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June 2009

Mutually Beneficial Marketing why businesses and brands need a good purpose

goodpurpose global summer 2009

Global Call for Public Engagement “To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to the suffering outside our borders, nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.….” U.S. President Barack Obama

TOMS Shoes: a history

(video plays in PTT files)

TOMS Shoes Blake Mycoskie: Chief Shoe Giver Donates one pair of shoes to children who need them in developing countries around the world for every pair sold

140,000 pairs of shoes to children in need worldwide to date Plans to give over 300,000 pairs of shoes to children in need in 2009.

A Communications Evolution Monologue

Reviewing

Private

Passive

Command Control

Sole Beneficiary

Static

Mass

Shareholder

Consuming More

Me

A Communications Evolution Dialogue Monologue

Reviewing Collaborating

Private Public

Passive Active

Shared Command Responsibility Control

Multiple Sole Stakeholder Beneficiary

Static Dynamic

Mass Community

Shareholder Stakeholder

Consuming More Less

Me We

Cultural Desire to Connect More‌ Around Issues, Ideas, Passion Points

Real Face-to-Face Conversations

Religious Gatherings

Class Reunions

Caucuses

Community Organizing & Po Idol Volunteering

Brand Communities

Book Clubs, Youth Groups

Town Hall Meetings

Fueled by Diversity of Public Engagement Channels

A changing & evolving social business landscape  Consumer citizens & citizen brands emerge and remain committed during a recession  Interest in social purpose works across all demographics: children, millennials, boomers, “generation g” (as in generosity) emerges  Social purpose is now a popular culture force to be reckoned with

Media, websites dedicated to purpose

A new contemporary, more engaging way to look at social purpose marketing

Evidence of social purpose abounds

Evidence of social purpose abounds

Why doing good is good business 57% of ceo/coo‟s said the benefits of pursuing social/environmental sustainability strategies outweigh the costs* Top two expectations for these strategies:  Attract new customer base/retain existing, attract and retain best quality employees* Companies that paid more attention to these issues over the past three years compared to those that paid least attention:  Share price increase of 45% versus 12%*  Annual profit increase of 16% versus 7 %* Consumers spent approximately $2.2 billion on fairtrade products in „06, a 42 % increase over „05 (benefiting over seven million people in developing countries)** *The 2008 Economist Study **The Fair Trade Federation

Purposeful business pays! Brands with purpose:  74% higher shampoo sales vs. non-cause brand  29% higher toothpaste sales vs. non-cause brand  High recall of cause / brand connection

The 2008 Cone/Duke University Behavioral Cause Study

Purposeful business pays!

General Mills’ Box Top for Education “…expects the program to raise more money this year than last , when it raked in $39 million. The initiative raised $250 million for public schools since it started…”

“When the economy is down , cause marketing let‟s consumers give back by doing something they were always doing, buying cereal” “When consumers engage in cause marketing, Mr. Peters said, it can ease the burden of charitable giving. “They [think] „I can write a check, but I don‟t have to, because their cereal purchase diverts funds to public schools so they don‟t have to open their wallet twice.” They can make their dollars go further, and that‟s important for the consumer to be engaged.”

Brian Peters General Mills Box Tops For Education

Cause sponsorhips improve brand perceptions

According to Performance Research, 41% of U.S. consumers believe companies can best improve brand perceptions by increasing their cause sponsorships -- for the first time surpassing sports and arts/cultural categories as ways to boost consumer opinion. While philanthropy may be down, consumers often see a cause campaign as a way to break a tie on a choice and enable them to personally contribute at low to no additional cost. With the demand for increased transparency, brands are learning to leverage their efforts in sustainability and support of other social issues as differentiating drivers of favorability and word-of-mouth.

A time for new social purpose business paradigm? Cause-Related Marketing: partnerships between forprofits and non-profits that create promotional and fundraising opportunities

Mutual Social Responsibility (for brands and companies)

Mutual Social Responsibility: brands, companies and consumers actively working together to effect enduring positive social change

Consumer Empowerment Brand Democracy Brand Personalization

Cause – Related Marketing

Company’s New Social Role and Relevance Corporation in Trust Flux

Corporate Social Responsibility & Philanthropy

Build bridge between CSR and Brand Marketing

Corporate Social Responsibility: definitions vary, but CSR can be described as a commitment by business to mitigate risk, bolster reputation and create opportunities by being a good (corporate) citizen. This may involve any number of activities that move beyond compliance and health and safety policies, from corporate philanthropy to societal well-being

Point-of-View Return on Involvement Foster Emotional Bond Engage Public Ownable Idea

Mutual Social Responsibility Purpose Driven Build Mutual Trust & Mutual Benefit Build brand loyalty / Sustain Relationship Profit Meets Purpose

R.O.I. Financial: reason to buy and profit incentive Brand differentiation + stakeholder engagement Halo effect and pride Brand catalyst for consumers

Why not “Return On Involvement?� ROI metric: conversation, interaction, co-creation, involvement, membership, brand loyalty, purchase and re-purchase

2nd Annual Global Consumer Study October 2008 Canada 500 UK 500 USA 1,000

France 500 Italy 500

Germany 500

China 1,000

India 500

Brazil 500

StrategyOne surveyed 6,000+ consumers across ten countries, aged 18-64

Japan 500

Its more important than ever to put meaning into marketing Only 25 % of people find contentment from the shopping experience* Recessionary times call for more substance 63% of consumers think brands spend too much on marketing/advertising and should put more into a good cause

*Source: Edelman GP global study 2008

Recession: Doing good is still relevant 80% of consumers feel that during a recession, it is still important for brands and companies to set aside money for social purpose UK

74%

Germany

76%

U.S.

