Cause Related Marketing: An Indian Context

by Anoop Mohan

ABOUT THE AUTOHR(S)

Mr. Anoop Mohan has received MBA in Marketing from

Adaikalamatha Institute of Management,Thanjavur and

M.Phil in Management Studies from Jamal Institute of

Management, Trichy. He has worked as a Territory

Executive in Eureka Forbes during Sep’11 to Apr’12. He

has published 2 articles in international referred journals.

Currently he is pursuing his Ph.D., in Management from

PSGR Krishnammal College affiliated to Bharathiar

University, Coimbatore under the guidance of Dr. S.

Ranjithkumar, Associate Professor, Department of Research & Development,

Bharathiar University, Coimbatore.

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Anoop Mohan

105 © 2015, IJASRD, All Rights Reserved

AB S TR A CT

ause marketing or cause-related marketing refers to a type of

marketing involving the cooperative efforts of a "for profit"

business and a non-profit organization for mutual benefit.

The term is sometimes used more broadly and generally to refer to

any type of marketing effort for social and other charitable causes,

including in-house marketing efforts by non-profit organizations.

Cause marketing covers a wide range of marketing activities for a

business. Primarily, it aims to link product or services of a company

to a social cause. This leads to greater sales and more importantly,

builds favorability in the minds of customers. Cause related

marketing is a communication tool for increasing customer loyalty

and building reputation. Cause related marketing is one of

phenomenal tool of marketing practice, which has significance effect

on sales of the companies. Indian consumers find cause-related

marketing campaigns more novel and attribute higher levels of

altruistic motives for companies engaging in this tactic Indian

consumer are also more positive when campaigns are undertaken by

an Indian company versus a multinational corporation.

KEY W O R D

Cause Related Marketing, Corporate Philanthropy, Corporate

Social Responsibility, Companies Sales

C

Cause Related Marketing: Indian Context

Volume 02, Issue 03, Jul – Sep’ 2015 106

I. INTRODUCTION

“Cause Related Marketing (CRM) is a marketing strategy that targets the social

concerns of consumer groups. A company connects its own marketing and sales goals to a

social cause, or charity, to the mutual benefit and promotion of both partners. The business

goal: to develop customers’ trust and loyalty, improve corporate reputation and ultimately

increase sales.”

“The public association of a profit company with a non-profit organization for the

purpose of promoting the company’s product or service while raising money for the

charitable organization.”

“Cause marketing or cause-related marketing refers to a type of marketing involving

the cooperative efforts of a "for profit" business and a non-profit organization for mutual

benefit. The term is sometimes used more broadly and generally to refer to any type of

marketing effort for social and other charitable causes, including in-house marketing efforts

by non-profit organizations.”

Cause Related Marketing (CRM) defined by Varadarajan and Menon (1988) provide

the grounds for later research it can be defined as integrated step-by-step process of

developing, maintaining, along with integrating marketing activities. These activities are

associated with special cause that is being supported by the firm with an announced amount

of revenue generated by customers and company focuses the mutually beneficial long-tem

relationship with their customers.

Cause marketing covers a wide range of marketing activities for a business. Primarily,

it aims to link product or services of a company to a social cause. This leads to greater sales

and more importantly, builds favorability in the minds of customers.

The term, ‘cause marketing’ has been mistaken to signify ‘corporate philanthropy’

and ‘social marketing’. However, it cannot be related to either of them. According to the

Business in the Community, the leading British corporate social responsibility organization, it

(cause marketing) is “a commercial activity by which businesses and charities or causes form

a partnership with each other to market an image, product or service for mutual benefit.”

Supporting a specific cause and being public about this support gives companies

identifiable personalities, demonstrates what they stand for and helps them connect with

customers, suppliers, investors, employees and the community. Cause marketing programs

allow the consumers to overtly and publicly express their belief in and support for the causes

that are most important to them.

Cause related marketing is a communication tool for increasing customer loyalty and

building reputation. Cause related marketing can be understood as a strategic positioning and

marketing tool which links a company or a brand to a relevant social cause or issue for

mutual benefit. It is the initiation and funding of deserving causes. Cause related marketing is

a strategic marketing activity a way for a company to do well by doing good-distinct from

sales promotion, corporate philanthropy, corporate sponsorship, corporate Samaritan acts and

public relations, though it is often an amalgam of such activities.

