Cause Related Marketing (CRM)

Corporate Social Responsibility (CSR) is a subject of much current interest within the managerial world. CSR has the attention of the business community, investors, customers, and the business media. CSR as both the philosophy and practice of for-profit organizations voluntarily acting to positively assist society in ways beyond that required to obtain profit objectives. The concept of CSR is becoming transformed such that it is no longer a radical concept concerning the responsibilities of corporations to society, but simply a tool of managing stakeholders and improving reputations. CSR is the idea that it reflects the social imperatives and the social consequences of business success.

Corporate Social Responsibility is business decision making linked to ethical values, compliance with legal requirements and respect for people, communities and environment around the world. It could also be likened to open and transparent practices that are based on ethical values and respect for employees, communities and the environment. It is designed to deliver sustainable value to the society at large as well as to shareholders. Linking CSR program and initiatives to business performance and that corporate social responsibility is increasingly being recognized and implemented by firms as they see it as being central to core business activities. Recently, there has been established a significant increase in the amount of money companies are willing to spend on social activities with a marketing dimension.

Cause Related Marketing (CRM)

Various social responsibility initiatives have become popular over the last century which has marketing as their focus. One common and popular form of such activity is called Cause Related Marketing (CRM). CRM can be viewed as a marketing program that strives to achieve two objectives; improve corporate performance and help worthy causes by linking fund raising for the benefit of a cause to the purchase of the firm’s product and/or services. CRM is CSR with marketing objective or a marketing program with social objectives.

Cause Related Marketing (CRM) contributes to societal well and it leads to an increase in companies’ revenue. As defined, CRM is the process of formulating and implementing marketing activities which are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives.

Consumers believe that companies sponsoring CRM are socially responsible and turn to increase the willingness of consumers to buy a company’s product. CRM creates added value and directly enhances financial performance. In doing so, CSR acts as a foundation for the long term value needed for a company to survive in a competitive market environment and thereby achieve competitive advantage over its competitions.

The distinctive feature of Cause Related Marketing (CRM) is the firm’s contribution to a designated cause being linked to customers’ engaging in revenue-producing transactions with the firm (exchange of goods and services for money). Firms have for a long time used CRM as a means to enhance their corporate image, and to cultivate favorable attitudes in the minds of consumers. With these goals and objectives in mind, even after the CRM programme ceases, the corporation can still keep on boosting of sales increases as a result of the goodwill generated among consumers by the CRM sponsored program.

They can boast of increases in sales due to an established consumer based that have been created leading to whole new arena of loyal consumers. In carrying out CRM activities, most companies hope to market their socially responsible behavior to consumers of their product and create awareness at the same time about their products which have a direct impact on their shares and customer loyalty.

Given the same quality and prices of a product, consumers will most likely turn to associate themselves more with brands that have a cause related marketing benefit. If properly executed, CRM has proved to be an important aspect in the enhancing of companies image, reputation and likewise loyalty of a company. This is particular true especially when CRM is properly executed with a tie to the goal of the organization and making it a long term objective rather than a short term tactic to increase sales of its products.

Some basic objectives of Cause Related Marketing (CRM) both long term and short term include; gaining national visibility, enhancing corporate image, thwarting negative publicity, pacifying customer groups, generating incremental sales, promoting repeat purchases, promoting multiple unit purchases, promoting more varied usage, increasing brand awareness, increasing brand recognition, enhancing brand image, reinforcing brand image, broadening customer base, reaching new market segments and geographic markets, and increasing level of merchandising activity at the retail level for the brand.

They tend to such companies are socially responsible. These established positive effects has mostly form a base and reasons for most companies to engage themselves in CRM activities. However, most companies have found it difficult to measure the direct amount of benefit or outcome that arises due to the implantation of a particular CRM initiative.

Cause Related Marketing (CRM) refers to the branch of CSR that deals with a company committing to make contribution or donation based on fix quantum for each product acquisition, percentage of a sold product, etc. In this case an organization is usually partnered with a nonprofit organization. An example is Comcast donating 4,95 dollars of installation fees for high speed internet service to Roma McDonald for charity at the end of every month. Its objectives are:

  • To create an opportunity for Representatives to create relationships to their customers.
  • To improve consumer perceptions and to differentiate Comcast from its competitors.
  • To make a real and sustainable difference to a cause their customer care about.

Corporate Social Marketing (CSM)

Here the main focus is on behavior. Management uses this type of CRS program to facilitate the change in behavior from a negative to a positive one. Here a corporation supports the development and implantation of a behavior change campaigned which is intended to improve public health safety, traffic safety, natural disaster or any social related cause. For example Philip Morris encouraging parents to talk with their children about the use of tobacco. A Social Marketing Campaign is adequate in the case where the company’s profile is related to the social problem or there is the vision to increase sales.

Community Volunteering

It’s a kind of initiative that encourages the employees, retailers and /or franchise partners to volunteer their time to support local community or a particular cause. The core objective here is to use the volunteering to give more impact to the social initiatives and the business objectives and Company’s values of communication. Some causes that constitute community volunteering include

  1. Volunteering promotion as an organizational value
  2. Some causes recommendation through the internal communication
  3. Volunteering equipment’s, recruitment and organization

Social Responsible Practices

Here, a corporation aims at conducting discretionary business practices or investments that support social causes to improve the well being of a community or protect the environment (for example, the “Youth Smoking Prevention” programs, initiated by Philip Morris).

Strategic Philanthropy

Strategic philanthropy is defined as the systematic use of organizational core competencies and resources to address key stakeholders interest and to achieve both organizational and social benefits. It includes social aspects like corporate giving, volunteer efforts and other societal contributions.

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