77%

France

83%

Canada

83%

China

84%

Italy

86%

India

90%

Brazil

90%

Global

80%

Recession: Globally consumers remain loyal to brands if they support a good cause ď‚ž 68 % say that in a recession, they would remain loyal to a brand if they support a good cause ď‚ž Over half of consumers say that in a recession, they will buy from brands that support a good cause they believe in even if it is not the cheapest brand. ď‚ž Women are more likely than men to give the same level or even more support to a good cause

Their own role: Consumers want to make a difference & prefer brands that do! ď‚ž 87 % of consumers globally feel it is their duty to contribute to a better society and the environment ď ľ ď‚ž 82% say they can personally make a difference by supporting good causes

Germany

82%

U.S.

83%

U.K.

83%

France

92% 93%

Italy Global

87%

Consumers prefer brands that support worthy causes 76 % of consumers like to buy from brands that make a donation to worthy causes! 84%

76% 74%

67%

66%

76%

Make money and do good is a win-win ď ą 58 % of consumers globally are fine with brands that support good causes and make money

41%

U.K. Germany

49%

U.S.

47% 50%

France

44%

France

49%

Italy

Italy

55%

Global

54%

54%

U.K.

0%

56%

Germany

58%

Global

0%

50%

100%

ď ° 54 % of consumers globally would help a brand promote its products if there was a good cause behind it

66%

U.S.

50%

100%

What causes do consumers personally care about? Improving quality of health/healthcare

90%

Protecting the environment

90% 88%

Reducing poverty

86%

Equal opportunity to education

84%

Supporting human and civil rights Building understanding/respect for other cultures

78%

Fighting HIV/AIDS

78%

Helping to raise people's self esteem

Supporting the creative arts

75% 65%

Consumers will pay more for & evangelize good cause brands ď‚ž Over half of consumers globally are more likely to recommend a brand that supports a good cause ď ľ

Germany

40%

U.K.

40% 47%

U.S.

53%

France U.S.

56%

Italy

Germany

58%

Global

U.K.

59%

74%

Italy

69%

Global

0%

50%

52% 0%

67%

France

60%

50%

100%

ď ´ Nearly seven in ten (69%) of consumers would be prepared to pay more for eco-friendly products.

100%

A new value proposition? ď‚ž When choosing between two brands of similar quality & price, a social purpose ranks highest at 42% and is placed higher in order of importance above design & innovation (30%) and brand loyalty (27%)

Children driving cause involvement  (64%) of people say they have taken an action because they have been influenced by their children/other peoples children  (24%) of adults used lower wattage light bulbs based on children getting them to do so.  Other activities that were child driven Using fewer plastic bags (24%) Switching off household equipment and lights (23%) Participating in a fundraising event (20%)

Social purpose starts at home It is becoming more unacceptable in local communities not to make an effort or show concern for the environment. Globally, 65% of consumers agreed with this statement. Additionally: ď‚ž 58% of people have switched-off equipment or lights more often this year than last year; 56% have used lower wattage light bulbs and 51% recycled more ď‚ž 83% agree that as a society, we need to consume a lot less to improve the environment for future generations

Brands and companies weighing in many different ways‌

Shell FuelSave Driver Challenge Changing Consumer’s Behavior:  Inspire one million drivers to save fuel  Show drivers how 10 tips can help them save more than 10% in fuel consumption  Drivers go to their country-specific Shell web site and complete a training module

 100,000 fuel voucher incentives for drivers who successfully complete the training  Within the first week – 100,000 drivers were fuel-savers!

Brita – Filter for Good Brita’s FilterForGood program has motivated thousands of consumers to reduce their bottled water waste simply by switching to a reusable bottle with filtered water. The results for Brita have been exponential: sales increased & reinvigoration of the brand, consumer praise and a desire to infuse sustainability practices throughout Clorox brands.

Rama: More children better care Rama (margarine brand) supports families and government

The Idea: Improvement of flexible childcare in Germany

Rama stands up for more flexible child care in Germany – and supports government, nation, communities and families with 100 best practice child care projects

Rama: More children better care Results  Whitepaper made its way into political party newsletters and discussion by other key opinion makers  Awards:  

Sabre Award 2007 (CauseRelated Marketing) German PR Award 2007 (Corporate Social Responsibility)

 Sales increase at retail level  Media  100 million impressions in print, TV , online and radio.

Cadbury – Bicycles for Africa

 5000 rugged Bicycles for children in Ghana cosponsored through purchases  Contest – Winner goes to Ghana to help distribute bikes and meet recipients  Cadbury Cocoa Partnership & Fairtrade Certification

CBC & Cisco – One Million Acts of Green  Has engaged 46,000 members so far to commit more than 1.7 million “acts of green” to save the environment & fight global warming  In partnership with the CBC has created website as nexus for educating, understanding, logging & tracking each act of green w/member accounts

Starbucks

Power of One: Energy Efficiency for Ireland

So, which way to go?  Social purpose; which one?  Ownable space  Link to your brand attributes/benefits  Tools of involvement  Partnerships

NGOs as engaging partners ď‚ž are emerging brands themselves ď‚ž have key role to play with established brands/companies

Hallmarks of a goodpurpose campaign  Rally around a powerful idea with a social purpose  Engage the public to build mutual trust and mutual benefit  Create an emotional bond between brand and public  Build a bridge between CSR and brand marketing for maximum benefit using traditional and nontraditional channels to reach the public of today

Process Driven

Discovery Strategy + Ownable Idea

ROI

Listen + Learn

Differentiate + Action

Involvement + Sustainability For Mutual Benefit


goodpurpose (Summer 2008)