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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 marketing differs from corporate giving (philanthropy) as the latter generally involves a specific donation that is tax deductible, while cause marketing is a marketing relationship not necessarily based on a donation.
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One of the first "cause marketing" campaigns occurred in 1976 through a partnership between the Marriott Corporation and the March of Dimes. Marriott’s objective was to generate highly cost-effective public relations and media coverage for the opening of their 200-acre (0.81 km2) family entertainment center, Marriott’s Great America in Santa Clara, CA. The March of Dimes's objective was to greatly increase fundraising while motivating the collection of pledges by the program’s deadline. The promotion was conducted simultaneously in 67 cities throughout the Western United States. It exceeded all goals to become the most successful promotion in the history of Chapters West of the March of Dimes, while providing hundreds of thousands of dollars in free publicity and stimulating the record-breaking opening of the Marriott entertainment complex.
The program was conceived and directed by Bruce Burtch, who went on to become a nationally-recognized catalyst for cause marketing programs. Burtch is credited with coining the phrase, "Do Well by Doing Good", which was his answer to the CEO of a major corporate foundation when asked what his goal in life was in 1977.
Another of the first examples of a "cause-related marketing" campaign was initiated in 1979 by Rosica, Mulhern & Associates for Famous Amos cookies[1]. In this campaign, Wally Amos became the National Spokesperson for the Literacy Volunteers of America.[2] According to the organization, Wally has alerted more people to the illiteracy problem than any other person in history. This strategic cause-marketing tie-in helped to tell the Famous Amos Cookie story while maintaining visibility and is responsible for many new and expanded literacy programs. This case study is now used in university classrooms nationwide as an example of successful "cause-related marketing". In 1982 Nancy Brinker, founder of Susan G. Komen for the Cure was an early pioneer of cause marketing, allowing millions to participate in the fight against breast cancer through businesses that share Komen's commitment to end the disease.[3][4][5]
Cause Related Marketing has been in existence for decades, indeed centuries, as the early Lever example indicates. The recent interest in Cause Related Marketing is generally argued to stem from American Express, who apparently coined the phrase in 1983. Following various pilot schemes in 1981, American Express developed a campaign which donated funds to a number of different non-profit organizations as part of the San Francisco Arts Festival. Essentially every time someone used an American Express Card in the area, a 2 cent donation was triggered and each time new members applied for a card a larger contribution was made. The marketing goals that American Express had for this programme were apparently exceeded. Card usage was reported as having increased significantly and relationships between American Express and their merchants also improved as a result of the promotion. From the charity's point of view, despite being a short-term campaign, $108,000 was raised, making a significant contribution to their work. The terms "cause-related marketing" and "cause marketing" continued to grow in usage since that time. In more recent years the term has come to describe a wider variety of marketing initiatives based on the cooperative efforts of business and charitable causes. [6]
According to a report published by onPhilanthropy[7], cause marketing sponsorship by American businesses is rising at a dramatic rate. Citing an IEG, Inc. study, $1.11 billion was spent in 2005, an estimated $1.34 billion will be spent in 2006, and the number is expected to rise further in 2007. As an update, IEG [8] reported that $1.44 billion was spent in 2007 and $1.52 billion in 2008. Due to the recession, growth is expected to slow in 2009 with the projections being $1.57 billion total to be spent on cause marketing.
Cause-related marketing is a powerful marketing tool that business and nonprofit organizations are increasingly leveraging. According to the Cone Millennial Cause Study in 2006[9], 89% of Americans (aged 13 to 25) would switch from one brand to another brand of a comparable product (and price) if the latter brand was associated with "good cause". The same study also indicated that a significant percentage surveyed would prefer to work for a company that was considered socially responsible. This can be linked to the increase in workplace giving programs. Earlier studies by Cone indicate an upward trend in the number of Americans who associate their own buying habits with cause marketing as well as an expectation that those companies to be "good corporate citizens"[10]. These studies also show a substantial increase from just before to just after the September 11, 2001 attacks.
Numerous other studies[11] have also been conducted to show that cause-related marketing has helped to increase a company's profits. For example, in the cause marketing campaign by American Express (to which the term "cause marketing" is attributed), the company saw a 17% increase in new users and a 28% increase in card usage.
The possible benefits of cause marketing for nonprofit organizations include an increased ability to promote the nonprofit organization's cause via the greater financial resources of a business, and an increased ability to reach possible supporters through a company's customer base. The possible benefits of cause marketing for business include positive public relations, improved customer relations, and additional marketing opportunities.
Although originally a marketing strategy that occurred offline, cause marketing has been conducted more and more through online channels in the last decade. This is due in part to the increasing percentage of households with internet connections. As with other types of marketing campaigns, companies can leverage online marketing channels along with other offline channels such as print and media. (Sometimes referred to as integrated marketing).
In recent years, online auctions have been used in cause marketing strategies using a number of different online auction platforms. Companies have created programs to help sellers and corporations donate a percentage of their sales to a nonprofit orgranization through the use of auctions. Businesses and nonprofit organizations can also use the program for cause marketing and nonprofit fundraising programs.
Cause marketing can take on many forms, including: