The global business environment is changing. While old ideas are giving way to new ones just as they have done since time immemorial, a key concept in the modern way of doing business is “corporate social responsibility (CSR).”:http://en.wikipedia.org/wiki/Corporate_social_responsibility While most critiques, commentators and companies in India see CSR as some kind of charity that companies must indulge in – just to give back something to society what they take from society – more of a moral obligation rather than a serious business obligation that can impinge on both the top and bottom lines, there is increasing evidence that in the days to come social values and ideals will become the main driving force behind the way companies do business. This article takes a look at this emerging trend.
Consider a few examples:
* Water marketers such as Coke, Pepsi, Nestle have begun to spend big bucks on the issue of how to sell their products in more environment friendly plastic bottles and whether they should eschew such bottles altogether and go for more costly alternatives such as aluminium bottles
* The Brazilian city “Sao Paulo has banned ads”:http://adage.com/abstract.php?article_id=120839 on billboards, neon signs and electronic panels and many other cities in Brazil, North America and even in India have begun to think along similar lines
* Companies in India and elsewhere have begun to wake up to the need to hire green managers to manage the environmental aspects of their operations
* A recent “study done by Cone Communications”:http://www.coneinc.com/content76.html found that 87% of US consumers will switch from one brand to another comparable one based on its association with a good cause – up 31% since 1993; 66% consider a company’s position on social issues when deciding on buying its stock, up from 40% in ’93.
* “Kiplinger’s Personal Finance,”:http://www.kiplinger.com/magazine/contents.html a highly reputed investment magazine well-known for its hard-nosed, pragmatic but ear-to-the-ground approach has published its latest issue centered around the premise that investing in green companies is a smart strategy.
* Dishonesty and lip service about commitment to social causes do not work anymore – honesty does. Recently reputable marketers including Volkswagen, Lexus, Tesco and RyanAir have all been “caught making empty claims”:http://adage.com/article?article_id=120982 about their green credentials by U.K. watchdog the Advertising Standards Authority, leading to a clampdown on marketers who make unproven claims.
All these examples go to show that companies have already begun or will soon be forced to begin paying more attention to environmental and social issues not out of any desire to do good for the world at large but merely to survive since a company’s business practices and its long-term commitment to social causes is increasingly emerging as the key brand differentiator in the minds of consumers. In fact, in a recent commentary the editor of Advertising Age Jonah Bloom has argued that for companies “the ties between doing good and doing well are becoming impossible to ignore.”
While all this is having a tremendous impact on such issues as new product development, R&D spends on developing green products and green technologies, labor practices that impinge on fundamental human rights, etc., in the realm of marketing specifically, the traditional 4 P’s approach to marketing has begun to take a beating. With consumer behavior increasingly being driven by social causes “cause marketing has come of age”, says Carol Cone, chairman and founder, Cone, LLC.
To be successful in such an environment, Bloom argues, a lot of brand managers will have to think about their companies’ reputations and not just their products’ attributes. They will also have to learn to stand for something bigger and more complex than a brand position.
He points out that Steve Hayden, vice chairman of “Ogilvy,”:http://www.ogilvy.com/ and someone who has spent some time researching the impact of the empowered consumer, the erosion of trust in corporations and the increasing influence of word-of-mouth believes that there’s a shift that needs to take place from agencies looking for big ideas to agencies looking for “big ideals.” Hayden, writes Bloom, has a simple, fill-in-the-blank exercise he’s using to try to find that ideal: “Brand X believes the world would be a better place if …” In the case of Ogilvy client Dove, that’d be “if women were allowed to feel good about themselves.” Incidentally, Ogilvy’s latest Dove campaign attacking the beauty industry has begun to get “rave reviews.”:http://adage.com/garfield/article?article_id=120975
Of course, critiques will argue this is just another agency gimmick but brand managers who’ve rarely considered anything beyond price, product, place and promotion, waking up to the importance of cause marketing is the first step towards realigning their strategies in an emerging new marketplace where the Four P’s are just not enough. Perhaps, the time has come to add another P – Protection! Protection of basic human social concerns!