1. Prepared for: Client or contact name Title or additional names Authors: Stephen Palacios Executive Vice President Strategic CSR Market creation for multicultural consumers Date: 25 Sep 2008 Cheskin Added Value 255 Shoreline Dr., Suite 350 Redwood Shores, CA 94065 650-802-2100

2. 2 © 2008 Cheskin Added Value Why should Meeting Planners care about CSR? CSR is exploding rapidly of the 250 largest multinational corporations, 64% published CSR reports in 2005* there is rising expectations from consumers, employees and regulatory agencies CSR is increasingly a C-suite initiative Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility, HBR 2007

3. 3 © 2008 Cheskin Added Value Why should Meeting Planners care about CSR? CSR is increasingly embedded in fundamental corporate strategies 2005: Ford Motor Co. plant in Detroit President proud of ecologically powered roof (highly innovative, sustainable and cost effective) but NOT consumer facing while TOYOTA was winning the mindshare of American consumers with a limited release, but heavy advertising of the Prius.

4. 4 © 2008 Cheskin Added Value Why should Meeting Planners care about CSR? CSR is increasingly embedded in fundamental corporate strategies 2008: Companies are becoming more explicit with Consumers in their CSR initiatives and efforts

5. 5 © 2008 Cheskin Added Value

6. 6 Why should Meeting Planners care about CSR? NGOs are employing free market principles toward poverty alleviation – market making “Washington Consensus”: post Cold War notion that deregulation, privitization and open trade is the dominant economic global paradigm

7. 7 © 2008 Cheskin Added Value Why should Meeting Planners care about CSR? CSR is more than Sustainability, particularly for Emerging markets “Bottom of the Pyramid” global opportunities, efforts to sell goods and services to the near lowest economic strata, can often feel like CSR activities In the U.S., similar dynamic for multicultural markets, particularly the U.S. Hispanic market due to its size and trajectory

8. 8 © 2008 Cheskin Added Value Why should Meeting Planners care about CSR? Corporations are reverse engineering the free market principle approach into more strategic CSR and for profit models - also market making $ $ For Profit

9. 9 © Cheskin 2006 African American SegmentHispanic SegmentAsian Segment Total37,502,320Total41,322,070Total12,326,216 % of State % of Segment % of State % of Segment % of State % of Segment New York17.58.9California34.730.1California12.035.0 Florida15.77.3Texas34.618.8New York6.510.1 Texas11.77.0Florida19.08.0Texas3.25.8 Georgia29.56.9New York16.07.4New Jersey6.94.9 California6.86.5Illinois13.94.3Hawaii41.74.3 Illinois15.15.1Arizona28.03.9Illinois3.94.1 Maryland29.14.3New Jersey14.83.1Washington6.23.1 1 in 3 U.S. consumers are AA, Asian, or Hispanic

10. 10 © Cheskin 2006    Ratio of Non-Hispanic Whites to Other Races/Ethnicities by Age Source: US Census 0-9 (1 : 1.5) 10-34 (1 : 1.7) 35-49 (1 : 2.5) 50-64 (1 : 3.4) 65+ (1 : 5.0) Age         Non-Hispanic White  Other Races/Ethnicities

11. 11 © 2008 Cheskin Added Value Hispanic population moving from minority to plurality means new thinking about targeting the general market. Redefining the Marketplace 0 40 80 120 160 1990200020102020203020402050 Population in Millions Source: US Census 0% 10% 20% 30% 40% 50% Hispanic Percent of Total Population Source: US Census Projections 1990-2050 TOTAL U.S. HISPANICS POPULATION

12. 12 © 2008 Cheskin Added Value Current Confusion: CSR and Multicultural Marketing in Health Care Director under Social Responsibility Individual policy sales team

13. 13 © 2008 Cheskin Added Value Define the issue appropriately: disassemble first Strategy bridging the two is where success lies Confusion comes with most multicultural initiatives Commercial actors can be skeptical of efforts as non revenue enhancing. Non commercial actors can place all emphasis on social benefit goals. Clear distinctions, goals, and metrics are required for both to succeed. With immigrant markets, the opportunity to bridge both is greater (market creation function). Social Responsibility/ Good Citizenship Commercial Success vs.

14. 14 © 2008 Cheskin Added Value Commercial Realm Corporate Social Responsibility Program Goals Profit goals are the same as for other markets. Conforms to certain systems and processes. Focuses on improving current business. Servicing existing members and attending to prospective, qualified members. Program Goals No profit Enhance corporate reputation Education focused Mitigate negative criticism from social/political entities Assistance for those that cannot afford healthcare. Market Development Program Goals Focus is on self-sustainable initiative; little profit. Experimentation with new programs, products. Membership/market development by transitioning people to transactional economy. Transition them to become viable commercial members in future. Creating An Offer by Aligning CSR and Multicultural Marketing

15. 15 © 2008 Cheskin Added Value Case Study: Aligning CSR with Non Profits to Build Multicultural Markets

16. 16 © 2008 Cheskin Added Value Going Forward: How will CSR continue to evolve? -Organizational Structures will change to reflect Strategic CSR with Marketing and market building

17. 17 © 2008 Cheskin Added Value Going Forward: How will CSR continue to evolve? - Consumers expectations for corporations will continue to rise - Employees, particularly Millenials, increasingly will include CSR efforts in their employment decisions - Companies in the services realm in the U.S. will increase their CSR and Multicultural marketing alliance - Companies that are serving emerging markets will increasingly employ Strategic CSR efforts to build markets

18. 18 © 2008 Cheskin Added Value Going Forward: How will CSR continue to evolve? - Companies are more holistic in their strategic CSR

19. © 2008 Cheskin Added Value Thank You 24

20. 20 © 2008 Cheskin Added Value Program Goals No profit Enhance corporate reputation Mitigate negative criticism from social/political entities Program Goals Little to No profit Education of emerging consumers Experimentation of new programs, products. Membership. Corporate Social Responsibility + Corporate Social Responsibility Program Goals Profit at a certain level Conforms to certain systems and processes Commercial Realm

21. 21 © 2008 Cheskin Added Value SC Johnson

22. 22 © 2008 Cheskin Added Value SC Johnson