Socially Responsible Marketing
Table of Contents
Origins of Social Marketing 1
Definition of Socially Responsible Marketing: 2
Social Issues: 2
Bono’s Product (RED) Initiative: Reducing CSR to Cause-Related Marketing by Stefano Ponte, Lisa Ann Richey and Mike Baab 3
Social Marketing Mix 3
Product – offer made to target adopters 3
Price – costs that consumers have to bear 4
Special focus on GAP: 5
ETHICS 6
Definition 6
The Organisational Moral Development Model – Reidenbach and Robin,1991 6
Concerns 7
Segmentation 7
Materialization of society – do the young people receive the correct message? 7
Research - Consumer privacy: 7
Pricing 8
Product development: 8
Distribution 8
Personal selling 8
Advertising 8
International marketing 9
EVALUATION: (PRODUCT)RED Criticisms and Articles 9
Social Marketing vs. Commercial Marketing 10
Mark Rosenman, April 11, 2007 - The Patina of philanthropy 10
Further criticism 12
Advertising - Carla C. J. M. Millar and Chong Ju Choi, 2003 12
Consumer experience – Product Red is a social good and consumers respond back 13
Culture as a commodity 14
The dependence effect: 14
Vance Packard,The Hidden Persuaders, 1957 14
Origins of Social Marketing
· Kotler and Zaltman (1971): application of marketing to solution of social and health problems, and “to sell brotherhood like soap” (Wiebe, 1951)
o We can use marketing to make people choose one thing from hundreds, so why can’t we sell “brotherhood like soap”
· Planned social change which involves an exchange relationship between the client and change agent (Niehoff, 1966)
Definition of Socially Responsible Marketing:
· Harnesses desirable social causes, such as the environment and consumerism, to advance the interests of a commercial organisation
o RED campaign works with Global Fund (non-profit organisation) with each of their partners (Gap, Apple etc.) as the profiting companies behind them
o MTV as another example for this type of socially responsible marketing
· SHOPPING TO SAVE LIVES: PRODUCT RED AND
· THE ILLUSION OF CONSUMER AGENCY
· By MATTHEW ARKELL
·
· Product Red appeals to this sense of "the real" by claiming to offer consumers a way to intervene in a "real" problem: the spread of AIDS in Africa. Product Red essentially constructs a virtual simulacrum of Africa and the AIDS virus for First World markets. The campaign manufactures a vision of the world in which all of Africa's problems can be combated through consumer agency, in other words, through millions of ordinary Americans consuming "Red" products.
Social Issues:
1) Altruistic causes
o E.g. Charity donations
RED works with the Global Fund and gives to the charitable organisation to help alleviate AIDS in Africa
2) Social betterment causes
o E.g. Anti-discrimination, improved environment
RED and their goal of eliminating AIDS or helping provide funding for the pills which could save thousands of lives is their way of working towards social betterment
The most widespread misconception about (RED) was that it was a traditional charity
However:
(RED) saw itself as offering benefits back to its partner companies; as a result, (RED) had therefore intentionally approached the marketing divisions—not the foundation divisions—of possible partners
Additionally, “charity” products tended to have a price markup which meant the donation fell exclusively on the consumer, not the company. (RED) products did not follow this model; the companies themselves covered the donation from their profits
It aimed not to make people feel responsible for or guilty about world problems in order to induce them to buy, but instead to tap into their consumerism by offering them a (RED) choice
Bono’s Product (RED) Initiative: Reducing CSR to Cause-Related Marketing by Stefano Ponte, Lisa Ann Richey and Mike Baab
· Encourages corporations to earn profits as they pursue charity, and pushes the agenda of Corporate Social Responsibility (CSR) towards distant others as opposed to the issues within their own industries
· As consumer attitudes have shifted in recent decades, major brands now understand—and exploit—the popular culture’s ‘yearning to connect to people and things that give meaning to their lives’
· What does RED mean for CSR and the role of business in society? RED is a ‘disengaged’ form of CSR – almost entirely separated from the operations in which these corporations are involved
· RED does not attempt to change or improve the normal functioning of business and trade
· The RED ‘partner’ corporations have a low level of involvement with Africa in their day-to-day operations
· RED is focused on the welfare of Africans with AIDS in general, not of workers in factories producing RED products
o Bono stated explicitly at the Product RED launch that labour issues are of secondary importance to people dying of AIDS: ‘We do not think that trade is bad. We are for labour issues. Labour issues are very serious but six and a half thousand Africans dying is more serious’.
