalizing some of the proceeds go to the advertising programs (Drumwright, 1996). Often,
needy. Is it still, then, charity? According to Kant, these managers possess a personal commitment to
bthe essence of morality is found in the motive the social agenda behind the CRM project because,
responsible for the action. An act is only moral having grown up in the tumultuous 1960s, they
when it derives from a sense of duty.Q (Smith & believe individual and collective activism can make
Higgins, 2000, p. 315) Applying this Kantian notion, a positive difference.
can we classify CRM participation as virtuous, since
it is as much about the giver satisfying the self as it 9.2. Carefully pair cause and company
is about altruism? Also, CRM has been critiqued for
distancing the needy bother,Q who, having never
Another recommendation is to carefully pair the
been met, touched, or spoken to directly by givers
cause and company. The notorious Sunbeam-Amer-
is, in effect, a faceless, nameless abstraction
ican Medical Association CRM failed in part due to a
(Smith & Higgins, 2000). This long-arm relationship
perceived incongruence between the two partners.
between givers and recipients potentially under-
It was not readily apparent why a not-for-profit
mines the morality of the donation act by relieving
medical organization would lend its moniker to a
givers of any true authorship for their conduct.
maker of toasters and eggbeaters. Additionally,
Sunbeam was led by a CEO with a public persona of
being uncompassionate, laying off thousands of
9. Suggestions for developing and using workers while continuing to enjoy a healthy salary.
CRM This is contrary to the thrust of any CRM. By contrast,
the CRM between Toys R Us and Sesame Street
reflects a more obvious and intuitive partnership.
CRM is not a neutral instrument. It raises social and Toys R Us sells toys, and Sesame Street is a children’s
ethical issues, and offers clear benefits to NPOs and public television program. A percentage of the sale
businesses. Despite this complexity and controversy, of each Sesame Street licensed toy at Toys R Us goes
there is little reason to believe the practice will be to pay for the program. Perhaps the guiding rule is if
abandoned any time soon; on the contrary, it is likely you have to explain the connection, the fit between
to grow. Along with the upward trends described cause and company is likely poor.
earlier, a recent survey by the Public Relations
Society of America found that most companies plan
to expand corporate social responsibility endeavors,
9.3. Thoughtfully develop the creative
which presumably include CRM. Given that CRM is execution
taking root, the prudent course may be to recognize
its potential for good, but follow a regimen or set of Social campaigns are more challenging than stand-
guidelines that would better ensure realization of ard campaigns to conceive and produce, mostly
this potential. With that in mind, we make several because they must achieve multiple objectives. The
recommendations for more effective and thoughtful company’s product must be sold, but so too the
development and use of CRM. social issue. Social issues, however, raise sensitiv-
ities: the sensitivities of those who are sympathetic,
as well as those who are antagonistic. Since both
9.1. Involve top management groups are likely to be exposed to the campaign, the
creative execution must deepen the commitment of
For a CRM campaign to succeed in not only raising the first group while ameliorating the objections of
financial and non-financial support for a cause, but the second. At the same time, the execution must
Cause-related marketing: More buck than bang? 453

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