Cause initiatives endure despite budget cutbacks

NEW YORK: While many companies have recently cut overall marketing budgets, a number of corporations are still employing cause marketing campaigns and corporate philanthropic efforts.

NEW YORK: While many companies have recently cut overall marketing budgets, a number of corporations are still employing cause marketing campaigns and corporate philanthropic efforts.

Subaru of America, for one, is in the midst of the “Share the Love” cause campaign, running from November 24 to January 2, which allows new vehicle-buying customers to pick one of five charities to receive a $250 corporate donation. The effort is expected to raise up to $5 million.

Although the campaign was planned as the company's major end-of-year promotion months before the global financial crisis occurred. Michael McHale, director of corporate communications at Subaru says he believes the company, “struck a positive chord” with consumers and charities by sticking with the effort, said.

“We thought this was a way to get to current customers, and to show other consumers what it means to be a Subaru customer and say, ‘If this is your sort of thing, why don't you become a Subaru owner, too,'” he said. “I think [the reaction] was positive. Everyone who works here understands that we are a company that tries to do good; it's long been that way and people like that.”

Subaru handles most PR in-house, though Carmichael Lynch is its branding agency.

Starbucks, whose CEO Howard Schultz often talks up “responsible capitalism” in interviews, announced December 18 that it will expand its partnership with the (Red) organization via the creation of value cards that can be used for purchases throughout next year. Every time a customer uses a card, the retailer has pledged to donate five cents to the Global Fund to Fight AIDS, Tuberculosis, and Malaria.

Because Starbucks is publicly identified with charitable giving, it's important to the brand's relationship with consumers that it maintains cause marketing efforts even in difficult economic periods, said Vivek Varma, SVP of public affairs at Starbucks.

“During these difficult times and in terms of the world financial crisis, it's more important that ever to stay true to these brand virtues,” he said. “I think it's the natural human and consumer condition to want to do business with companies that you know and that you have an amount of trust with.”

Starbucks' AOR Edelman is contributing to the cause efforts.

A number of other companies including Macy's, Sears Holdings, and Dogpile.com, have launched cause marketing campaigns since the beginning of November, too.

David Hessekiel, founder and president of the Cause Marketing Forum, agreed that companies are continuing cause campaigns scheduled for this year but questioned what the sector will look like next year.

“I am pleased to see that not everyone is panicking, and people are trying to do smart strategic programming with cause marketing being a part of it,” he said. “But it will be even more enlightening six months from now when programs that are being planned at this time, amid the confusion in the marketplace, are happening.”

The continued emphasis on charitable giving and cause marketing fits consumers' expectations of corporate behavior, according to a November study conducted by Eric Mower and Associates. Of the 520 adult consumers polled by the Syracuse, NY-agency, 62% said they expect to give less or not at all to charities in the future, yet 85% of respondents said they expect brands to maintain or increase their charitable giving during times of economic tumult. Nearly six in 10 (57%) respondents said that by purchasing a product directly linked to a cause, they believe they are supporting that charity.

“The poll validates a lot of the information we already knew. Relative to the effect of a cause and purchase decision of a consumer, there are consumers out there that are willing to pay more for a product if it benefits a charity,” said Chuck Beeler, director of social branding at Eric Mower and Associates. “And the message for the nonprofit world is that a strategic alignment with brands will be more important to the brands moving forward.”

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