· RED pushes CSR back towards the disengagement that characterizes ‘old-style’ philanthropy, where companies donated some of their profits to relatively unrelated projects
· Use ‘doing good’ to sell a particular set of products – profit is generated and donation is given at the same time. With RED, money making and giving are one and the same
· RED embrace that envelops the logos of these seven companies is itself a good investment
· Brand equity has come to incorporate ethical values and reputation, and as brands are increasingly more about lifestyles than products, actual sales figures of RED products are less important than the media attention generated
Social Marketing Mix
Marketing ethics examines systematically marketing and marketing morality, related to 4P-issues such as unsafe products, deceptive pricing, deceptive advertising or bribery, discrimination in distribution (cf. Smith and Quelch, 1993, p. 13).
Product – offer made to target adopters
Armani - Metal wrap-around sunglasses (style EA 9285/S) launched worldwide. Available in green, rose, blue, smoke grey, grey and brown, all embossed with the Emporio Armani Red logo. The forked frame arms, available in shades of ruthenium, gunmetal and light gold, are superimposed on the single lenses.
Also Product Red Fragrance
Gap - INSPI(RED)"Gap T-shirt: Made in Africa from 100 percent African cotton, the T-shirt debuted in the UK in spring 2006. We've sourced product from Africa for more than a decade
· Clothing Line
· Kids clothing line
· Converse
· Motorola
· Dell
· Microsoft – You get what you want people get what they need
· American Express
· Hallmark – Greeting cards, note books
· Apple - Gift card for purchases at Apple's iTunes online store, for movies, TV shows or music. Currently only available in the US at Apple's online store.
· Also iPod nano and shuffle red
Price – costs that consumers have to bear
Partners were supposed to charge on the same prices – no charity model
50% of the profits went to the product red
However:
The usual presumption about so-called undifferentiated commodities is that they are exceedingly price sensitive. A fractionally lower price gets the business. That is seldom true except in the imagined world of economics textbooks. In the actual world of markets, nothing is exempt from other considerations, even when price competition rages - Theodore Levitt (1980)
Begg (2005) described how monopoly can lead to price discrimination
Although Gap is largely known for its “classic” t-shirts that retail for $14, the Product RED t-shirt sells for $28. Executives state that the 100% price increase is not gouging, but that limited edition products like the RED clothes are simply more expensive to produce (Beattie, 2007)." (Kuehn, Katthleen, 2008: p. 9)
· Place – channels by which change is promoted and places in which change is supported and encouraged
Launch in the UK
US, CANADA
SWITZERLAND
UNIVERSITIES
ORGANIZATIONS
ONLINE AND MEDIA:
o Advertisements for Gap
o Superbowl
o Magazines: Vanity Fair
o Myspace
o VH1
o Oprah (media)
· Promotion – means by which the change is promoted to the target
o Through the use of partners’ own marketing funds
o Used their demographics and target markets to promote (RED); used their core competencies
o Online media
o Television
o Celebrities
o University ambassadors
o Promotion cards
o Presentations
o Word of mouth
Special focus on GAP:
Products
When Gap was founded in 1969, it was unique and new. Its target customers were younger generations. Gap's hottest seller at the time was its "basic" look, which consisted of its signature blue jeans and white cotton t-shirts. Its founders realized that jeans were becoming popular among the younger generation of customers. Nevertheless, the company recognized that despite its popularity among the youth, there were not enough assortments of jeans in the clothing outlets. Capitalizing on this deficit was merely the next step in expanding. Gap's founders were sure that jeans could be sold through a chain of small stores devoted solely to that product.[12] As this business idea became successful, Gap expanded its line of offering and now Gap offers a range of clothing for men, women, and children. As Gap's business began to boom, it also began to expand and send its manufacturing jobs abroad. Gap Inc. added two new entities to its company, Banana Republic and Old Navy.
Gap also owns an online shoe store called Piperlime, selling shoes for all ages.