Nothing builds brand loyalty among today’s increasingly hard to please consumers

like a company’s proven commitment to a worthy cause. Other things being equal many

Anoop Mohan

107 © 2015, IJASRD, All Rights Reserved

consumers would do business with a company that stands for something beyond profits. In

nutshell, cause related marketing results in increased sales, visibility, and consumer loyalty

and enhanced company image along with positive media coverage.

II. CORPORATE PHILANTHROPY

Philanthropy derives from the Greek term Philanthropos, which means the "love of

humanity" (Philos-love and Anthropos-humanity or mankind). While the roots of charity are

often religious or moral in nature, philanthropy is based on broader humanitarian principles.

Philanthropy broadly encompasses any altruistic activity intended to serve others, or the act

of donating money, goods and services to support a socially beneficial or humanitarian cause,

with no financial or material reward to the donor. More specifically, charity focuses on

solving a current problem, or responding to an immediate need of an individual or a group,

whereas philanthropy aims to effect change through giving. It encompasses any attempt to

deal with the problems of society as a whole, by preventing the conditions that created those

problems and addressing the root causes of individual or collective needs. Philanthropy often

relates to expression of one's values be they religious, cultural or personal.

III. CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility and cause related marketing are more than buzz words

today."Corporate social responsibility is the continuing commitment by business to behave

ethically and contribute to economic development while improving the quality of life of the

workforce and their families as well as of the local community and society at large." People

might think Corporate Social Responsibility (CSR) and Cause Related Marketing (CRM) to

be quite similar. But there is a very fine line between CSR and CRM. CSR is when the firm

tries to give back to the society what it gains from it, whereas cause related marketing is

when it invests time and money towards a particular cause.

IV. HISTORY OF CRM

The term ‘Cause Related Marketing’ was actually coined during a 1983 campaign by

American Express. In that campaign, every time an American Express Card was used

anywhere by anyone, the company donated one cent to the Statue of Liberty Restoration

Project. It is worth noting that during that campaign, American Express saw a 17% increase

in new users and a 28% increase in card use. The creation of the term is credited to American

Express, who helped raise close to $2 million over a four-month period for the Statue of

Liberty Restoration project. The marketing campaign led by the company used a penny for

every use of their card and a dollar for every card they issued for the restoration project.

V. CAUSE RELATED MARKETING OBJECTIVES

Building corporate, brand and product awareness

Increasing sales and income

Developing trial and repeat purchases

Promoting a new product

Promoting differentiation

Cause Related Marketing: Indian Context

Volume 02, Issue 03, Jul – Sep’ 2015 108

Adding value.

VI. CAUSE RELATED MARKETING BENEFITS

Market Differentiation: CRM helps to create an alternative and distinctive approach

to brand advertising.

Outreach to Niche Markets: Partnering with nonprofit organizations can help a

company to connect with specific demographic or geographic markets.

Motivated and Loyal Employees: Companies can attract and retain quality

employees.

Reinforced Company Mission: CRM efforts can help communicate to employees,

customers, suppliers and other stakeholders a company’s commitment to corporate social

responsibility.

Attracting and Retaining Customers: Long-term efforts help attract and build long-

term relationships with customers. There are expectations for companies to go beyond their

call of duty. Propensity of consumers to switch is far higher when they find that a company

supports a social cause.

VII. SCOPE AND FORMS OF CAUSE RELATED MARKETING IN INDIA

CRM is although a phenomenon that had its roots in the western countries, but it has

gained rapid acceptance in India in recent Years.According to Professor Alan Andreasen,

there can be three forms of alliance between the „forprofit and „non-profit organizations.

They are as follows:

1. Transaction-based promotions: Programs that elicit participation with an offer to

make a contribution to a designated cause based on consumer activity such as buying a

specific product, redeeming a coupon, registering at a website or shopping at a particular

retail chain.

2. Joint-issue promotions: Joint campaigns that raise awareness of a cause‟s

message (e.g. fight skin cancer) or participation in its programs (e.g. join us in a coastal

cleanup) while building a positive association with the corporate sponsor or its brands.

3. Licensing: Independent Sector defines cause-marketing licensing as “An

agreement in which the nonprofit allows its information or knowledge to be used for a fee or

an agreement in which a nonprofit's name is attached to a product. Typically, a nonprofit

licenses a company to develop, produce, market and/or distribute a mission-related product

that is promoted either with the organization's brand name or co-branded with both the

company's and nonprofit's names.” This form of alliance is not yet practiced in India.

