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Wednesday, July 29, 2015

What is Cause Marketing? Part 1

By Dr Kathy Kelley, Professor of Horticultural Marketing and Business Management, and Dana Ollendyke, Extension Associate

Have you seen advertisements like the one below (Image 1) where a portion of the profits benefits a charity or cause?  The official definition of cause marketing from BusinessDictionary.com is "joint funding and promotional strategy in which a firm's sales are linked (and a percentage of the sales revenue is donated) to a charity or other public cause.  However, unlike philanthropy, money spent in cause-related marketing is considered an expense is expected to show a return."
Image 1. With every purchase of this tea, Teavana will donate $1 to the Oprah Winfrey Leadership Academy Foundation.

Although profits should not be the primary reason for building a cause marketing program into your promotional plan, it is suggested that consumers “feel good” about spending their money on goods that support a cause.  In 2013, Cone Communications (a public relations and marketing agency) released their Social Impact Study.  Some interesting take-aways from that study include:
  • Over half (54%) of U.S. consumers “bought a product associated with a cause” during a 12-month period ending in fall 2013, which was a 170% increase from 1993.
  • A majority of consumers (91%) want “even more of the products and services they use to support [a] cause, and 88% want “to hear how companies are supporting social and environmental issues”.
  • If you are looking to better connect with Millennial consumers via social media, they are more likely to “use social media to engage with companies around [causes]” than the general population, 64% vs. 51%, respectively.
This data is just the beginning of your research into determining if cause marketing is right for your business.  

Our next post will focus on cause marketing program development.