Corporate Societal Marketing: A Promising Form of Corporate Social Responsibility Paul N. Bloom Kenan-Flagler Business School University of North Carolina at Chapel Hill

Basic Argument Among the many social responsibility initiatives a company can pursue, corporate societal marketing programs deserve close attention, as they can differentiate your brand in the eyes of (skeptical) consumers and enhance your bottom line, while also improving social welfare.

Agenda Review trends in “corporate societal marketing” Discuss why it can work Cover the implications for marketers Highlight the biggest implementation challenges

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Statement of Ethics

Corporate Societal Marketing Marketing initiatives that seek to differentiate a brand/company through social involvement  Cause-related marketing  Corporate social marketing  Strategic philanthropy and sponsorship  Community relations projects  Sustainable development and environmental (green) programs  Economic development programs  Quality/safety improvement programs  Self-regulation initiatives (e.g., ethics codes)  Consciousness raising

Outlook for CSM Promises to become more prevalent  Hard to differentiate brands through better product features, better service, cleanliness, or more clever and visible advertising. Therefore need to turn to:  price (i.e., Wal-Mart) or  pulling on heart strings to create affinity and limit skepticism  CSM may do this better than CRM (and loyalty programs) or sports sponsorships  Examples: Newman’s Own, Whole Foods, Starbuck’s

What CSM Can Do Can improve social welfare  Through the program itself  Through helping nonprofits be more effective Can improve corporate social reputation Can improve brand image and equity Can improve employee loyalty and service Can improve brand sales and profits

How CSM Does What It Does All marketing initiatives are designed to create more favorable beliefs, attitudes, intentions, and behaviors toward brands Compared to other actions, adding social content to an initiative may create stronger changes in beliefs, etc. by getting consumers to weight “style of marketing” more positively and strongly in evaluating a brand than other functional and image attributes It may do this whether the cause-brand fit is strong or weak

Exposure to Marketing Initiative Judgments/Feelings: Beliefs/Weights Given to Initiative & Other Attributes Brand Attitude Brand Purchase Intention Brand Purchase Behavior Degree of Fit of Initiative with Brand Amount of Social Content of Initiative

More Specifically… Consumers have “persuasion knowledge”  They are always trying to figure out what marketers are up to High levels of skepticism Reward what they like (Attitude toward Ad a strong predictor of Attitude toward the Brand)  Hence, “style of marketing” becomes an important attribute in evaluating a brand When it’s social it may get weighted more heavily and positively than when it’s more conventional.  Also, halo effects on other functional and image attributes When it’s a good fit, it may be better or worse, depending on consumer feelings about sincerity

Pilot Study Demonstrating Effect Asked consumers to rank eight different “profiles” of a beer brand, where they were varied systematically based on container type, price, calories, protein, and type of sponsorship (2 levels of each). Can infer how much they weight these attributes based on the rankings Some of the participants ranked a brand that had a social sponsorship as an option and others had a sports sponsorship as an option

12 ounce Bottle $5 per 6 pack 150 calories per serving Fortified with 1.5 grams of Protein per serving Sponsor of the Budweiser Designated Driver Program RANK IS: (no ties please)

Conjoint Results “Designated Driver” and “Help Kids Read” > NASCAR and ABC Family Movie A high fit social cause will lift the ranking of a profile equivalently to a 50 cent price cut per 6 pack.

Implications for Managers Look for social causes as a way to differentiate yourself Avoid really low fit social causes, but lower fit may work better if it is distinctive and credible In addition to differentiability, pay attention to how substantial the market is that cares about the cause  May require a more subtle approach if not substantial  Examples in the Green Marketing context

Green Marketing Strategy Matrix Low Differentiability on Greenness High Differentiability on Greenness Low Substantiality of Green Market Segments LEAN GREENSHADED GREEN High Substantiality of Green Market Segments DEFENSIVE GREEN EXTREME GREEN

Implementation Challenges Making your efforts be perceived as credible and distinctive  Avoid being seen as a “tool” of associations and big companies (although working with their social programs is fine)  Strike out on your own with alliances with community groups Need a portfolio of causes  Since some causes may be risky (e.g., responsible drinking, tobacco control), look for less risky other causes (e.g., education, the elderly, auto safety) Sustaining the effort and continuing to inform consumers about what you are doing  Needs attention similar to what is given to all aspects of Integrated Marketing Communications  Need internal marketing to get all employees cooperating