Promotion
Gap's promotion strategy has been blamed for the company's bust. Due to lack of a clear message, it has been alleged that Gap has lost contact with its core customers[13] which the company is attempting to win back. Gap is the only national retailer to spend more than 2% of its marketing budget for online marketing.[14] As a result, the company's e-commerce website has been cited numerous times as a model of stylish efficiency. Gap promotes its products through gift cards, catalogs, advertising programs on TV channels and magazines. Gap tries to position itself as a stylish casualwear retailer in a fair price. However, its marketing efforts to reach out to upperclass, luxury consumers is blamed for recent problems in the company.[15]
In addition, Gap's garment designs and products varies from North America and Europe. Products sold in Europe are targeted towards a European sense of style, whereas the Gap's North American garments and accessories are designed particularly for North Americans. This has recently changed and the firm has as of Summer 2009 reverted back to an enthocentric marketing model, based on North America.
Place
Gap's main opportunity to reach its customer is through its stores. Gap operates stores in the United States, Canada, the United Kingdom, France, Ireland, Korea and Japan. The Gap, Inc. also has franchise agreements with unaffiliated franchisees to operate Gap or Banana Republic stores in Singapore, Malaysia, United Arab Emirates, Korea, Kuwait, Qatar, Bahrain, Oman, Saudi Arabia,Cambodia, Indonesia and Mexico [16]. As of February 3, 2007] The Gap, Inc. operates a total of 3,131 store locations.[17]. In January 2008, Gap signed a deal with Marinopoulos Group to open Gap and Banana Republic stores in Greece, Romania, Bulgaria, Cyprus and Croatia.[18] In February 2009, Elbit Imaging Ltd. secured a franchise to open and operate Gap and Banana Republic stores in Israel.[19]
ETHICS
Definition
Systematic study of how moral standards are applied to marketing decisions, behaviours, and institutions.’ (Murphy, 1997, p. 261)
This year’s (2002) Ethical Purchasing Index (EPI) reveals that consumers continue to take a proactive approach to shopping, and are turning to products that have a positive impact on the environment and society.The EPI now stands at 125, an increase of 10 points over last year, and up 25 points from the 1999 baseline year – with unprecedented growth in some key consumer areas. This means that the sales in the ethical marketplace are growing at a rate of 19%, excluding banking and investment; and overall market share grew at a rate of 9% in 2001. When ethical banking and investment are added to the sales value of these products, ethical business activity contributes a massive £13.9 billion to the UK economy. This growth rate far outstrips average economic growth of 2.1% in 2001 and is double the rate of growth for goods in our
total basket.
Market growth Spending on ethical goods and services is, again, on the increase – an indicator that must come as a welcome sign for those of us who are
committed to sustainable development.
How big is the ethical market? At £6.8bn, the EPI demonstrates, quite clearly, the importance of ethical consumerism to the UK economy.
The Organisational Moral Development Model – Reidenbach and Robin,1991
1) Amoral à seeks to win at any cost and with any means, including exposing workers to life-threatening substances in violation of safety codes for the sake of profits
· Responsible selling to a new audience is still no substitute for fundamentally responsible business practices
· Motorola’s phones are part of an industry with serious human-rights issues: a key phone component, the metallic ore coltan, is sometimes sourced from war-ravaged Congo in Africa (though Motorola claims it sources from legal suppliers)
2) Legalistic à abiding by the letter of the law
· Gap damaged by allegations of child labour in the supply chain (but now follows strict codes of conduct and inspections)
3) Responsive à goes beyond profitability and legalistic concerns and attempts to strike a balance between making a profit and doing the right thing
4) Emerging Ethical à much greater tilt toward ethics, based on the recognition on the part of managemnet of a social contract between business and society; accept codes of conduct that are elaborated in handbooks and policy statements, in committees, by ombudsman, in ethics training programes, etc.
5) Developed Ethical à organisation-wide acceptance of a common set of ethical values that permeate all organisational actions
· (PRODUCT)RED could be considered to be in the final stage of the organisational moral devleopment model, because they already have established ethical values of giving as their common goal, thus being an organisation-wide action
· “With RED, money making and giving are one and the same” (Ponte et al., 2008)