For a worthwhile cause

Updated: May 5 2007, 07:16am hrs
Switch on the TV these days and chances are you will spot Procter & Gambles Shiksha campaign running on one of the satellite channels. The effort is clearly involved with not only on-air promos, but also information weaved into shows, programmes etc. P&G has been doing this for the last three years, between April and June, with a simple premise: buy its products and help a cause.

In this case, the initiative is aimed at helping with the education of underprivileged children apart from increasing awareness about child rights. How has the company achieved this By tying up with non-governmental organisation Child Rights & You (CRY). So far about Rs 2.69 crore has been generated, supporting the education of 33,052 children in 435 communities. P&G has also committed an amount of Rs 1 crore to the initiative, irrespective of sales. So that helps too.

P&G, however, is not the only company involved in an effort like this. ITC, for instance, has two of its divisions foods and greeting, gifting and stationeryworking in this area. On purchase of Aashirwad, Sunfeast or Kitchens of India products, consumers invariably support issues such as water conservation and tree plantation.

How does this happen A percentage of the sales proceeds is channelised into these areas. Similarly, the sale of ITCs Expressions Greeting Cards helps the cause of SOS Villages basically places that look after orphan children in India. Again, on the purchase of ITCs Classmate notebooks, Re 1 is donated for the cause of rural development and childrens education.

Another example, this time, from the hospitality industry, concerns the Marriott group of hotels in India. In every room, a special diya (or lamp), which is an interesting collectible for many guests, is kept along with an equally decorative flyer. The latter exhorts the guest to purchase the lamp, the proceeds of which would be donated to a cause.

Cause and Effect

Though cause-related marketing is common abroad, in India, it is still not widespread
One reason is that the effort
that goes into linking the product
with the cause is not easy
Communication has to be targeted and sales monitored
Internationally, companies such as Avon have used CRM very well
The positive rub-off on
the brand and the company is
enormous as a result of CRM

The response to this initiative, says Deepak Manocha, director, rooms, J W Marriott, Mumbai, has been good, with many guests picking up the lamps eagerly. Giving the guest a memento or token is part of the overall experience. A nominal charge is attached to this, which is donated to a cause, he says.

What these companies are doing can be simply termed as cause-related marketing (or CRM), where the agenda is to not only improve sales, but also promote a cause. Worldwide, CRM is common, with companies such as Avon, for instance, which is a leading direct seller of cosmetic products, aligning sales of special products to the cause of breast cancer. In 2006 alone, the company raised about 750,000 pounds through the sale of these products.

Some others have approached the issue of cause-related marketing a little differently. For instance, credit card company VISA in the US has aligned itself to a number of causes, which is promoted prominently on the card. The card is a valuable messaging medium, in a sense, which serves to increase awareness for these causes. This, of course, is more of a co-branding exercise, which is undertaken by Deutsche Bank and Citibank in India along with CRY.

The link with sales here is by enticing consumers to purchase the card by giving them a good reason to do so. In this case, it is the cause, which drives consumer purchase.

A percentage of the money on subscription is subsequently donated to the cause. Not only that, every time the consumer spends, a portion of it goes to the cause. All of this results in a positive rub-off on the brand and the company.

For instance, Deutsche Bank has been able to add significant numbers since launching its co-branded card last year, says Irwin Fernandes, regional director, west, CRY. Says Ravi Naware, chief executive, ITC Foods; The impact on brand equity is enormous. This point is corroborated by a spokesperson for Hindustan Lever Limited, a key rival to ITC in the fast-moving consumer goods sector.

HLLs approach to CRM, incidentally, is not conventional. For the FMCG major, the brand is the starting point for any activity. CRM, in that sense, comes as a consequence to the marketing task at hand and is hence part of the strategy.

For instance, in November last year, the company launched the Women for Women Fund, using the Ponds platform, taking up the issue of violence against women. This came about following a consumer insight, which said that faces reflected not only the outer, but also the inner self.

The entire effort was in conjunction with the United Nations Development Fund for Women, with the company pledging an initial amount of Rs 25 lakh. The corpus was subsequently increased from the proceeds of the sale of Ponds cold cream packs. Almost Rs 2 was contributed to the fund from the sale of every pack. Interestingly, consumer engagement was not restricted to mere purchase alone, but buyers would have to show solidarity by posting a special blue flap, available on the pack, to the company. All of this did go a long way in improving overall equity for the brand.

According to management and marketing consultants, when companies align their business objectives to a social cause, they are most likely to win the trust of consumers. This is borne out by the work done by Avon, P&G and even HLL, for that matter. But cause-related marketing has greater implications, says American author Joe Marconi in his book Cause Marketing.

That is because it helps build trust not only with consumers outside, but also with employees within the company. In that sense, it is vital for the long-term survival and growth of the organisation.

In India, however, CRM has been largely sporadic in nature. Barring a few companies, who link product sales to a cause, most others prefer to simply set aside an amount for corporate social responsibility projects. A key reason for this is that the effort involved in doing cause-related marketing is greater. Linking a brand with a cause is not easy, explains Chand Das, chief executive, greeting, gifting and stationery business, ITC.

You have to set aside resources, have targeted communication, which calls for a lot of effort. On Shiksha, for instance, there is a dedicated team involved, who bring in their expertise in different areas, be it PR, marketing communication or sales. As a company spokesperson says, Every time a consumer purchases a large pack, a part of it goes into the Shiksha fund.

On account of the strong consumer response to the initiative, P&G has been progressively increasing the number of brands participating in the project. This year, there are almost eleven products across categories to choose from. Chances are that this figure could only go up in the coming years.

Meanwhile, ITC does not rule out the association of other divisions in CRM activities. As Das says, If there is a case to be made then surely the company would get involved.