The above three forms covers a part but not the whole gamut of CRM. Various forms

of CRM are created or are defined only by the limitations of one‟s imagination.CRM simply

means marketing related to a cause. The confine CRM to one, two or three types will be

erroneous as marketing is in its developing stage and with the development of marketing; we

are going to see other forms of CRM too. As we say that, Marketing-mix consists of 4P‟s i.e.

product, price, place and promotion, CRM is a part of the last „P‟ i.e. promotion. It can be

demonstrated through advertising, sales promotion, sponsorship, direct marketing, publicity,

Anoop Mohan

109 © 2015, IJASRD, All Rights Reserved

and many more aspects of marketing. The list of promotion-mix is growing day by day and

so is the scope of CRM. In the following paragraph an attempt has been made to understand

how in the Indian market scenario, the marketer is using various communication tools to

exhibit CRM

VIII. INDIAN SCENARIO

Indian consumers find cause-related marketing campaigns more novel and attribute

higher levels of altruistic motives for companies engaging in this tactic. Indian consumers are

also more positive when campaigns are undertaken by an Indian company versus a

multinational corporation. However, the beneficiary of the campaign (a local or worldwide

charity) does not impact attitudes toward the campaign for either consumer group.

IX. CAUSE RELATED MARKETING CAMPAIGNS IN INDIA

In India, Procter & Gamble (P&G) has pioneered a number of cause marketing

programs, which are aimed at rebuilding lives of young children in India. Project Drishti

was aimed to restore sight for nearly 250 blind girls across the country. It was the first ever

sight restoration corporate project which was undertaken in association with the National

Association for the Blind (NAB). As a part of this, for every pack of Whisper sold, Re 1 went

for the project.

‘Shiksha’ is a program by P&G, in association with Child Rights and You (CRY) and

Sony Entertainment Television, which aims to support the education of children in India.

Tata Tea, one of India’s largest tea brands, started ‘Jaago Re’. It transformed tea from a

means of physical rejuvenation to a widespread social awakening. The Jaago Re One Billion

Votes campaign, which was well-timed (in terms of launch) with the Indian elections, spread

the message of the need to vote among citizens. It is estimated that over 6.5 lakh Indians used

the platform to register as voters. Recently, Aircel launched the ‘Save Our Tigers’, a

campaign, which is aimed to encourage citizens to blog about the depleting tiger population,

and to stay up-to-date with tiger facts. Interested people can also donate money to NGOs

working for the cause.

'Project Saraswati' undertaken by the Fair & Lovely Foundation, promoted

economic empowerment of India’s young women. Under the project, scholarships of up to a

lakh were awarded to young deserving girls from across the country to pursue their graduate

and postgraduate course.

Horlicks Ahaar Abhiyan is an initiative that aims to increase awareness among

mothers, families and communities about the issue of malnutrition among children in the age

group of 3 – 6 years. The initiative will be implemented in a phased manner beginning with a

pilot project, in partnership with CARE India, in the state of West Bengal and with Save The

Children, in the state of Tamil Nadu.

As part of this project, Horlicks aims to partner with its consumers to raise funds for

spreading awareness about better nutrition for children, training health workers and creating

integrated child development programmes. With the sale of every bottle of Horlicks of more

than Rs. 100, the company will contribute Re 1 towards the initiative.

Cause Related Marketing: Indian Context

Volume 02, Issue 03, Jul – Sep’ 2015 110

X. CONCLUSION

Corporate social responsibility and cause related marketing are more than buzz words

today. Though a few big Indian companies practice Cause Marketing, the extent to which it is

done is unimpressive. There has been growing awareness among the academic institutions as

well towards cause related marketing and corporate social responsibility as a subject to

sensitize the future managers of this nation to the societal needs besides generating profits for

their organizations with increased efficiency. It is easier said than done. Cause-related

marketing campaigns vary in their scope and design, the types of nonprofit partners, and the

nature of the relationships between companies and their marketing partners.

REFERENCES

[1] Varadarajan, P.R. and Menon, A., 1988. Cause related marketing: a co-alignment of

marketing strategy and corporate philanthropy, Journal of Marketing, 52(July), 58-74.

[2] Adkins, S. (2004). Cause related marketing: who cares wins. Oxford: Elsevier

Butterworth-Heinemann.

[3] Adkins, S., 1999. The wider benefits of backing a good cause, Marketing, September, 20-

21.

[4] American Express Launches National Campaign to Re-open the Statute of Liberty.

(2003). American Express Current News Release.

[5] Kanthiah alias Deepak .R (2013), The marketing strategy of Cause affiliated and

consumer purchase persistence between the industries, Review of Research Vol 2,

Issue 11, Aug 2013, 395.