Social Cause Marketing - The Regis Group Inc
Social Cause Marketing - The Regis Group Inc
Social Cause Marketing - The Regis Group Inc
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EXECUTIVE<br />
NEWS<br />
Voltas Resorts to <strong>Cause</strong> <strong>Marketing</strong> with<br />
Jagmag Desh Mera<br />
Tata-owned Voltas AC has extended its positioning of energy<br />
efficient air conditioners to cause related marketing. It<br />
is running a campaign, titled Jagmag Desh Mera, aimed at<br />
encouraging consumers to donate a part of the money,<br />
which they save by using power saving Voltas air conditioners,<br />
to support an initiative called Lighting a Billion Lives of<br />
<strong>The</strong> Energy and Resources Institute (TERI).<br />
Lighting a Billion Lives is targeted at bringing light into<br />
the lives of one billion rural people by replacing their kerosene<br />
and paraffin lanterns with solar lighting devices. Voltas<br />
has tied up with TERI to support this initiative and the company<br />
has committed to light up 10 villages in 2009.<br />
On the idea behind opting for cause related marketing,<br />
Satbir Singh, Chief Creative Officer, Euro RSCG India, tells<br />
afaqs! ìVoltas AC is positioned as ëIndia ka ACí, with the starrating<br />
which can save about Rs. 10,000 per annum. It helps<br />
consumers save an enormous amount which, if donated, can<br />
help TERI to light up various homes in India.î Euro RSCG<br />
India has conceptualized the creative part of the campaign.<br />
Enabling consumers to participate or donate directly towards<br />
the initiative is one objective of the campaign. <strong>The</strong><br />
other aim is to push sales, for which the company has committed<br />
to contribute a part of the revenue earned on the sale<br />
of each air conditioner to TERI.<br />
So how is Voltas creating awareness about the Jagmag<br />
Desh Mera activity? <strong>The</strong> company is already using TV, print<br />
and outdoor advertising since April 2009 to inform the consumers,<br />
and online advertising to get their responses.<br />
<strong>The</strong> Voltas AC TV commercial is running across various<br />
channels such as NDTV 24x7, Aaj Tak, CNBC, Times Now,<br />
Discovery and National Geographic. Its print<br />
ads are appearing in <strong>The</strong> Times of India,<br />
Hindustan Times and <strong>The</strong> Hindu newspapers<br />
across India.<br />
Pradeep Bakshi, Vice-President, Voltas AC,<br />
says, ìWe are spending about Rs. 25 cr on advertising<br />
in this financial year, majority of which<br />
will be spent in the summer season.î <strong>The</strong> company<br />
is routing about 50% and 25% of its advertising<br />
budget to TV and print ads respectively. It<br />
is spending about 10% of its advertising budget<br />
on the Internet, which is much higher than the 2-3%<br />
spent by the company till the last financial year.<br />
ìVoltas is using banner, video and search marketing on<br />
the Internet to build hype and interactivity around Jagmag<br />
Desh Mera,î says Kushal Sanghvi, Managing Director, Media<br />
Contacts, the digital arm of Havas Media, which is managing<br />
the online part of the campaign. <strong>The</strong> banner ads redirect consumers<br />
to a webpage where they can submit their details in<br />
order to get contacted by the company for the cause.<br />
About 24 crore impressions, including banner and video<br />
ads, are already being served on websites such as Yahoo!,<br />
Rediff, MSN, Sify and NDTV.com in the month of May. <strong>The</strong><br />
digital agency claims that banner and video ads received a<br />
Click Through Rate (CTR) of 1.2% and 5% respectively during<br />
the initial stage of the campaign. It also claims that on an average,<br />
the campaign has clocked about 0.77% average CTR.<br />
<strong>The</strong> company plans to launch some below-the-line activities<br />
across eight metros and Tier II towns in the coming<br />
days to encourage consumers to donate towards the cause. It<br />
will also roll out a radio campaign on Big FM soon.<br />
Is the advertising working for Voltas? Bakshi says, ìWe<br />
have seen a growth of 30% in sales during April and May<br />
2009, as compared to sales in these months in 2008.î<br />
Source: http://digital.afaqs.com/perl/digital/news/story.html?sid=24189<br />
<strong>Cause</strong> <strong>Marketing</strong>: Altruism or Greed?<br />
ì<strong>Cause</strong> marketing, in which firms donate part of the proceeds<br />
from sales of certain products to a specified cause, is<br />
now a strategy adopted by hundreds of firms to increase<br />
sales for a wide variety of products, from coffee to cars,î said<br />
Aradhna Krishna, the Winkelman Professor of Retail <strong>Marketing</strong><br />
at Michiganís Ross School of Business. ìBut it is often<br />
associated with price increases, as well.î<br />
A few well-known examples of cause marketing include<br />
Project Red, which encompasses several companies such as<br />
the Gap, Motorola, Apple, Converse, Dell, Microsoft, American<br />
Express and others to raise money for the Global Fund to<br />
fight AIDS, tuberculosis and malaria; 3Mís Post-It Super<br />
Sticky Notes imprinted with pink ribbons to help fund cancer<br />
research and treatment; and Snappleís bottled water sales to<br />
help build playgrounds in poor communities.<br />
In a new study forthcoming in Management Science,<br />
Krishna and Uday Rajan, an associate professor of finance at<br />
Ross, found that cause marketing can increase sales, but can<br />
also raise prices of the cause-related product, as<br />
well as of other products that the company sells.<br />
One underlying reason for the price increase that<br />
Krishna and Rajan identify is the additional benefit<br />
that consumers get from buying a cause-related<br />
product. Consumers feel good about the<br />
firm selling the product, and also about themselves<br />
when they purchase such a product. Further,<br />
consumers can even feel good about buying<br />
a different product from the firm, one that is not<br />
related to a cause.<br />
Itís this spillover effect to a companyís other<br />
products that can make cause marketing worthwhile, the researchers<br />
say. In fact, even if a firm is unable to increase the<br />
price of a cause-related product enough to compensate for<br />
the donated money or if it simply ties a low-selling product<br />
to cause marketing, it can still increase its profits ñ as long as<br />
consumers feel good about buying the companyís other<br />
products. Moreover, firms that raise prices on both causerelated<br />
products and other non-cause products earn higher<br />
profits than if they donít participate in cause marketing at all.<br />
In addition, companies will never place their entire portfolio<br />
or product line in a social cause campaign. ìFirms can use<br />
SEPTEMBER 2009<br />
6<br />
EFFECTIVE EXECUTIVE