Cause-related Marketing

• What is cause-related marketing?
• How does it work?
• How does it influence my decision as a consumer?
• How is it different from corporate philanthropy and corporate sponsorships?
• What are some of the advantages and disadvantages of this?
• What are some guidelines that should be issued to the non-profit organisation that would generate publicity for the financial institution?

Cause-related Marketing

vs

Corporate Philanthrophy/

Corporate Sponsorships

Example of Corporate Sponsorship

• Work closely with the SF. Marin Food Bank as an essential partner to end hunger in San Francisco and Marin
• Donate more than USD 50,000 yearly
• In return, Food Bank will place their logo and website link on their website
• Logos featured on the food barrels in public locations throughout San Francisco and Marin as well as on their regular publications that are subscribed by approximately 50,000 supporters.

Corporate Philanthropy

vs

Corporate Sponsorship

Corporate Philanthropy

Cause-related Marketing

Corporate Sponsorship

• Similar to cause-related marketing
• Corporation gives the non-profit money to hold an event/activity
• In return, they receive recognition (may have some of their logos and brand names displayed)
• Corporate sponsorships are commonly associated with nonprofit groups, who generally would not be able to fund operations and activities without outside financial assistance.

• Corporate philanthropy or corporate giving is the act of corporations donating some of their profits, or their resources, to charitable causes
• Often handled by corporation directly
• All kinds of non-profit groups
• Cash donations (monetary) vs. In-kind donations (non-monetary)
• No expectation of direct corporate gains
• Involves indirect gains

Example of Corporate Philanthropy

• In 2012 alone, their employees donated more than $29 million to support 23,386 non-profit organisations
• Dollar for dollar matching gift program
• In 2002, their employees volunteered for more than 1.5 million hours of service to more than 6,000 non-profit organisations
• Volunteer grants of up to $500

One of the largest and most successful education and fundraising event for breast cancer.

"(RED), U2 and Bank of America Partner to Fight AIDS"

• Bank of America donated $1 to the U.S. Fund every time the new U2 song “Invisible” was downloaded from iTunes on February 2nd and 3rd
• Raised $3,144,477, which can provide over 7.8 million days of life-saving HIV medicine.

• For each new Pink Ribbon MasterCard® credit card opened, Komen receives a minimum of $3 and 0.20% of all net retail purchases made with the card
• Komen also receives $1 for each annual renewal of the card
• For each new checking account and/or debit card opened, Komen will receive $10 and an additional $2 on each annual anniversary of the account opening.

Application to Financial Services

Commonly Used Cause-related Marketing Techniques

• Bank of America
• Leading financial institution in America with a wide consumer base
• Collaborated with many non-profit organisations to promote different social causes
• Two notable examples

1. Product Sales

• Corporation donates part of its profits to non-profit organisation

• Increase in sales and profits
• Statue of Liberty Restoration Project
• One penny for every transaction
• A dollar for every new card issued
• Within four months, 1.75 million was raised
• New users grew by 17%
• Transaction activity jumped by 28%

2. Purchase Plus

• Waged at the checkout line at grocery stores/retail venues
• Promotion of cause is usually pretty low-key

Increased Media Attention

3. Licensing of non-profit's logo

• Non-profit's logo printed on promotional items

4. Co-branded Events and Programs

• Both parties coming together to plan an event supporting a cause

• From 2005 to 2010, the Bank of America has gained much media coverage, including 1,312 pieces of coverage equaling more than 210 million impressions
• Coverage has appeared in key news outlets such as Bloomberg BusinessWeek and the New York Daily as well as on local broadcast stations across the country
• Won nationally recognised awards such as the PRSA New York Chapter Big Apple Award for Community Relations

• Proves that it is socially responsible
• Greater public awareness of its values and willingness to support good causes
• 89% surveyed would switch from one brand to another brand of a comparable product (and price) if the latter was associated with "good cause"
• Earlier studies have indicated an upward trend in the number of people who associate their own buying habits with cause marketing
• Study also showed that more would work for a company that was socially responsible
• Association also results in higher employee morale

Disadvantages

How does it influence our decisions?

Introduction

• "Related" entities
• Considerable concern about non-profits lending their good names to for-profit activities
• Mara Einstein, marketing professor and author, raised these questions in an article in the Chronicle of Philanthropy:
• Does buying products for a cause take the place of writing a check to a charity or going online and signing up for a monthly gift?
• Do large, national nonprofits that have become marketing powerhouses take attention and money away from smaller but just as worthy charities?

How does it work?

• Not an anonymous or low-key donation
• Publicly announces that it is socially responsible and interested in the same causes that its consumers are
• Corporation enjoys the "halo" effect
• Non-profit benefits financially and through a higher public profile

Guidelines Issued to Non-Profit

What is it about?

• Get the necessary financial resources (usually significant)
• Create larger presence in the market using corporation's consumer base
• Create more awareness for the cause involved

1. Clearly describe the promotion.

2. Licensing of non-profit's logo

3. Ensure corporation is associated with the non-profit

4. Non-profit has to maintain on their website key information about all active and recently closed cause marketing campaigns

5. Non-profit should not be involved in any form of activities that will damage the reputation of the corporation.

• 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.
• A marketing tool used to help address social issues through providing resources and funding, at the same time, addressing important business objectives.

Key Learning Points

• A form of marketing technique
• No fixed way of doing it, all depends on both entities involved
• Psychological effect on consumer's buying decision
• Different from corporate philanthropy, but similar to corporate sponsorship
• Mutual benefits for both entities involved, but can be bad if not done carefully
• Applicable to financial services as well

Done by: Lau Jing Jia S10131917F