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Help Egypt Develop: The Use of Cause-Related Marketing

"There is a common belief that increasing sales and spreading goodwill do not usually come hand in hand…….", these words were reported in the beginning of the interview conducted with Sameh Said, The Vice President of the International Division of the Summer International Group. However, this is no longer true – he continues – the change in the external elements in the market and the growing concern for social responsibility have made corporations realize that helping others can be good for business, and one way to achieve this dual objective is through what is known as the Cause-Related Marketing (CRM). He explained CRM as a creative strategy that can have a long-term effect of the corporate image by incorporating various aspects from promotion, corporate philanthropy, and social responsibility. In other words, he described CRM as an important mean to gain competitive advantage in the market.

CRM is a newly introduced topic in the market, as it goes back to the 70's. Yet, it has triggered a lot of arguments among researchers. Various questions were raised addressing the effect of Cause-Related Marketing on companies' image and brands, its impact on consumers' perception and buying behavior, whether it is a Cause-Related marketing strategy or more of a Cause-Exploitative Marketing Strategy, when not to use the CRM strategy and much more.

Before carrying forward our discussion, it is important to know what exactly CRM is. In the literature, CRM is defined as "….The process of formulating and implementing marketing activities that 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" (Polonsky and Speed 2000, 1365).

In other words, fund raising for a certain cause and the purchase of the firm's product are combined so that everyone comes out a winner, in which the company gets the chance to improve its public image and increase its sales, while the non-profit organization collects funds and increases public awareness (Polonsky and Speed, 2000).

It is important to mention that CRM have an advantage over the basic corporate philanthropy or the social responsibility as the customers' decide the amount by which the company would contribute depends on their purchases, which allows the company to evaluate the CRM campaign in the short-term but not the long-term (Polonsky and Speed, 2000).

One of the most first most successful and popular CRM campaigns is the "When Did Your First Fall in Love with Her?" campaign that was launched by American Express in the 80's. This campaign was mainly linking the usage of the American Express Card to the donation of the Statue of Liberty-Ellis Island Foundation. They declared that at each time this American Express Card is used, automatically 1 cent would be donated to the Statue of Liberty-Ellis Island Foundation. This campaign was a really successful one as it resulted in increasing the usage of the card by 28%, and additionally, it let people think of American Express Corporation as a responsible and public-minded Company (Polonsky and Speed, 2000).

Nevertheless, CRM should be used cautiously in order to get the maximum benefit out of it. Some companies use CRM as a strategic marketing tool, while others use it as a tactical tool. For those companies which use CRM as a strategic tool, they tend to have long-term commitment to the program. Besides in this case; the management tends to have high involvement in important decisions regarding the whole programs, while sometimes CRM is used as a tactical tool in order to improve and maintain the effectiveness of the company's' sales promotion effect. For example, some companies used CRM to increase the coupon redemption rate (Varadarajan and Menon, 1988).

In all cases, there are factors that the company should consider in order to effectively and successfully achieve both the company's and the non-profit organization objectives out of the programs. For example, the cause should match the brand as much as possible. For an effective use of CRM, campaigns should be launched time after time, in order for people to get along with it. For example, McDonald's from time to time engaged in different charity campaigns. Moreover, it should be tested first before it is launched, as a researcher claimed that most of the audience held a positive feeling towards unfamiliar products unlike those products that are well-known (Till and Nowak, 2000).

Another factor that companies should take into consideration is the fact that the world does not stand still. It is expected that changes in consumers' preferences would result in changes in their perception about the good causes. Besides, certain events could affect the type of good cause people are willing to support. For example, it is argued that the increase of the environmental support is a result of the increased natural disasters and changes in the climate. It worth noting that multinational companies should pay attention to the fact that their brands can reach across different markets, not only consumers' preferences are different across countries, but also most non-profit organization operates in only one country. As a result, multinationals would likely deal with more than one non-profit organization and would likely to have more than one cause. Finally, companies should understand that CRM is about building and maintaining a relationship for some length, it is not about establishing a connection to a fund raising or a cause just for the sake of one promotion. In other words, CRM is about investing in building a strong continuous link between the cause and the brand over time (Endacott, 2004).

It seems that CRM could work in the best interest of both the company and the society. As previously stated, it enhances the company's image as well as increasing its sales, while at the same time it provides the country an opportunity to be developed. The question is Do companies really care about helping their countries develop? Or is it just about serving their own interest? Besides, how ethical do people perceive companies using the CRM across countries? In an attempt to explore consumers' attitude with this respect here in Egypt , an interview was conducted with a consumer. Through the interview the consumer did not show any feelings towards the ethical dilemma that might be present when companies use CRM just to serve their own interest, raising another question which is "Would people in other countries feel the same way towards such companies?" answering this question would help companies understand their consumers' attitudes better and this could be done through investing in researching the way in which consumers' see CRM, and the type of good cause people prefer to support (Endacott, 2004).

Finally, we would like to point out that for the sake of a better ethical marketing environment, companies need to view CRM as a partnership with the non-profit organizations rather than as a tactical agreement for serving mutual benefits (Endacott, 2004).

   

References:

•  Endacott, R.W.J. (2004), Consumers and CRM: a national and global perspective, Journal of Consumer Marketing, Vol.21, No.3, pp. 183-189.

•  Polonsky, M.J. and Speed, R. (2000), Linking Sponsorship and Cause Related Marketing: Complementarities and Conflicts, European Journal of Marketing, Vol. 35. No.11/12. pp. 1361-1385.

•  Till, B.D. and Nowak, L.I. (2000), Toward effective use of Cause-Related Marketing Alliances, Journal of Product & Brand Management, Vol.9, No.7, pp. 472-484.

•  Varadarajan, P.R. and Menon, A. (1988), Cause-Related Marketing: A Coalignment of Marketing Strategy and Corporate Philanthropy, Journal of Marketing , Vol. 52, No.3. pp. 58-74.

     
   

Hagar Samir

Salma Ahmed
 
This article was done as basis for class discussion by students. They can be reached at Salma.abdellatif@student.guc.edu.eg and Hagar.said@student.guc.edu.eg
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